BETHESDA, Md. — The membership of the Auto Care Association (ACA), which includes suppliers to the automotive aftermarket, is upbeat about business in 2022, despite market uncertainties, according to a recent survey.
Mike Chung, director of market intelligence for the ACA, noted that the membership survey shows businesses' biggest concerns are supply chain and labor issues.
Supply-chain disruptions are of high concern for 90% of survey respondents, some of whom said they had to raise prices and make significant investments in inventory as supply chain and commodity prices continue to increase.
Labor shortage is a high concern to two-thirds of members surveyed (68%), with some saying they are offering bonuses and incentives to recruit and retain their staff.
Some warned that wages are increasing as a result, prompting an increase in product prices.
When asked about other issues, some survey respondents said they were concerned about the added costs and uncertainties associated with disrupted supply chains and sourcing, ultimately leading to increased end-user costs, Chung reported.
Inventory management continues to be a headache for many with some respondents saying they are constantly adjusting operations to adapt to changing market conditions.
In response to supply chain challenges, several respondents said they are increasing their inventory supply, expanding their supplier network and ordering items further in advance.
Some respondents are taking additional strategies, such as moving more production to local factories, offering customers additional terms and discounts over normal pre-season orders and ordering new product lines.
"Despite the numerous challenges, automotive aftermarket businesses have an overwhelmingly positive outlook — nearly 90% have a positive outlook for the next year," Chung said.
Three major drivers to the upbeat outlook is strong consumer demand; a robust industry supported by an aging and growing car parc; and fewer new vehicles available, which will increase repair needs for older vehicles.