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New vehicles are critical to the automotive aftermarket, including ensuring a steady future supply of sweet spot vehicles, so there is natural concern when there are fewer new cars being sold year after year.
This has been the case in recent years since the COVID-19 pandemic took hold. In the years leading up to 2020, Canada had at least 1.8 million new unit sales from 2014 to 2019, including cracking two million in 2017.
In 2022, total sales didn’t even break 1.5 million.
It’s been a similar story south of the border. After hitting 17 million new cars sold in 2019, sales tumbled to 13.9 million in 2022.
New vehicles have five impacts on the aftermarket, according to Lang Marketing.
First, new vehicles impact the average age of all vehicles in operation. And how many newer vehicles there are “determines the population of the critical repair-age sweet-spot (vehicles aged six to 10 years old), which brackets cars and light trucks with the highest rates of annual usage across many aftermarket products,” it said in a recent Aftermarket iReport.
Furthermore, new vehicles are a key market for many types of accessories — new vehicles are often modified to fit lifestyles and usage needs of the owner.
But the fact that many vehicle owners purchased accessories during the pandemic to outfit their current vehicles has buoyed the industry, Lang noted.
Two other impacts are that vehicles five years and newer are traditionally the primary source of business in dealer service bays and that new vehicles average the highest annual mileage — meaning that older vehicles are now getting more mileage as they’re not being traded in or sold so consumers can buy new models.
So with a smaller pool from which to draw customers as the new to five age group has significantly shrunk, dealers are refocusing. They’re looking at older cars, those that the aftermarket could consider to be in their sweet spot, Lang reported.
As for more mileage on older vehicles, Lang saw this as creating more demand for aftermarket product.
“Since older vehicles use more aftermarket products per mile than newer ones, this mileage shift leads to more wear and tear on the aftermarket parts of older vehicles. It increases aftermarket product use,” it said.
