The aftermarket is currently experiencing minor softness, but DesRosiers Automotive Consultants say bigger challenges remain ahead.
In looking at key aftermarket variables to better understand how the industry is performing in Canada this year, DAC considered vehicle usage patterns: one of the main factors in understanding the health of the Canadian automotive aftermarket.
“Indicators point towards some minor softness in the automotive aftermarket in Canada this year, though Canadians are continuing to rely heavily on their vehicles and continuing to invest in their upkeep and operation,” said Andrew King, Managing Partner at DAC, in a statement.
“In the first half of 2024, Canada saw gasoline consumption figures decline slightly compared to the first half of 2023 — indicating some minor softness in the market. However, this needs to be considered in light of the changing structure of the fleet.”
Specifically in regard to zero-emissions vehicle adoption, DAC said its analysis showed these vehicles have reached 2.6% of the total light vehicle fleet. In the second quarter of the year, they said the ZEV share of new light vehicle registrations increased 12.9%. “Taking these structural changes into account, the decline in gas consumption in 2024 is minor indeed,” said DAC.
Another important variable to consider is retail sales. DAC said figures for the first half of 2024, among auto parts, accessories, and tire stores, dipped slightly by 1.1%. But retail sales for these stores remained 41.2% above the first half of 2019 when considering absolute dollar value; “a rate of growth well above the rate of inflation.”
“It should be noted (that) the small volumes of vehicles sold in 2019-2023 will start to work their way into their prime aftermarket years in the coming years — meaning that certain sectors of the aftermarket may face potential challenges later this decade,” said King.
