LAS VEGAS — Most auto repair facilities would like to forget about 2008, but consumer surveys indicate there is a revival of the consumer mindset that prevailed during the depths of the recession that year: deferral of automotive maintenance and repairs.
According to its consumer research, NPD Group Inc. predicts consumers will be holding tight to their money going into 2012. However, when they do spend, they will be looking for deals, according to David Portalatin, NPD's executive director of industry analysis, who discussed consumer trends with attendees at the 2011 Automotive Aftermarket Products Expo (AAPEX) in Las Vegas.
Volume sales in the automotive aftermarket was less robust through the first part of 2011 than a year ago, which he said is partly due to the fact that “it's hard to post a big gain after the really powerful results of 2010.” Another factor is that consumers are pessimistic about the recovery of the national economy.
“Regardless of whether some economic agency says we're in a recession or not, consumers do not feel very good right now,” he said, noting, “More than half believe we are headed for another recession. They are buying into the double-dip theory. More than half say the current economic conditions are going to persist for the foreseeable future. So they really don't see a lot of hope for improvement out there.”
According to NPD surveys, about 72 percent of consumers plan to decrease their spending overall and are looking for opportunities to cut back on spending. Consequently, while consumers will continue to keep and maintain their old vehicles, they will be less inclined to spend money on them.
“One of the best things that this industry has always had going for us is that we're one of the last things people can cut back on. So much of it is not discretionary. But as we saw in 2008, even some of those things can be deferred for a period of time and that's what we want to be on the lookout for,” Mr. Portalatin said.
“It does sort of raise the specter of potentially more deferral in 2011. Those who will do repair, the majority said they will take it to a professional—61 percent, comparable to last year,” he said.
“We continue to see more momentum going to the independent repair shop,” he added. “They're looking for that relationship they so often find in an independent repair shop and those are the folks that are supplied by the aftermarket. So I think you will continue to see momentum going in that direction. We will also continue to see momentum going back toward the tire store…tire stores have been doing pretty well and largely they're doing it through a lot of aggressive promotion around the oil change opportunity.”
But there is a statistically significant increase in people who said they will try to do some repairs themselves, Mr. Portalatin said.
“This is another canary in the coal mine that points us back to 2008…This is what we saw going from 2008 into 2009 as consumers said 'OK, we're going to have to repair some things but I'm going to have to save some money while doing it. I'm going to try to do it myself.' It's not a huge resurgence. It's not a major sea change back into do-it-yourself but it's a mindset on the part of some consumers that say 'I'm going to try to do some things.'”
Auto repair shops should be aware and adapt to the consumer mindset when it comes to maintenance.
“I think this elevated awareness around trying to take care of our cars and make them last longer is still with us but, again, we have to pay attention to areas where consumers will look for shortcuts or ways to cut back. I believe the oil change interval is one of them. We continue to see fewer people say they agree with any kind of three-month or 3,000-mile interval. Forty-one percent now say 'No, I don't believe that.' And when you look at what their actual interval is, you see more and more people extending that interval beyond 4,000 or beyond 5,000 miles,” Mr. Portalatin said.
“I do think that consumers are still looking for ways to preserve, to extend life, to restore, to repair, to maintain older vehicles. So as you think about how you're positioning our products, our services, our brand in the coming year, those are the things that are going to resonate with a lot of consumers. Those are the things that are going to enable you to take advantage of that consumer trend.”
Another major trend is the consumer desire for “deals” or getting more for their money.
“One of the first ways consumers reacted to the recession was to get really price-focused…I think that mindset is changing somewhat. Consumers are really looking for deals today more than they are absolute low price and when they are looking for a deal, what they really are trying to do is they're trying to leverage that deal as a vehicle to get more…Either more in terms of quantity or more in terms of quality. And I think both things are happening,” Mr. Portalatin said.
It used to be consumers were polarized between price-driven shoppers and those looking for quality. “What's happening today is those two camps have come together. Consumers want both. They want the better, they want the differentiated and they want to feel like they got a good deal on it. They want their cake and eat it, too,” he said.
There is a sizable segment of consumers willing to pay more for quality. “Consumers are focused on quality but they want a deal,” he said.