NPD: Sell Oil for Aging Cars

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Consumers are keeping aging vehicles on the road longer, which is creating a booming market for high mileage and synthetic motor oils, according to the NPD Groups Automotive Retail Tracking Service.

With the vast majority of cars on the road now over 10 years old, there continues to be a robust opportunity to engage the consumer whos driving an older car, Dave Portalatin told the March Petroleum Packaging Council spring meeting held in Tampa.

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According to NPDs surveys, which track consumers spending patterns and attitudes toward the market for the coming years, consumers have cut back on purely discretionary spending, such as electronics and entertainment, but have increased spending on most necessities – such as motor oil – in the past years. Most consumers say they are willing to pay more if it means they can keep their car on the road longer.

NPD tracked sales of automotive aftermarket retail products at 24,000 retail locations in the United States, from small specialty auto parts stores to massive chains such as Wal-Mart and Target. NPD found that, for the 13 weeks ending April 5, 2014, motor oil sales were down 0.5 percent, and quart volume was down 4.2 percent versus the same period a year ago, Portalatin told Lube Report.

We asked people if they plan on buying a new or new-to-me car in the coming year, and 61 percent said they will be driving the same car in 2014 that they drove in 2013, Portalatin told the conference. In 2013, the average age of that car was 11.4 years. That older-car trend remains the single greatest factor influencing the automotive products marketplace today. And thats going to be a fairly long-lasting trend in the marketplace, so [marketers] have got to recalibrate [their] thinking.

According to NPDs research, more than half of those owning a car that is older than 10 years – which represents the majority of the car ownership market – are willing to do at least some do-it-yourself upkeep on their cars, and are expecting to spend $751 on their vehicles per year. In contrast, 78 percent of consumers that own cars that are less than 4 years old say they will only consider do-it-for-me maintenance.

Theres growth in the zero-to-three year old car market, and theres growth in the 10-year old and more market, but not a lot in between, Portalatin continued. People used to consider the four-to-seven year old range of cars to be the sweet spot, because thats around the time warranties expire and people start doing more DIY maintenance and buying more products. But thats no longer true – the sweet spot is now those cars that are more than eight years old.

And to sell motor oil to that market, you need to focus on factors that are geared toward aging vehicles, he continued. Consumers will always place a high value on price. But some of the other factors that consumers say they place the highest value on when it comes to aftermarket automotive products (such as motor oil) include the products likelihood for increased gas mileage, high-quality materials, increased engine performance, recyclability and cleanliness, and ease of installation and use.

If there are things you can do in the packaging world that make it easier or cleaner to handle and dispose of [the product or its packaging], then you have a valuable proposition.

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