LAS VEGAS — The automotive aftermarket has a lot to be optimistic about going into the new year: It is an essential business and it has a history of resiliency amid economic crises.
"Compared to new vehicles, compared to most other retail sectors, the aftermarket sees much more stable demand. We are essential and we're a great market to be in, rain or shine," Paul McCarthy, president of the Automotive Aftermarket Suppliers Association (AASA), said during the Virtual AAPEX Experience keynote session, Nov. 3.
The AASA and the Auto Care Association (ACA) co-sponsor the annual AAPEX.
Vehicle miles traveled and aftermarket sales tumbled last spring due to shutdowns in numerous states, but the aftermarket appears to be making a V-shaped recovery, according to Bill Hanvey, ACA president and CEO.
"After falling 8.8%, the aftermarket is forecast to grow 11.7% in 2021, on its way to a market size of $341 billion in 2023," he said.
"Going forward, there is reason for optimism," Mr. McCarthy added.
"Yes, the new normal may see less white-collar commuting, but we are also seeing around the world a structural shift from public transport to personal driving.
"People are leaving densely populated areas to areas where life requires more driving," he said, reasoning that if people are commuting less, they can live wherever they want.
During a panel discussion, Duncan Gillis, CEO of BBB Industries L.L.C., said he expects to see growth in aftermarket replacement parts sales.
"We are very bullish about 2021. … (Automotive aftermarket businesses) are relatively recession resilient, and we need to take advantage of that," he said.
"The result of the softer car sales will help us. Most people will continue to maintain their vehicles as opposed to buying new vehicles and I also see miles driven improving," added Greg Johnson, CEO of O'Reilly Auto Parts.
The panel discussed how the pandemic impacted the aftermarket and running a business: