Drop in new vehicle sales drive dealers’ attention to the older all-makes vehicle mix; aftermarket parts providers could increase sales to dealer bays
Fort Wayne, Ind.—Since 2020’s COVID-19, new light vehicle annual sales in the U.S. have floundered compared to their record-high sales from 2015 to 2019. As a result, the number of vehicles under six years old on U.S. roads have declined significantly during 2020 to 2024, states the latest Lang Aftermarket iReport.
“In response to fewer young vehicles, many dealers are shifting their service bay focus to an older and all-makes vehicle mix and promoting used vehicle sales (which provide additional service bay business). This will have important consequences for the growth of dealers’ repair volume and bring new challenges to independent (non-dealer) repair shops,” reports the analysis.
The following a key report takeaways.
Fewer Vehicles Under 6 Years Old
From 2015 to 2019, car and light truck annual sales averaged more than 17.3 million, a record-high level from which the 2020 new vehicle market dropped by nearly three million.
Lang Marketing estimates that from 2020 to 2024, there will be a decline of nearly 15 million cars and light trucks under six years old on U.S. roads compared to the previous five years. This is more than a 14% decrease.
Dealer Bays First to Feel Lower New Volume
Dealers are the first to feel the service bay effect of lower new vehicle sales since they have traditionally focused on repairing cars and light trucks under six years old.
To compensate for fewer young vehicles, dealers are promoting their service bays to an expanding mix of vehicle nameplates and age categories. They are also building their used vehicle volume and benefiting from the vehicle refurbishment and maintenance business it provides their bays.
Dealer Bays Focus on a Broader Vehicle Mix
Many dealers are making their bays more convenient by expanding operating hours and adding Quick Service Lanes to make them more attractive to a wider mix of vehicles (beyond the nameplates they sell new and older vehicles).
This has made dealers more competitive with independent repair shops, who have long focused on an older and broad-nameplate mix of vehicles.
Dealer Sharpen Their Bay Pricing
Dealers are now appealing to a broader mix of nameplates and a wider range of vehicle age groups and making their repair prices more competitive with independent outlets, especially for older vehicles whose owners are often price sensitive.
Tire Sales and Oil Changes
Many dealers are aggressively promoting tire sales and oil changes to expand their bay reach to a broader mix of nameplates and vehicle age categories. Dealers’ addition of Quick Service Lanes has been effective in reaching these customer groups.
Dealers’ promotion of oil changes and tire sales increases the likelihood that vehicle owners will return for other types of repairs prompted by the repair relationship that dealers have cultivated with them.
Strong Used Vehicle Market
The strong used vehicle market in the U.S. is encouraging many dealers to promote the sales of used vehicles as a way to develop their service bay business. The used vehicle market offers dealers several benefits: used vehicle sales (with high profit margins) to replace the lower new-market volume, mechanically refurbishing used vehicles to make them resale-ready, and future repairs on the used vehicles they sell.
The growing dealer-bay volume across a broader mix of nameplates and older vehicles (whose owners are often price-sensitive) is expanding the use of non-OE parts in dealer service bays. This provides independent (non-OE) parts manufacturers and distributors the opportunity to increase aftermarket-brand parts sales to dealer bays.
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