With average age rapidly growing, the types of vehicles that the aftermarket is servicing are expanding just as quickly.
What was once considered anything in the six-12-year-old range has now expanded to well beyond that, explained Todd Campau, aftermarket practice leader at S&P Global Mobility.
A major driving force is passenger cars, he said at AAPEX 2023 during his presentation, Trends Impacting the North American Aftermarket.
“The passenger car average age is growing nearly out of control at this point because we’re basically, when you think about it, we’re putting 20 per cent of all new sales into passenger cars. They maintain about 40 per cent market share,” he said.
The average age of a passenger car in the U.S. was 13.8 years. Until passenger car market share drops to around 20 per cent, average age is going to continue to run up.
Light trucks, by comparison, are at 11.8 years now after they sat at about 11.5 consistently for some time.
“We’re beginning to see critical mass reached in that crossover utility space. And it’s been holding that high market share for a few years,” Campau observed. “So we’re going to start to see it climb a little bit on the light truck side, too.”
But that’s only part of the story for Campau. More interesting is how these vehicles are moving through their lifecycles.Over the next 10 years, the U.S. is expected to add 19 million vehicles to its fleet that are over the age of eight years.
“This tells me that the sweet spot is going to continue to grow and elongate,” Campau said. “If we have almost 100 million vehicles in 2033 that are over 16 years of age, No.1, average age is going to continue to climb because of this. And, No. 2, we’re going to be seeing a lot more repairs for a lot older vehicles for a longer period of time.”
This is the cumulative effect of vehicle sales during the Great Recession that started in about 2008 and the supply chain impacts of the COVID-19 pandemic and the economic uncertainty since.
In other words, years in which the vehicles in operation numbers would have been replenished and were not — vehicles that would have been typically replace were not. So older vehicle remained on the road and were delayed until later, if at all. About half of all vehicles in the vehicle fleet are going to be older.
“So really good news for us because almost all those repairs … to our channel,” Campau pointed out.
But that means non-traditional players will be coming after traditional business as they see growth opportunities.
“You are seeing more probably OEs trying to get into repairing older vehicles for sure. And this is why. They’ve discovered that this work can be positive to the bottom line. And it’s better than the warranty work they get stuck doing for all the recalls and things like that,” Campau said. “And so they’re going to continue to push into trying to repair more of these old vehicles. But in general, right now, that’s our sweet spot. That’s where we do the best work. And it’s going to grow rapidly.”
