On the surface, the old farmer’s adage “Make hay while the sun shines” might be the perfect analogy for the automotive aftermarket today. Right now, the aftermarket sweet spot, defined as those vehicles between six and 12 years old, totals 101.5 million vehicles in the U.S. market. Next year, when 2008 model year vehicles enter the sweet spot, Experian Automotive projects the number of vehicles in the sweet spot to remain close to the same volume.
Clearly, there are ample opportunities for the automotive aftermarket today and well into next year.
But what happens down the line? Certainly, the drop in overall new vehicle sales in model year 2009 will eventually come back to haunt the automotive aftermarket. The industry was sailing along, selling more than 15 million vehicles per year, year after year. But then the bottom fell out and 2009 sales plummeted to 10.4 million.
Beginning in 2014, those 2009 model year vehicles will begin to cycle into the aftermarket sweet spot. The industry will see an immediate and steep drop in the number of vehicles in the sweet spot through 2015 and will continue to drop, although at a more moderate rate, through 2018. To see a larger version of the chart below, click here.
Of course, that doesn’t mean aftermarket companies are completely out of sunny days. They just need to adapt where they look. Take the farmer as an example. Before technology, he’d have to consult some dusty old almanac to figure out when the sun might shine. Today, he can just look up a 10-day forecast online.
It’s really not much different for aftermarket companies. They can utilize technology and information to help them figure out when the sun will shine, so to speak.