Lang Aftermarket iReport: Independent aftermarket soars $22 billion

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“The Independent (non-Dealer) light vehicle aftermarket surged a record $22 billion in product sales between 2008 and 2018 at user-price. The Do-It-For-Me (DIFM) segment generated most of the Independent aftermarket product growth.”

“Two primary forces have driven Independent aftermarket expansion over this ten-year span: a drop in the number of Vehicle Dealers nationwide, and the aging U.S. vehicle population. Three major aftermarket distribution channels have benefited from Independent (non-Dealer) aftermarket product growth.”

– Jim Lang, publisher, Lang Aftermarket iReport

Record Independent Aftermarket Growth

The Independent (non-OE) U.S. aftermarket achieved its strongest product growth between 2008 and 2018.

Virtually all Independent light vehicle aftermarket product expansion was achieved by the Do-It-For-Me (DIFM) segment.

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Forces Driving Independent Market Growth

Independent light vehicle aftermarket product expansion was driven by a drop in the Vehicle Dealer count between 2008 and 2018 and the aging U.S. vehicle population.

Fewer Vehicle Dealers

The Vehicle Dealer population in the U.S. (especially U.S. nameplate outlets) fell by approximately 2,200 between 2008 and 2018.

Despite a modest uptick in the number of Vehicle Dealers during the past five years, there were 13% fewer Dealer bays (a loss of 44,000 service bays) during 2018 compared to 2008.

Domestic Nameplate Dealers Suffer Largest Loss

Most of the DIFM market loss suffered by Dealers was concentrated among domestic nameplate outlets, reflecting their disproportionate percentage of Dealer closings and the decline in domestic nameplate share of new vehicle sales.

This latter development reduced the number of domestic nameplate vehicles 5 years and under, which are the focus of much Dealer bay activity.

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Some Dealers Convert to Independent Outlets

Some Dealers whose franchises were cancelled have continued in business as Used Vehicle Outlets with service bays.

These Dealers transitioned from the OE to the Independent segment of the DIFM market.

Historic Vehicle Age Growth

Vehicle age has climbed at a record pace. Over the past 10 years (2008 to 2018), the average age of vehicles on U.S. roads increased by more than 2 full years, the greatest surge in light vehicle average age since WWII, approximately 75 years ago.

This reflects the increasing life expectancy of vehicles on U.S. roads and the soaring number of vehicles at least 12 years old in operation.

While many Dealers are shifting to an all-makes service bay approach and expanding the age range of vehicles they repair, most Dealer bay volume is generated by vehicles under 6 years old.

Independent Outlets Repair Older Vehicles

Independent (non-Dealer) service bays account for a disproportionate share of repair performed on vehicles over 5 years old.

The record number of vehicles at least 12 years old has expanded the DIFM aftermarket product volume of Independent outlets.

Distribution Channel Changes

The forces reshaping the DIFM market share of Independent (non-Dealer) outlets have also changed the growth of non-Dealer (Independent) distribution channels in the light vehicle market.

Six Major Takeaways

  • The Independent light vehicle aftermarket achieved a record $22 billion product gain at user-price over the past ten years (2008 to 2018).

  • The car and light truck Do-It-For-Me (DIFM) market generated over 96% of car and light truck product growth.

  • Independent aftermarket growth has been boosted by a drop in the Vehicle Dealer population over the past ten years, following the Great Recession of 2008.

  • There were approximately 2,200 fewer Dealers in 2018 compared to 2008, resulting in the loss of 44,000 Dealer bays.

  • The growth in vehicle age has fueled Independent (non-Dealer) aftermarket product growth. While many Dealers have shifted to an all-makes, all-years vehicle service strategy, most Dealer bay volume is still generated by vehicles under 6 years of age.

  • The forces shaping the DIFM market share of Independent (non-Dealer) outlets also increased the growth of three major Independent distribution channels in the light vehicle aftermarket: Integrated, Traditional and Import.

Copyright 2019 by Lang Marketing Resources, Inc.

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

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