Auto parts' selling prices softening — NPD

PORT WASHINGTON, N.Y. (Aug. 12, 2016) — For the first time in four years, unit growth of automotive aftermarket parts is outpacing dollar-volume growth, reflecting increased sales of lower-priced products, according to automotive market research firm NPD Group Inc.

The mid-year 2016 results show that for the first six months of this year, unit sales grew 1.8 percent, while dollar-volume sales were up 1.5 percent, measurably slower than in prior years, NPD said.

“A few key trends have been favorable to the automotive aftermarket industry so far this year, notably that miles driven continues to increase, and gasoline prices, on average, are lower than several years ago,” said Nathan Shipley, NPD's director and automotive industry analyst.

“Nevertheless, the industry's performance in terms of dollar growth has been softer than prior years,” he said, “influenced by a few main themes: the lack of no major weather extremes such as extreme cold or rain, which generally provides a boost to the industry; a change in the mix of what's selling as we see from the decrease in average selling price, yet strong growth in unit sales; and the fact that two years of 4-percent dollar growth set high standards for 2016.”

On the other hand, the growth rate of unit/quart sales is accelerating. This shift combined with a dip in average selling price ties in with the fact that lower-priced products are selling in place of more premium products, the research firm said.

The movement toward lower-priced products selling in place of more premium products is evident among the industry's top three category trend drivers — batteries, motor oil, and wiper blades — which represent over 43 percent of total industry volume, NPD noted.

The average selling price for batteries declined 2 percent, as “good” grade unit share grew five share points at the expense of the “better” and “best” grades, NPD said.

The average price per quart of motor oil slipped 1 percent; the two growing segments, full synthetic and high mileage, experienced quart price declines thanks in large part to more promotions in the first half of this year compared with last year, NPD said.

Meanwhile, in the wiper blade category, value and premium unit volume declined while standard wipers grew. Among beam blades, the standard types grew while premium declined, NPD reported.

“NPD forecasts that automotive aftermarket retail dollar sales will grow the industry about 2.7 percent for the year, returning to a more modest rate of growth along with annual miles driven,” Mr. Shipley said. “Pricing, promotions, and the categories in which consumers choose to invest for the remainder of the year will be influential to the year-end results.”