Passing this year’s mid point, indications are positive for the independent automotive aftermarket as consumers keep gaining confidence in the economy. And when there is reason for optimism, seize it; enthusiasm is contagious.
During last month’s Tool & Equipment Distributor Association (TEDA) vendor advisory meeting in Ellicott City, Md., TEDA President Glen Pratt noted the independent tool and equipment distributors have collectively posted double digit sales gains every year for the past three years. That confirms other findings that automotive aftermarket sales are moving in the right direction.
For the third straight month, Northcoast Research recently reported that aftermarket sales continue to grow. The main reason being that consumers have stopped deferring automotive maintenance.
Researchers are not uniform in their outlook. IBISWorld, another research firm, reported that auto maintenance and repair industry revenue has declined at an annual rate of 2 percent for the past five years, a trend they expected will continue for another year before improving. They attribute the decline to low consumer confidence caused by the recession.
The IBISWorld report, however, examines aggregate aftermarket industry revenue. And a decline in aggregate sales makes sense when you consider the recession squeezed the number of aftermarket outlets. Such a fallout was noted in the Automotive Aftermarket Industry Association (AAIA) Digital Aftermarket Factbook. While AAIA notes that a fallout in aftermarket outlets began even before the 2008/2009 recession, it does not report a corresponding revenue loss like IBSWorld. Instead, AAIA reports revenue has increased every year in low single digits since 2009.
AAIA notes consumers believe cars are engineered to last longer and recognize the opportunity to take advantage of the favorable economies of vehicle maintenance and repair versus the cost of purchasing a new vehicle.
So what does all this mean to you as an individual shop owner? While forecasts vary, all researchers agree recovery since the recession can be expected in the near future if it hasn’t occurred already.
A shop’s capabilities and willingness to invest in employee compensation, training and shop assets has more bearing on its success than overall market trends.
Shop owner attitude also plays a role; positive or negative, attitudes are contagious.
