Gas prices, supply chain, inflation and the looming COVID-19 variant threat will all have something to say about how the next 12 months play out in the automotive aftermarket, according to new analysis.
Calling these “mega-forces,” a recent Lang Market’s iReport observed that there hasn’t been a combination of such great issues in recent memory that will affect the aftermarket.
“These four mega-forces will change the pace of miles driven, influence vehicle buying decisions, reduce the availability and variety of aftermarket products, change how consumers decide where to have repairs done, alter the frequency of auto repairs and affect the growth of aftermarket volume,” the group said.
What makes all of this unusual is how quickly they have developed, their collective strength and the likelihood that these issues will stick around for the entire year, if not longer.
“Collectively, they will provide a headwind inhibiting the anticipated aftermarket recovery in 2022,” Land noted.
The effect of gas prices will be felt in miles travelled. It will also impact where else they spend their dollars if they’re spending more at the pump.
That said, this situation could push consumers to give a longer look at alternative engine options. “High gas prices could cause new car buyers to take a longer look at electric vehicles,” whether that is battery or a plug-in hybrid option, Lang said.
The current challenges of the supply chain will remain, creating a headwind for the aftermarket, the group explained. As a result, “parts stores and repair outlets [will] scramble to provide same-day availability of the wide array of products needed to keep America’s vehicles in operation.”
As for inflation, consumers will be looking to stretch their dollars as far as possible. And it could hit the aftermarket harder than most other industries, Lang warned.
“With consumers trying to stretch their purchase power in the face of rising prices, this could mean delaying some vehicle repairs or opting for ‘value’ as opposed to ‘premium’ auto parts,” it said.
However, increased prices could mean higher bottom lines and overall dollar volume in the industry.
Finally, the new COVID-19 variant Omicron.
“A resurgence of mandates to control the spread of the Omicron variant will slow the return of workers to offices and extend the remote working of millions of [people],” Land said. “This will put downward pressure on miles driven and increase supply chain disruptions.”
This could mean difficulty in getting products as supply chains face disruption caused by the new variant.
“These four mega-forces will collectively create a headwind against the continued recovery of 2022 aftermarket volume from the devastating impact of COVID-19 during the last two years,” Lang said.