Researcher Predicts $7 Billion U.S. Aftermarket Sales Boom Due to Car Dealer Closings

With a predicted 2,000 U.S. car dealers to close in 2009, Lang Marketing has estimated a $7 billion windfall in parts and service for the independent automotive aftermarket.

Calling it “part of the greatest restructuring of the automotive aftermarket competitive landscape since World War II,” Lang Marketing president Jim Lang says that the dealer closings will have a multi-faceted effect on the aftermarket.

“With at least 2,000 dealers closing in 2009, over $5 billion in dealer bay parts and service sales will be abandoned along with more than $2 billion in product sales through dealer parts departments and dealer redistribution of OE parts to independent service outlets,” he says.

He estimates that car dealer closings in 2009 will shutter over 32,000 dealer service bays, but the dealer casualty count could climb much higher under severe circumstances. The researcher estimates that up to 51,000 dealer bays in the U.S. could be closed if the dealer network suffers a traumatic shock, such as the bankruptcy or dramatic downsizing of a U.S. automaker. The exact number of dealer bays closing in 2009 will depend on how many new car dealers convert to used car outlets with service bays.

“Counting all dealer parts and service sales (bays, counter sales, and redistribution volume), 2,040 dealer closings in 2009 will potentially shift $5 billion in parts volume, primarily replacement parts, at user-price toward the independent aftermarket plus another $2 billion in service billings,” says Lang.

Replacement parts are parts necessary for vehicle operation, as opposed to accessories and other discretionary automotive product purchases.