Despite lower levels of on-site work and in-school instruction, the industry has seen some sectors of the aftermarket recover well
Bethesda, Md.—With the nation in the swing of fall, it appears that some of the things the industry wondered about in the summer are being resolved, at least for now. Working on-site (offices, manufacturing and warehouses, retail), however, is still at about half of pre-pandemic levels, according the latest “Market Insights With Mike” report from the Auto Care Association.
As the school year has started, “back to school” has been largely virtual: of the more than 13,000 school districts across the country, 62 percent are in session virtually, 19 percent meet in-person, 18 percent use a hybrid approach, and 1 percent remains undecided, as of Sept. 2, states Burbio, a digital platform for community events.
Despite the lower levels of on-site work and in-school instruction, the industry has seen some sectors of the aftermarket recover well, according to Market Insights. Retail sales of automotive parts, accessories, and tires soared in the summer, reflecting considerable pent-up demand as consumers began driving again and prepared their vehicles for summer travel.
The auto care industry bodes positively, as employment and industry sentiment have risen considerably since bottoming out in April. Will these positive trends continue? Market Insights reports there are some indicators that suggest continuation of those trends.
Consumer sentiment and behavior
According to IMR Inc., while vehicle maintainers remain highly concerned about traveling via ride share (68.1 percent) or via public transportation (62.4 percent) in the context of Covid-19, they are less concerned about taking their vehicles to a repair shop for service (32.1 percent) or shopping- in-store at an auto parts retailer (34.4 percent).
Perhaps as a result, in addition to spare time and the need for a “project,” Do-It-Yourself (DIY) activity has increased to its highest levels over the summer – 38.2 percent in July and 43.3 percent in August — accelerating from 28.9 percent in 3Q 2019, according to weekly surveys of U.S. consumers who are responsible for maintaining their vehicles, conducted by IMR Inc.
Positive trends for the aftermarket
In September, IHS Markit adjusted its 2020 light vehicle sales forecast to be 408,000 units higher than previously modeled in August, as pictured below in this graph from IHS.
While sales of new vehicles for 2020 (and beyond) continue to be significantly less than previous years, this bodes well for the aftermarket, states Market Insights. The average vehicle age rose to 11.9 years this year, and is likely to continue rising, particularly as owners hold onto their vehicles longer.
Other uncertainties continue to loom, however, including the upcoming presidential election, Covid-19 cases, travel restrictions, and office and school policies.