Exponential proliferation of parts will escalate inventory and logistical challenges for manufacturers, distributors, retailers and installers in next 5 years
Fort Wayne, Ind.—The breadth and depth of products required to maintain and repair the increasing diversity of cars and light trucks on U.S. roads are expanding exponentially, according to a new report. And the parts proliferation problem is “sweeping across all aftermarket sectors,” notably light vehicle.
Lang Marketing’s new analysis projects that aftermarket parts proliferation will increase over the next 5 years, escalating the inventory and logistical challenges for manufacturers, distributors, retailers and installers. Here are key takeaways from the study.
Four Factors Driving Parts Proliferation
Parts proliferation in the light vehicle aftermarket is driven by four factors: foreign nameplate growth, increasing vehicle age, advancing vehicle technology and economic pressures on consumers.
Factor 1: More Foreign Nameplates
Foreign nameplate cars and light trucks accounted for over half of all cars and light trucks in the U.S. during 2021, up more than one-quarter in share over 10 years.
This increase in the population of foreign nameplate cars and light trucks and their predominance in the repair-age sweet-spot (age groups of vehicles with the highest rates of aftermarket product use) have substantially increased their need for aftermarket products, adding to the parts proliferation problem.
Factor 2: Vehicle Age Change
Cars and light trucks are increasing in longevity and are retained longer by U.S. drivers. The average age of light vehicles climbed by 15% between 2011 and 2021, and their age mix is changing. Cars and light trucks at least 14 years old have increased between 2011 and 2021.
Accordingly, the older vehicle-age range of parts that must be inventoried has increased significantly in recent years and will continue to climb, according to Lang.
Factor 3: Vehicle Technology
Vehicles have become more complex, with advanced technology affecting virtually all car and light truck operating systems. The number of smart parts (vehicle components with special sensors and software) has increased by an estimated 500% in the aftermarket between 2011 and 2022. Over the next five years, vehicles with advanced driver assistance systems (ADAS) will increase at least eight-fold.
Vehicle technology is also adding significantly to the breadth of products that manufacturers, distributors, retailers and installers must handle to support the repair and maintenance of light vehicles.
Factor 4: Economic Pressures on Consumers
It is well known that many U.S. consumers are being affected inflation. And a recent study estimated that up to 60% of families live paycheck-to-paycheck. As a result, the demand for “good” automotive products (in a “good, better, best” hierarchy) is increasing.
Consumer price sensitivity to auto parts is also fueled by the increasing number of older vehicles on the road, increasing demand for products that are serviceable but not necessarily “better or best.”
This is boosting the need for manufacturers, distributors, retailers and installers to inventory and handle a growing quality array of products to meet changing consumer demands.
Four Factors Grow More Intense
The four major factors driving aftermarket parts proliferation will intensify in the future, increasing the challenges on supply chains at all aftermarket levels, Lang reports. Many participants in the multi-tiered traditional distribution channel have long believed that extensive inventories favor their distribution methods and capabilities.
Despite this, the integrated channel (distribution characterized by product ownership not changing hands from the time products are purchased from manufacturers to their sale to end-users) has outpaced the growth of multi-tiered distribution channels.
Distribution Adaptation
Parts proliferation does not necessarily favor one distribution channel over another, Lang states. However, the rapid growth of aftermarket parts proliferation is inspiring distributors to implement innovative techniques aimed at solving its challenges.
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