Lang Aftermarket iReport: Replacement Parts ‘share’ skids

“Although Replacement Parts account for nearly two-thirds of total light vehicle aftermarket product volume, they have declined in aftermarket product share over the past five years (2014 to 2019). Replacement Parts sales have grown at a slower annual pace than the overall light vehicle aftermarket since 2014.

“Despite increasing more than $8 billion at user-price between 2014 and 2019, Replacement Parts ranked third, among the four major groups of aftermarket products, in their annual growth rate. ”

— Jim Lang, publisher, Lang Aftermarket iReport

Four Major Product Groups

Car and light truck products can be grouped into four major categories: Replacement Parts, Accessories, Chemicals, and Tools & Equipment.

Replacement Parts

Replacement Parts are necessary for vehicle operation and subject to wear and tear.  They generated approximately 66% of 2014 car and light truck aftermarket product volume at user-price.

Replacement Parts diminished in light vehicle sales hare over the next few years. By 2017, they fell to 65.5% share and 64.0% of 2019 volume.

Despite their reduction in market share, Replacement Parts generated over $8 billion in product growth during this five-year span (2014 to 2019), the largest volume gain of the four major product groups.

Chemicals

All types of Chemicals, including both those necessary for vehicle operation and discretionary Chemicals (Waxes, Polishes, Cleaners, etc.), also suffered a decline in light vehicle product share between 2014 and 2019.

Chemicals fell from 14.5% of 2014 product volume to approximately 14.2% of the 2019 aftermarket.

Although declining in product share, Chemicals recorded a sales increase and ranked second in overall car and light truck product volume during this five-year span.

Accessories

Accessories modify the appearance, performance, and/or handling of light vehicles. Accessories are regarded as discretionary aftermarket purchases.

Accessories boosted their light vehicle aftermarket product share from less than 11.1% of the 2014 car and light truck product volume to nearly 12% of 2019 sales.

Accessories were third in total aftermarket product volume during the past five years, but they recorded the second largest product gain, nearly $2.5 billion at user-price.

Tools & Equipment

Tool & Equipment of all types added 50 basis points to their light vehicle product sales between 2014 and 2019, with their share climbing from 9.6 to 10.1% share.

Tools & Equipment expanded their volume by more than $1.9 billion over this five-year period.

Aftermarket Growth Share

Replacement Parts generated the largest share of light vehicle aftermarket product growth between 2014 and 2019, 57%, despite their market share decline.

Accessories represented nearly 17% of the more than $14 billion aftermarket product surge at user-price over this five-year span.

Tools & Equipment ranked third in growth share, at over 13%, with Chemicals accounting for nearly 13% of the total car and light truck product expansion.

Differing Product Growth Rates

Accessories achieved the highest annual product growth rate between 2014 and 2019, nearly 4.8%, followed by Tools & Equipment, which topped 3.6% in yearly growth.

Replacement Parts climbed at a 2.4% average annual pace, while Chemicals recorded 2.3% yearly growth between 2014 and 2019.

Implications

Since Replacement Parts generally are required for vehicle operation, the diminishing share of Replacement Parts volume means that a growing portion of aftermarket product sales will be generated by discretionary rather than non-discretionary purchases.

As a result, the aftermarket is becoming more sensitive to economic changes and variations in consumer income and purchase activity. This means that it is becoming less recession resistant.

In addition, the growing share of aftermarket product volume accounted for by Accessories and Tools & Equipment means that major distribution channels will experience product volume shifts in the coming years.

Covid-19 Impact

Although analysis of 2020 aftermarket data will not be completed for several months, it appears that Replacement Parts have gained share in aftermarket product volume, reversing the trend of the past several years.

While certain types of Accessories have recorded increases in 2020 volume, lower new vehicle sales have placed downward pressure on the sales of a number of other Accessories, since a large percentage of Accessory purchases occur when a vehicle (new or pre-owned) is purchased and during the first 12 months of ownership.

Six Major Takeaways

• Light vehicle aftermarket products can be grouped into four major categories: Replacement Parts, Accessories, Chemicals, and Tools & Equipment. See the 2021 Lang Aftermarket Annual for a historical analysis of the annual sales of these four major product categories.
• Replacement Parts have fallen in light vehicle aftermarket product share over the past five years, 2014 to 2019, from 66% to approximately 64% of light vehicle product sales.
• Chemicals, representing a mix of discretionary and non-discretionary products, suffered a modest decline in aftermarket product share between 2014 and 2019, from nearly 14.5% to approximately 14.2%.
• Accessories (non-discretionary purchases) recorded the largest increase in car and light truck product share over this five-year span, climbing from less than 11.1% to nearly 12.0% of product sales.
• Tools & Equipment expanded their aftermarket market share by 50 basis points between 2014 and 2019.
• Replacement Parts generated the largest portion of the over $14 billion aftermarket product surge at user-price during the past five years, approximately 57%, followed by Accessories, which were responsible for 17% of the aftermarket product expansion. Tools & Equipment were third, with more than 13% of aftermarket product growth, followed by Chemicals with just under 13% of the total increase.

Copyright 2021 by Lang Marketing Resources, Inc.

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