Lang Aftermarket iReport: Changing product use by type of light vehicle

“Two forces drive light vehicle U.S. aftermarket product volume: the number of cars and light trucks on the road, and aftermarket product use per vehicle.

“Over the past ten years, the source of aftermarket product growth has shifted due to major changes in the expansion rate of the vehicle population on U.S. roads and the average product use per vehicle.”

— Jim Lang, publisher, Lang Aftermarket iReport

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Aftermarket Impact of the 2020 Virus

“Next Wednesday, Lang Marketing will begin an exclusive series of weekly iReports focused on the dramatic aftermarket impact of COVID-19 during this year and for many years to come. Don’t miss these special iReports that will provide you with vital information and analysis covering this unprecedented market-changing event, which are available nowhere else.”

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Low VIO Growth

The growth of vehicles in operation (VIO) was abruptly stopped by the Great Recession of 2008.

The historic plunge in annual new vehicle volume bottomed in 2009, when sales were 35% lower than in 2007. After a slow recovery, annual new vehicle sales did not return to pre-recession levels until 2014.

As a result of reduced annual car and light truck sales, the number of vehicles in operation (VIO) virtually plateaued between 2008 and 2014.

During this six-year span, all aftermarket product growth resulted from increasing aftermarket product use per vehicle. Between 2009 and 2014, annual aftermarket product volume per vehicle climbed approximately 10%, from $363 to $399, at user-price.

Resurgent Vehicle Growth

The number of cars and light trucks in the U.S. began to increase after 2015, reflecting the surge of new vehicle sales, which averaged more than 17 million per year during 2015 through 2019.

The light vehicle population grew over 2.0% annually between 2014 and 2019, a far cry from the slight reduction in VIO during 2014 compared to 2008.

Increasing Product Use Per Vehicle

While the number of vehicles began to rapidly climb between 2015 and 2019, the growth of product use per vehicle slowed as newer vehicles, which require less aftermarket product volume per mile, increased in number across the U.S.

In 2018, the average light vehicle in the U.S. averaged only 3.0% more in annual aftermarket product volume than during 2014.

During this four-year span, most aftermarket product growth was generated by the increasing number of vehicles in operation (particularly vehicles 12 years and older) rather than by the annual use of aftermarket products per vehicle.

Dramatic Shift in Product Use by Type of Vehicle

Although aftermarket annual product volume per vehicle increased only moderately between 2013 and 2018, there was a dramatic change in aftermarket product use by type of vehicle.

During 2018, light trucks generated one-third more in annual aftermarket product use per vehicle than did passenger cars. Product use per light trucks increased more than 3% between 2014 and 2018, while passenger car annual product use per vehicle declined 2% over this four-year span.

Over the past ten years, total annual aftermarket product for light trucks has climbed more than 33% compared to only a 10% increase in annual passenger cars product use.

Aftermarket Impact of Changing Product Use

With the shift in aftermarket product volume between cars and light trucks last year, light truck product sales per vehicle significantly increased during 2019 compared to 2018, while passenger car product volume per vehicle declined.

Product use per light truck reached a record-high last year, while 2019 product volume per passenger car fell below 2014 levels. Complete details will be provided in the upcoming Lang Aftermarket Annual 2021, which is scheduled for electronic publication in mid-May.

The increased aftermarket product volume per light truck is being fueled by the growth of Accessory purchases (especially for pickups) and the generally higher average cost of many aftermarket products for light trucks compared to passenger car products.

The Next Five Years

Lang Marketing projects that light trucks will generate virtually all aftermarket product growth in the U.S. during 2020 through 2024, expanding their share of light vehicle aftermarket product volume to approximately 70%.

Six Major Takeaways

• Aftermarket product growth is driven by two forces: the number of cars and light trucks on U.S. roads, and aftermarket product use per vehicle.
• There has been a significant shift in the source of annual aftermarket product growth, with changes occurring in both the rate of vehicle expansion on U.S. roads and average product use per vehicle.
• With virtually no increase in the light vehicle VIO between 2008 and 2014, almost all aftermarket product growth resulted from increasing aftermarket product volume per vehicle.
• As the number of vehicles began to increase rapidly between 2014 and 2019, product use per vehicle slowed as newer vehicles, which require less aftermarket product volume per mile, have grown in number across the U.S.
• Aftermarket annual product use per light truck reached a record-high during 2019, while product use per passenger car declined last year.
• Complete details about aftermarket product use per vehicle and the continuing shift in aftermarket product volume between cars and light trucks are contained in the 2021 Lang Aftermarket Annual, which will be electronically published in approximately mid-May.

Copyright 2020 by Lang Marketing Resources, Inc.

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