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AAIA's outlook: Guarded

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BETHESDA, Md.—The automotive aftermarket is facing a lot of uncertainty in 2013, and the Automotive Aftermarket Industry Association (AAIA) is there to help its members in an uncertain time, according to President and CEO Kathleen Schmatz.

“Things are tightening up in a lot of ways,” Ms. Schmatz told Tire Business. For 2013, she said, the AAIA is projecting conservative growth in the automotive aftermarket of between 2 and 3 percent, compared with the industry's 4.1-percent growth in 2012.

The miles-driven figure for U.S. motorists is down, and volatility in gasoline prices is likely in the coming year, she said.

“Gas prices affect our members in so many ways,” she said. “They not only affect the habits of drivers, but also every part of the supply chain in terms of transportation costs.”

Despite the AAIA's guarded outlook for industry growth, Ms. Schmatz does expect to see more manufacturing—including auto parts manufacturing—return to the U.S. throughout 2013 and beyond.

“As the international marketplace changes, the significant cost savings manufacturers obtained from offshoring have diminished,” she said. “I think they will keep diminishing in this country, especially as we become more energy independent.”

One of the big problems for the AAIA and for the nation, Ms. Schmatz said, is that the government isn't investing in infrastructure. The two-year surface transportation reauthorization bill passed in 2012 will have some effect, she said, but it's too soon to tell how much.

“It's hard to look to Washington for leadership these days.”

The outcome of the November election is causing concern for the aftermarket, not least because of the absolute need for a quick agreement on taxes and spending cuts to avoid the so-called Jan. 1 “fiscal cliff,” according to Ms. Schmatz. But, she added, the AAIA's concerns go beyond that hurdle.

“The costs associated with the implementation of the health care law are our biggest concern. But the overall regulatory atmosphere is worrisome. Our members know that a lot of things could come down the pike.”

One positive note for the AAIA on the government front, however, was the passage of the Motor Vehicle Owners' Right to Repair Act in Massachusetts.

Right to Repair (R2R) passed not once, but twice, in Massachusetts—once in July before the legislature, and once by voters in November as a ballot question. The overwhelming support for the legislation represents a sweet victory for the AAIA, one of Right to Repair's chief supporters.

At this point, the burning need is to reconcile the two versions of the Massachusetts Right to Repair bill, which contain significant differences, according to Ms. Schmatz.

“They (the legislature) could do it tomorrow if they had the will,” she said. “But I expect it will happen in the first or second quarter of 2013.”

In any case, the Massachusetts victory for Right to Repair is only a first step, although a major one, in the AAIA's goal to see R2R become law in all 50 states.

“As you know, the work is far from done,” Ms. Schmatz said.

R2R will be the major topic at the 2013 Aftermarket Legislative Summit, she said. The AAIA sponsors the event annually to brief members on important legislative and regulatory issues and have them meet with their elected officials.

However, the dates for the 2013 summit have not been set yet because of the need to accommodate congressional schedules, Ms. Schmatz said.

Outside the legislative area, the AAIA plans to devote a major portion of its efforts in 2013 to training and education, according to Ms. Schmatz, noting, “2013 will be the education year for AAIA.”

In March, the association plans to unveil a blue-ribbon task force to identify and promote career opportunities in the aftermarket industry. When asked if other associations will participate in the task force, Ms. Schmatz said, “Count on it.”



To reach this reporter: mmoore@crain.com; 202-662-7211.
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