In case anyone in the automotive aftermarket was still wondering, the admittedly incredible advances in automotive technology are going to have to get their elbows out in earnest if they’re going to make headway among the expanding vehicle population on our roads.
In addition to a long list of factors such as cost and consumer acceptance—hybrids and electrics are still a very small proportion of sales—the fact remains that the vast majority of vehicles being built today are still conventional, even if they have some added quasi-autonomous features such as hands-free highway driving, lane departure warning systems, and ADAS and automatic emergency braking.
And even these latest advances are joining a huge “installed base” of vehicles that the aftermarket is, for the most part, very well positioned to service.
And then there’s this, buried way back on page 46 of the Automotive Industries Association of Canada’s Outlook Study, compiled by DesRosiers Automotive Consultants, being released today:
“In the past five years, a notable trend that has occurred in the fleet has been the change in age segment sizes. In 2012 the largest age group in the fleet was 8 – 12 year old vehicles with a 29.3 percent share. Since then those vehicles have aged into the 12 years and older bracket and as scrappage has not increased significantly, the bracket has grown to be the largest as of 2017.”
So, there you have it. Vehicles built in 2005 or earlier make up the largest segment of vehicles on Canada’s roads.
This is a strong indication of both the durability of vehicles as well as the economic imperatives that Canadians are facing.
There is an enduring line of thinking in the automotive aftermarket that vehicles more than 10 years old are fully entrenched in the DIY market—thinking that goes back to the days when a decade old car was indeed a beater– but there is scant evidence that this is still true, as DIY/retail parts sales have been virtually flat for the past several years.
More obvious, to me anyway, is that the owners of these vehicles remain part of the mechanic installed customer base, but are more attentively looking at what they perceive to be a channel that will provide service at a price point that they feel is appropriate for their older vehicle. It is important to realize that not every individual will come to the same conclusion here. Some will opt for national mass merchandiser chain service options, others franchised chains. Still others will seek grey market operations, shade tree mechanics, etc.
Many will choose to stay with their trusted local independent service providers, branded and unbranded alike.
From a service provider’s standpoint, this will challenge them to maintain viable door rates and use quality parts that will deliver an effective repair.
From a parts wholesaler’s perspective, this continuing aging of the fleet is bound to increase pressure to meet price imperatives for these applications.
According to the study this segment is growing at more than 7% a year, so as this vehicle population wave rolls through—it is bound to taper off starting in 2021 as a result of the dip in sales between 2009 and 2012, but then is poised to grow again—it is going to have an impact.
Paradoxically, that impact may be felt in the “sameness” of the vehicles the automotive aftermarket is servicing; until, suddenly it will seem, they’re all quickly replaced with a whole new generation of technology.
The challenge then is to prepare for the future even as we live with the past.
There is of course, loads more to think about in the more than 100 pages of the AIA’s Outlook Study.
The study is being released to Association members today. Non-members can write firstname.lastname@example.org.