Lang Aftermarket iReport: Domestic vehicle aftermarket heats up

“Competition is growing more intense in the domestic nameplate aftermarket despite its shrinking product volume and share.

“Foreign nameplates will generate all light vehicle aftermarket product growth over the next five years, as domestic nameplate product share continues to decline. Nevertheless, competition is intensifying in the shrinking domestic nameplate aftermarket at the Installer, Wholesale, Retail and Product (Brand) levels.”

–  Jim Lang, publisher, Lang Aftermarket iReport


Falling Domestic Nameplate Aftermarket

Lang Marketing projects that the aftermarket product share of domestic nameplate cars and light trucks (not including Transplants) will shrink over the next five years.

Foreign nameplates will generate all car and light truck aftermarket product growth in the U.S. during 2019 through 2023.

Domestic Aftermarket Product Share Falls

Domestic nameplate car and light truck aftermarket product share fell from 64% in 2003 to less than 47% in 2018. Domestic nameplate aftermarket product strength will continue to decline over the next five years.

Competition Grows in the Shrinking Domestic Market

As the domestic nameplate car and light truck market (not including Transplants) declines, competition in that market sector is growing at all levels: Installer, Wholesale, Retail, and Product (Brand).

Installer Market Competition

Competition in the Installer market for domestic nameplate car and light truck repair is intensifying.

Two factors are causing this: domestic nameplate Dealers are expanding their service bay activities, and many Independent repair outlets (particularly Service Stations & Garages) continue to focus on domestic nameplate repair.

Many domestic nameplate Dealers are expanding their service bay activities to include a broader mix of vehicle age categories and nameplates, beyond what they have traditionally focused on. This all-makes and all-year repair strategy has become much stronger among domestic nameplate car Dealers than among their foreign nameplate counterparts.

Many Independent repair outlets, particularly Service Stations & Garages, continue to focus their repair on domestic nameplates.

With the shrinking number of domestic nameplate light vehicles on the road, this market focus of many Independent repair outlets has intensified competition in the repair of domestic nameplates, which account for an increasingly smaller share of the total repair market.

Wholesale (Commercial) Market: Retail Auto Parts Stores

As Retail Auto Parts chains expand their Wholesale (Commercial business), most of this growing Commercial market competition will focus on the domestic nameplate aftermarket.

Jobber Wholesale volume will continue to be generated largely by the domestic nameplate DIFM market, even as Retail Auto Parts Store push their way into that market sector.

Retail Market: Internet Sales

Internet auto parts sales are largely concentrated in the Do-It-Yourself (DIY) market.

With domestic nameplates holding a strong majority of the DIY market, this means Internet Sellers, as they expand their aftermarket presence, are increasing competition in the domestic nameplate sector of the DIY market at a faster pace than they are in the foreign nameplate DIY sector.

Product (Brand) Level: Private Label Volume

Growing Private Label activity in the Traditional distribution channel and among Retail Auto Parts Stores will intensify competition for domestic vehicle product sales since repair outlets focusing on foreign nameplate cars and light trucks are less inclined to use Private Label products than are repair outlets that focus on domestic nameplates.

Foreign Nameplate Competition

Competition at all levels of the foreign nameplate aftermarket in the U.S. is increasing. However, it is not climbing as quickly as competition in the domestic vehicle sector.

The expanding size of the foreign vehicle aftermarket is compensating for the pressure of its growing competition. In contrast, the shrinkage of the domestic nameplate aftermarket is intensifying competition pressure within it.

Six Major Takeaways

  • Competition in the domestic nameplate light vehicle aftermarket is increasing, despite its diminishing product share and volume.
  • Domestic nameplate product sales have grown at less than half the annual pace of the overall light vehicle aftermarket over the past five years. Nevertheless, product competition in the domestic nameplate light vehicle aftermarket is heating up.
  • Domestic nameplate Dealers have aggressively expanded their bay activities to a wider range of vehicle nameplates and age categories. This, along with the continued focus of many types of Independent repair outlets on domestic nameplate repair, has increased competition within that market sector despite its shrinking size and share.
  • The expanding Commercial sales of Retail Auto Parts Stores are increasing Wholesale product competition in the domestic nameplate DIFM sector, even as that segment of the aftermarket declines in product share and volume.
  • Internet auto parts sales are expanding most rapidly in the DIY market, which has the preponderance of its volume generated by domestic nameplate cars and light trucks. This will increase the domestic nameplate DIY competition.Growing Private Label volume is intensifying domestic nameplate brand competition, since Private Labels are used disproportionally by repair outlets that focus on servicing domestic nameplate light vehicles.

Copyright 2019 by Lang Marketing Resources, Inc.

NOTESpecial thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.