Canada’s automotive aftermarket is seeing a slight decline in 2024 with one group warning of long-term challenges ahead, especially as fewer new vehicles require gasoline as their sole source of power.
A forecast from DesRosiers Automotive Consultants highlighted a potential future shift in demand for aftermarket services as fewer vehicles enter the critical years for parts replacement and maintenance, underscoring the need for the industry to adapt as Canada’s vehicle landscape changes.
DesRosiers’ data show that gasoline consumption was on the upswing as the country recovered from the COVID-19 pandemic. But numbers dropped in the first half of 2024.
“Indicators point towards some minor softness in the automotive aftermarket in Canada this year,” said Andrew King, managing partner at DesRosiers, “though Canadians are continuing to rely heavily on their vehicles and continuing to invest in their upkeep and operation.”
The consultancy attributed the dip in gasoline consumption partly to the changing structure of Canada’s light vehicle fleet, specifically the rising adoption of zero-emission vehicles (ZEVs). Currently, ZEVs make up 2.6 per cent of the total light vehicle fleet in Canada, while the second quarter of 2024 recorded a significant rise in ZEVs’ share of new registrations, reaching 12.9 per cent.
This shift toward ZEVs is reshaping fuel demand, suggesting that the recent decline in gasoline use could be an early indicator of broader changes to come.
Alongside fuel consumption trends, the report highlighted a modest decrease in retail sales for automotive parts, accessories, and tire stores in the first half of 2024, showing a 1.1 per cent drop. However, DesRosiers emphasized that sales remain 41.2 per cent higher than the first half of 2019 in dollar terms, outpacing inflation and reflecting the strong consumer investment in vehicle maintenance and operation.
This sustained spending suggests that Canadians continue to prioritize the upkeep of their vehicles despite economic headwinds.
Looking ahead, King cautioned that lower vehicle sales from 2019 to 2023 could bring challenges for certain aftermarket sectors later in the decade.
“The small volumes of vehicles sold in 2019-23 will start to work their way into their prime aftermarket years in the coming years,” he noted.
