The global automotive aftermarket industry is expected to reach $722.8 billion by 2020. Today’s consumers are keeping their vehicles longer and are more aware of the importance of preventive maintenance and scheduled servicing to maximize the lifetime value of their vehicles. This rising demand for aftermarket parts and services is spurring new growth and revenue opportunities for a wide range of businesses operating in the automotive aftermarket industry.
The typical car on the road in the U.S. is a record-high 11.5 years old, according to a new IHS Automotive survey. However, while cars on the road may be aging, consumers are continuing to purchase new vehicles. In 2015, U.S. car sales hit a record high. Auto makers sold 17.5 million cars and light trucks, a 5.7% over the previous year.
Although Americans may be buying newer vehicles, don’t let these numbers fool you into thinking the aftermarket is stagnant or declining. Older vehicles are simply lasting longer. According to a 2015 article by USA Today, “The number of vehicles on the road that are at least 25 years old is about 14 million. That’s up from about 8 million in 2002. Those are vehicles made in 1990 or earlier. Meanwhile, the number of vehicles that are 16 to 24 years old is 44 million. That’s up from 26 million in 2002, according to IHS.”
Trends and Statistics:
- The average age of the U.S. vehicle fleet has increased 17% in the last ten years.
- The average length of vehicle ownership for new and used vehicles has increased 60% in the last ten years.
- 75% of aftermarket auto repair is performed by independent auto repair shops, while 25% of the business lives with dealerships.
- There’s a trend toward large franchise auto repair businesses, which have smaller shops rolling up into them. That’s a good opportunity for profitable businesses on the service/seller-side.
- The aftermarket world is going online, and the marketplace is changing. Parts are being sold online, service is being sold online.