Lang Aftermarket iReport: 2021 Repair-Age Sweet-Spot Makeover

“The vehicle repair-age sweet-spot embraces cars and light trucks 6 to 10 years old. These vehicles average the highest replacement rates across many types of automotive products. Big changes will occur in the number and types of light vehicles populating the repair-age sweet-spot between 2016 and 2021.

“During 2021, more vehicles will be in the repair-age sweet-spot than there were five years earlier and they will represent a larger share of vehicles in operation (VIO). The nameplate mix in the 2021 repair-age sweet-spot will be different from five years earlier along with the light truck share. This will have significant aftermarket consequences.”

— Jim Lang, publisher, Lang Aftermarket iReport

New Vehicle Sales Change Sweet-Spot

The five vehicle model years (2011 through 2015) in the 2021 repair-age sweet-spot will be the result of the strong new car and light truck sales recovery following the 2008 Great Recession.

U.S. light vehicle sales reached 12.8 million during 2011 (up from 10.3 million in 2009) and totaled 14.5 million in 2012 and 15.6 by 2013. The new vehicle market continued to increase, averaging more than 17.0 million in annual volume during 2014 and 2015.

As a result, approximately 76 million cars and light trucks 6 to 10 years old will be on U.S. roads during 2021. This will be a surge of 10 million cars and light trucks over the 2016 repair-age sweet-spot.

2016 Sweet-Spot

In 2016, vehicles 6 to 10 years (the repair-age sweet-spot) reflected car and light truck annual sales during 2006 to 2010, which were pounded by the 2008 Great Recession.

Annual vehicle sales during 2006 and 2007 were strong, averaging 16.3 million, but historic changes were just ahead.

The new car and light truck market sank to 13.2 million in 2008. The following year, car and light truck volume bottomed out at 10.4 million. Vehicle sales rebounded moderately to 11.5 million during 2010.

As a result, there were approximately 17 million fewer cars and light trucks in the light vehicle age repair-age sweet-spot during 2016 than five years earlier in 2011: 66 million versus 83 million.

Foreign and Domestic Nameplate Mix

The foreign and domestic nameplate mix of the 2021 repair-age sweet-spot will be decidedly different from what it was in 2016.

Foreign nameplates rose from a 39% average share of new car and light truck volume during 2001 to 2005 to 49% of car and light truck sales during 2006 to 2010.

Nameplate Sweet-Spot Changes

As a result, foreign nameplates expanded their share of the repair-age sweet-spot during 2016 by more than one-quarter over 2010.

This trend will persist, as foreign nameplates have continued to expand their share of the new vehicle market between 2011 and 2016.

Foreign nameplates will account for 54% of the vehicles in the repair-age sweet-spot during 2021, up from 51% five years earlier. This will shift where vehicle repairs are performed and the types of brands used. A secondary consequence will be an increase in the user-price of products and services per repair.

Cars Versus Light Trucks

A larger share of light trucks will be the third difference in the 2021 repair-age sweet-spot compared to five years earlier. Lang Marketing estimates that light trucks will account for over 58% of vehicles in the 2021 repair-age sweet-spot compared to less than 50% five years earlier.

This will be positive for aftermarket product volume since light trucks average greater annual aftermarket product volume (repair parts and accessories) per vehicle than passenger cars.

Aftermarket Impact

The larger size of the 2021 repair-age sweet-spot along with its increased share of foreign nameplates and light trucks will help to boost product volume in the aftermarket as it recovers from the onslaught of the Covid-19 virus. Sweet-spot changes in 2021 will also shift where repairs are performed and the brands of products that are purchased.

Six Major Takeaways

• The car and light truck sales rebound in the U.S. during 2011 through 2016 (after the Great Recession of 2008) will boost the vehicle population of the 2021 repair-age sweet-spot.
• Approximately 10 million more cars and light trucks will be in the repair-age sweet-spot during 2021 than five years earlier, a 13% surge.
• Foreign nameplates will hold a larger share of the 2021 repair-age sweet than they did five years earlier: over 54% versus 51%. This will shift where repairs are performed and the brands of products purchased. It will also provide a tailwind for the increased user-price of products and services.
• Light trucks will represent a larger share of the 2021 repair-age sweet-spot compared to 2016. Lang Marketing estimates that light trucks will account for 58% of the repair-age sweet-spot VIO in 2021 compared to less than 50% of the repair-age sweet-spot five years earlier.
• The larger vehicle population of the 2021 repair-age sweet-spot and its differing mix of nameplates and types of vehicles will help to boost aftermarket volume next year.
• The increased impact of the repair-age sweet-spot on aftermarket product and service volume during 2021 will help to offset the lingering economic and social consequences of Covid-19 that will extend into next year.

Copyright 2020 by Lang Marketing Resources, Inc.

NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.