Aftermarket held up remarkably well in 2020

Dealers keeping tabs on the aftermarket may be interested to note that the market held up remarkably well in 2020 when compared to the new vehicle market, according to DesRosiers Automotive Consultants (DAC).

“Further evidence of the strength of the aftermarket is emerging in 2021 with six month retail sales data for aftermarket parts and accessories stores hitting an all-time high—well above 2020 and indeed well above the levels seen in 2018 or 2019,” said DAC in its update.

As inflation emerges as a new concern for the economy, DAC said it may be tempting to assume the growth in retail sales is the result of price hikes—but CPI data for June 2021 shows that aftermarket inflation for parts and supplies actually declined in 2021 to a rate of only 0.4% in June. Inflation for repair and maintenance, said DAC, climbed to 2.5%.

A key factor helping the aftermarket is the resilience of Canadian drivers regarding the amount of driving they do. More driving leads to more wear and tear, which leads to a greater need for aftermarket parts and services.

“As a surrogate for kilometres driven, DAC closely tracks gas sales by month,” said the company. “While far from perfect, this variable does provide the best and most accurate insight available at this time in Canada.”

If we compare gasoline consumption in the first half of 2021to the first half of 2019, consumption still reached 80% of the non-pandemic baseline. This indicates that Canadian vehicles, through pandemic-related restrictions and work-from-home arrangements, are still getting plenty of use. DAC sees this variable reaching above 90% in September.

“Overall, Canadians are driving their vehicles more than many would have expected under the circumstances and are therefore maintaining demand for aftermarket parts and services,” said Andrew King, Managing Partner at DAC. “Aftermarket retail sales figures are remarkably strong and indicate notable strength in the Canadian aftermarket—the backbone of the Canadian automotive industry.”

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