Rapid growth of the foreign nameplate aftermarket is driving import channel sales growth and expanding its light vehicle product share
Fort Wayne, Ind.—The independent import channel — import warehouses and import jobbers that distribute products for foreign nameplate cars and light trucks — has achieved the strongest annual product growth rate of all channels over the past five years, according to the new “2022 Lang Aftermarket Annual” report.
The study also states that the import channel will be a leader in driving the recovery of the aftermarket during 2021 and 2022. Here are a few takeaways from the analysis.
Import Channel
While import warehouses and jobbers focus on the distribution of foreign nameplate products, the import channel handles only a small portion of the total aftermarket products installed on foreign nameplate light vehicles across the U.S.
Modest Early Growth
While the import channel attained only modest annual product growth between 2001 and 2007, its performance started to increase in 2008. From $4.5 billion in 2008 product volume, the import channel climbed to $6.7 billion during 2014.
Booming Sales: 2014 to 2019
The import channel continued to increase in aftermarket product volume over five years previous to COVID-19, climbing from $6.7 billion in 2014 to $7.8 billion by 2017. The import channel added another $1.3 billion in product sales over the next two years, reaching $9.1 billion during 2019.
Increasing Product Share
The import channel product volume increased from 6.6 percent of 2014 light vehicle product sales to 7.1 percent during 2017. By 2019, the import channel had claimed 7.3 percent of total car and light truck product sales across the U.S.
High Product Growth Share
Import distribution generated nearly 12 percent of the $14.3 billion gain in car and light truck product volume between 2014 and 2019, more than 60 percent greater than its average product share during this period.
DIFM Strength
Do-It-For-Me (DIFM) repair accounts for a larger share of import channel product volume than it does in any other of the four major channels supplying the car and light truck aftermarket.
As a result, the import market accounts for an even higher growth rate of DIFM product sales. DIFM growth of the import channel will be boosted in the future by the large portion of its volume represented by two-step distributors, which sell directly to service outlets and bypass the jobber level of distribution.
Hot Channel in Hot Market
Distribution is changing within the import channel, with small three-step import warehouses and jobbers being replaced by direct-selling two-step import warehouses, many of them regional and national in scope.
With the rapid growth of the foreign nameplate aftermarket, the import channel’s focus on this market segment is driving import channel sales growth and expanding its light vehicle aftermarket product share.
In the five years prior to COVID-19 (2014 to 2019), light vehicle aftermarket product volume averaged 2.7 percent annual growth. The import channel, in contrast, increased its product sales at a 70 percent faster pace, with a 4.6 percent average annual gain between 2014 and 2019.
Increasing Product Share
Although the aftermarket suffered a significant decline in 2020 volume during COVID-19, the import channel, despite a drop in sales, managed to increase its share of the total car and light truck product market.
This continues a trend of expanding import channel share over the past 10 years, and Lang Marketing expects that the import channel will capture a growing share of aftermarket product sales during 2021 and 2022, as the aftermarket recovers from COVID-19.
Future Developments
With foreign nameplates expected to generate virtually all aftermarket product growth over the next five years, the import channel is well positioned to continue expanding its volume and share of light vehicle aftermarket product sales.
The growing two-step portion of import channel sales is propelling its annual growth rate and will continue to outpace the total aftermarket expansion of car and light truck products for the foreseeable future.
DIFM Sales Recovery
The import channel is playing a key role in the DIFM product recovery during 2021 as the DIFM light vehicle market rebuilds from its double-digit sales plunge during COVID in 2020.
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