Dealerships across Canada are not alone in feeling the crunch from COVID-19; the aftermarket, hit by the significant decline in kilometres driven in the early months of the pandemic, finally managed a strong July but experienced some declines in August.
DesRosiers Automotive Consultants (DAC) teamed up again with the Automotive Aftermarket Retailers of Ontario (AARO) to survey their members and better understand current market conditions and the outlook for 2020. What they found was a clear growth in the number of repair facilities operating on normal hours — 73.7% for August.
“Those respondents working reduced hours dropped from 38.5% in April to 26.3% in August, with no respondents noting complete closures for August,” said DAC. “When asked about the change in the dollar value of their sales over 2019, a slim majority of respondents noted a decrease of between 1% and 25%.”
However, 47.2% of respondents indicated that sales were up in July, year-over-year, but down to 41.1% in August.
“Installers in Ontario saw some real strength in July as the province reopened and pent-up demand was released,” said Andrew King, Managing Partner of DAC. “Although the aftermarket outlook for the fall is far from clear as uncertainty remains both about public health concerns and the ‘stickiness’ of changes in structural issues such as working from home, and online shopping.”
When considering changes in different types of work, diagnostic work was the most likely to remain unchanged (43.5%), while moderate to severe declines were most common for the preventative maintenance category (60.0%), when combined.
Respondents were also asked about their outlook for 2020 as a whole; 11.8% noted an expected business increase and the remaining respondents expected decreases: 34.1% anticipated a decrease of 1% to 10%, and 30.6% expected a larger decrease of 11% to 25%.
“Interestingly respondents also noted significant issues with parts supply over the summer — especially OEM parts — with 75% of respondents indicating problems in this area,” said DAC.
The survey was conducted between Aug. 31-Sept. 6 and included more than 100 independent aftermarket installers from across Ontario.
