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Replacement parts sales grow at slower pace than overall light vehicle aftermarket

As the aftermarket is becoming more sensitive to economic changes and variations in consumer income and purchase activity, it is becoming less recession resistant, report finds

Fort Wayne, Ind.—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), according to Lang Marketing’s latest report. Replacement parts sales have grown at a slower annual pace than the overall light vehicle aftermarket since 2014.

The study refers to four major product group categories: replacement parts, accessories, chemicals, and tools and equipment.

“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,” states the report. Its findings are as follows:

Replacement Parts

  • Replacement parts are necessary for vehicle operation and subject to wear and tear. They generated approximately 66 percent of 2014 car and light truck aftermarket product volume at user-price.
  • Replacement parts in light vehicle sales diminished over the next few years. By 2017, they fell to 65.5 percent share and 64.0 percent of 2019 volume.
  • Despite their reduction in market share, replacement parts generated more than $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 percent of 2014 product volume to approximately 14.2 percent 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, which modify the appearance, performance, and/or handling of light vehicles and are considered discretionary, boosted their light vehicle aftermarket product share from less than 11.1 percent of the 2014 car and light truck product volume to nearly 12 percent 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 percent to 10.1 percent 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 percent, despite their market share decline.
  • Accessories represented nearly 17 percent 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 more than 13 percent, with chemicals accounting for nearly 13 percent 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 percent, followed by Tools & Equipment, which topped 3.6 percent in yearly growth.
  • Replacement parts climbed at a 2.4 percent average annual pace, while chemicals recorded 2.3 percent 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.

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