Lang Aftermarket iReport: Surging vehicle age reshapes aftermarket
“Light vehicles on U.S. roads reached a record-high average age on January 1, 2019. This 15% gain over the past ten years was one of the largest average-age increases in more than 50 years. What makes this age growth even more remarkable is that it occurred despite a record surge in new vehicle sales between 2015 and 2018, which should have dampened the average age of vehicles.
“Increasing vehicle age (which is likely to continue over the next several years) is generating big aftermarket changes, ranging from the age boundaries of the repair-age sweet-spot to the types and brands of products used in vehicle repair and how these products are distributed.”
— Jim Lang, publisher, Lang Aftermarket iReport
Record-Breaking Vehicle Age
Cars and light trucks in the U.S. averaged 12.3 years at the beginning of January 2019, creating the oldest mix of vehicles ever on U.S. roads.
Americans are keeping older vehicles longer, as the price of new cars and light trucks keeps climbing to record levels each year and the life expectancy of vehicles continues to expand.
The increasing repair-age of vehicles on U.S. roads and the surging number of older vehicles are having a significant impact on the aftermarket.
Expanding Vehicle Repair-Age Sweet-Spot
The vehicle age sweet-spot for cars and light trucks (an age group with above-average rates of vehicle product replacement) is being pushed to older age categories by the changing age mix of vehicles in the U.S.
Traditionally defined as vehicles 6 to 10 years old, the sweet-spot today for many products covers vehicles 8 to 14 years old. The changing age mix of vehicles and longer-lasting OE parts are revising the lower and upper boundaries of the repair-age sweet-spot to include a broader and older vehicle age mix.
The aging U.S. vehicle population and the rapidly growing number of cars and light trucks at least 14 years old are reshaping the types of aftermarket products sold.
So-called “value” products, which provide reasonable quality at moderate prices, are gaining DIFM and DIY volume share as consumers opt for lower-priced products to repair older vehicles.
Differences in the average age of domestic versus foreign nameplates are causing shifts in the types of products used (value versus premium) according to the nameplate (domestic and foreign) of vehicles.
Aftermarket Brands Versus OE Brands
The increasing age of the vehicle population is generally positive for aftermarket (non-OE) brands. They are less expensive than OE brands, and owners of older vehicles are often price sensitive to vehicle repair costs.
Where Products Are Sold and Installed
Consumers with older vehicles are more likely to have them repaired at Independent (non-Dealer) outlets than they are to patronize Dealers.
This is positive for Independent (non-Dealer) aftermarket growth in both repair outlet strength and aftermarket brand share.
In response to this trend, many Dealers are promoting their service bays to all makes and age groups of vehicles, and they are using a wider range of product brands (beyond OE brands) and adjusting labor rates for older vehicles.
How Brands Are Distributed
The greater frequency with which aftermarket brands are used to repair older vehicles is influencing how products are distributed. Aftermarket (non-Dealer) product brands are most frequently distributed by three channels: Traditional, Integrated, and the Import channel. This has helped boost the product volume and share of each of these channels in the light vehicle aftermarket.
Primary Market Driver
The aging vehicle population is the primary factor influencing the changing usage rates of many types of products and reshaping aftermarket distribution patterns.
Six Major Takeaways
- The average age of cars and light trucks on U.S. roads continues to climb, reaching a record-high 12.3 years at the beginning of 2019.
- The vehicle repair-age sweet-spot for cars and light trucks is being pushed into older vehicle age categories by the changing age mix of vehicles in the U.S. and longer-lasting parts on new vehicles.
- The aging U.S. vehicle population is reshaping the types of aftermarket products that are sold, with “value products” gaining DIFM and DIY volume share.
- Differences in the average age of domestic and foreign nameplates are shifting the types of products used (value versus premium) according to vehicle nameplate. The increasing age of the vehicle population is generally positive for aftermarket (non-OE) brands since they are less expensive than OE brands.
- How brands are distributed is being influenced by the changing age mix of vehicles. Aftermarket (non-Dealer) brands are primarily distributed by three channels: Traditional, Integrated, and the Import channel.
- The changing age mix of vehicles is influencing where consumers have them repaired, with Independent aftermarket outlets gaining a competitive advantage with their lower costs. Dealers are promoting their service bays to all makes and age categories of vehicles in order to adapt to the changing age mix of vehicles in the U.S.
Copyright 2019 by Lang Marketing Resources, Inc.
NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.