Come celebrate the good times—yes, that appeared to be the prevailing mood at the Automotive Aftermarket Industry Association (AAIA) Town Hall meeting Nov. 3, as well as on the show floor of the Automotive Aftermarket Parts Expo (AAPEX) show during the Automotive Aftermarket Industry Week in Las Vegas Nov. 2-5.
The show floor was busy and exhibitors generally seemed upbeat. Some booths were bustling with activity as attendees scanned displayed products and chatted with company representatives.
When I asked exhibitors of auto maintenance parts and equipment how their businesses were doing this year, they said sales were up from 2009 and they all recited the same mantra: “Everyone's holding on to their vehicles longer.”
Tenneco Inc., for example, has seen a higher-than-expected upsurge in its sales of shocks and struts, parts that usually don't need replacement until around the 50,000-mile mark.
Industry research organizations, and even auto manufacturers, predict the trend will continue in the near term.
“The stars are aligned perfectly,” said Town Hall panelist Eli Futerman, co-president and CEO of Rochester, N.Y.-based Hahn Automotive Warehouse Inc. “We should be able to capture market share and growth opportunities, increased opportunities that might not have been there three to five years ago.”
However, it seemed to be reserved joy, like everyone was hesitant to let their hair down. After all, the automotive aftermarket is a lot like a Caribbean island waiting for the next inevitable, devastating hurricane—read that “market forces”—to come along and destroy everything it has built up.
Or it could be that amid all the depression and belt-tightening of the Great Recession, tire dealers and auto repairers feel a little guilty about enjoying increased sales this year.
“In a perverse sense, we've actually benefitted, everyone in this room has benefitted, from the difficulty of selling new cars,” noted panelist Kevin Freeland, COO of Roanoke, Va.-based Advance Auto Parts Inc. Ironically, when times are bad, auto maintenance sales are good.
But there also is that understanding shared among business veterans that what goes up must come down, at some point. Sooner or later, that nagging, pent-up urge will be just too much and everyone will dump their old clunkers and run out to buy shiny, new vehicles. And the cycle will begin again.
The overall panel consensus: Businesses have readjusted their operations to survive the recession, but be cautious and don't forget what you've learned during the downturn.
At the conclusion of the town hall meeting, AAIA President and CEO Kathleen Schmatz noted that in all her years in the industry, “even in a good year, no one would admit it. No one ever wanted to say, 'Business was good'…. This year people are saying, 'Business is good.'”
Then she asked each of the four panelists if business is good, to which each responded: “Yes.”
“Business is good and executives are admitting it. I never thought I'd live this long,” she declared, adding, “We're celebrating. And you know what? It's about time.”
So there you have it. Tire dealers and auto repairers, it's OK to revel in the good times if your business has been upbeat this year. Now, before the economy takes another surprise turn, sneak into your back office, toss some confetti and pop open a bottle of champagne.
Then get back to work!