Import warehouses and jobbers, however, don’t handle the majority of product volume — three other major distribution channels do
Fort Wayne, Ind.—The import distribution channel, consisting of import warehouses and import jobbers, achieved the highest annual growth rate over the past five years (2017 through 2022) among the five major channels supplying the car and light truck aftermarket.
The import channel’s record growth was generated largely by two factors: the rapid expansion of the foreign nameplate aftermarket, and the dominance of large import warehouses that sell directly to installers (especially foreign repair specialists) and other end-users, according to latest Lang Aftermarket iReport.
Yet, despite its concentration on the fast-growing light vehicle foreign nameplate aftermarket (imports and transplants), the import channel handles a minority of the total foreign nameplate product volume.
Most foreign nameplate car and light truck aftermarket product sales are recorded by three other major channels: traditional, integrated, and OE. Even so, domestic nameplate products generate a large portion of these distribution channels’ product volume.
The analysis goes into further detail with these key takeaways.
Highest Channel Percentage Growth
Import channel sales weathered the storm of COVID-19 and climbed by almost 20% over the past five years, adding over $1.5 billion of car and light truck product sales at user-price.
During 2020, COVID-19 hit the aftermarket and the import channel, and despite declining in volume, it suffered the smallest percentage sales reduction of the five major distribution channels.
The import channel expanded at a 3.6% average annual pace between 2017 and 2022, overcoming the 2020 impact of COVID-19, half-again greater than the combined yearly product growth of the other four major channels.
Import Channel’s Growth Drivers
Over the past five years, the import channel’s growth has been driven by two main factors: the rapid expansion of the foreign nameplate aftermarket in the U.S., and the dominance of large import warehouses, which have pushed aside many small import jobbers.
Import warehouses primarily engage in two-step distribution and sell directly to installers, especially foreign repair specialists, and other end-users. The success of import warehouses has been driven by their focus on foreign nameplate products, the vast array of brands they carry (including OE), their sophisticated internet ordering systems, and the timely delivery they provide.
Increasing Distribution Share
Over the past five years, the import channel has recorded 7.1% of 2017 light vehicle aftermarket product sales, and topped 8.3% of 2022 light vehicle aftermarket product volume at user-price.
Over that time period, the import channel generated nearly12% of total aftermarket product growth at user-price, about 50% greater than its average-annual share of aftermarket product sales.
Import Channel’s Five Unique Characteristics
The Import channel has five characteristics that differentiate it from the other major aftermarket distribution channels in the U.S.
• The import channel is the only light vehicle distribution channel focused on products for foreign nameplate vehicles (imports and transplants).
• Most import channel volume is two-step distribution, in which import warehouses sell directly to installers, primarily foreign repair specialists, and other end-users.
• A dominant share of the import channel’s sales consists of OE-supplier brands, foreign brands, and OE (original equipment) brands. Domestic brands and private labels represent a small portion of the import channel’s product sales.
• The import channel, especially two-step import warehouses, offers a wide variety of brands within product categories, which tops the brand assortment offered by distributors in other light vehicle channels.
• The ordering systems and delivery services of the import warehouses provide them with significant competitive advantages over other channels supplying the foreign nameplate aftermarket.
Lang Marketing projects that the Import channel will continue growing at an above-average pace over the next four years. The import channel will average more than 6.0% annual growth from 2023 through 2026 and expand its share of light vehicle aftermarket product sales at user-price.