LAS VEGAS —Independent vehicle repair shops will be seeing growing numbers of older vehicles, import brands and light trucks and CUV/SUVs pulling into their service bays in the coming years, according to market analysts.
IHS Markit and NPD Group Inc. analysts, during presentations at the 2018 Automotive Aftermarket Products Expo (AAPEX), both noted these trends in the vehicle parc can have a positive impact on the automotive aftermarket for those who adapt their operations and marketing strategies.
Mark Seng, IHS Markit's global aftermarket practice leader, automotive, noted a growing shift in purchases of new light trucks and CUVs at the expense of compact cars.
In 2017, light trucks/CUVs accounted for 65 percent of vehicles in operation (VIO) in the U.S.; in 2018 that share was expected to grow to 70 percent.
Overall new vehicle sales have leveled off since hitting record highs in 2015-16. About 17.2 million new vehicles were sold in 2017 and IHS predicted the total would slip 0.6 percent to 17.1 million in 2018.
About 34 percent of these new vehicles sales were compact and traditional CUVs, he said.
Meanwhile, sales of import brands of vehicles (by OEMs with headquarters outside the U.S.) are expected to continue outpacing the Detroit 3 vehicle brands, he said.
In 2018, imports were expected to account for 46 percent of new vehicle sales and by 2023 they are expected to account for nearly half of sales.
While sales of new vehicles are plateauing, vehicles on the road are continuing to age as consumers hang on to their older vehicles. The average age of vehicles in operation has risen to 11.7 years.
About 40 percent of the VIO are vehicles that are 12 years or older and about 26 percent are vehicles that are six to 11 years old.
That bodes well for independent repair shops for years to come as they are usually the ones that repair out-of-warranty vehicles, Mr. Seng said.
"On the consumer side, one of the biggest challenges we are facing as an industry is opposing forces," said Nathan Shipley, executive director and industry analyst for NPD's automotive aftermarket division.
"If you're a marketer, if you're a manufacturer, a retailer, you're still trying to market your products and services to the boomer generation that's on the way out, so to speak in terms of their peak driving years, if they retire. And you're also trying to market to a millennial generation that is coming into their peak driving years now. And so it's an opposing force.
"Another opposing force that we have as an industry is that manufacturers are looking at direct-to-consumer," he said. You have a brand that is strong enough, that can stand on its own without retail support and you're trying to find ways to go direct to consumer to circumvent the traditional channels of getting your products in the hands of the consumers. And we're seeing this in a lot of other industries, not as much in auto."
Mr. Shipley gave the example of MacNeil Automotive Products Ltd., which sells its WeatherTech vehicle floor mats directly to the consumer.
Private brands are grabbing a larger share of the market, he noted.
"A lot of retailers in a lot of categories are pushing their own brands of products out there, which to the consumer, do they know it's a private label or not? For all they know it's just another brand on the shelf," Mr. Shipley said, noting that Amazon.com Inc. has launched its own brand of motor oil.
"Our forecast for 2019 is that we expect the market to be flat for 2019," said NPD's Mr. Shipley, noting that the miles-driven growth rate has slowed, prices have increased 4 to 5 percent and the consumer price index for new cars has stabilized.
"The economy is strong; the aftermarket is strong; we should feel good about our industry as a whole," he said.