As independent service market captures increasing share of domestic nameplate repair, OE brand use in domestic nameplate repair will decline and non-OE brand share will rise
Fort Wayne, Ind.—There is a widening gap in the average ages of domestic and foreign nameplates on U.S. roads. The increasing domestic vehicle average age and the surging population of domestic nameplates over 15 years old are changing the types of brands used in the repair and maintenance of domestic nameplates, according to the “2021 Lang Aftermarket Annual” from Lang Marketing.
The following are highlights from the report, which was released on Wednesday:
Changing new vehicle sales mix
Foreign nameplates have averaged 55 pecent of new vehicle sales in the U.S. over the past 10 years, up nearly two-thirds from their 34 percent share of the new vehicle market at the turn of the new millennium. This has dramatically boosted the average age of domestic nameplates.
Nameplate age gap
Domestic nameplate light vehicles averaged 2.6 years higher in age than foreign light vehicles at the beginning of 2020. There were significant differences in the age gap of cars and light trucks, with domestic nameplate cars 3.8 years higher in age than foreign nameplate cars and a much narrower age gap between light truck nameplates.
With Covid-19 lowering the annual vehicle scrappage rates during 2020 and 2021, the age of domestic nameplates will climb faster than the age of foreign nameplates, which will increase the average age between these two vehicle groups.
Falling dealer repair of domestic vehicles
Dealers are performing a decreasing share of work on the aging domestic nameplate population. This trend will continue, reflecting the growing age of domestic vehicles as well as the declining outlet share of domestic nameplate dealers. This will shift more domestic nameplate vehicle repair to independent service outlets.
Declining OE product use on domestic nameplates
As the independent service market captures an increasing share of domestic nameplate repair, OE brand use in domestic nameplate repair will decline and non-OE brand share will rise.
‘Value’ brand use increases in domestic repair
Owners of aging domestic cars and light trucks are becoming more price sensitive about vehicle services and products.
In both the Do-It-Yourself (DIY) and Do-It-For-Me (DIFM) markets, value brands, which provide acceptable levels of quality and performance at lower prices, will expand their domestic nameplate aftermarket product share.
Foreign dealers and foreign specialists
Vehicle dealers will retain a large share of foreign nameplate repair. At the same time, foreign specialists will continue to expand their foreign nameplate service market (DIFM) position.
Both of these types of outlets prefer OE brands, OE-supplier brands, as well as an array of foreign brands of aftermarket products.
As a result, value brands will not significantly increase their foreign nameplate aftermarket product share over the next three to five years.