Less Driving Slows U.S. Aftermarket


U.S. sales of automotive aftermarket supplies – including motor oils – were up just slightly in the first six months of this year, compared to the same period of 2016, NPD Group reported, hindered by a slowdown in growth of miles driven by consumers.

Average selling prices for aftermarket supplies increased nearly 3 percent, but sales revenue grew just shy of 1 percent in the first six months of the year due to a 2 percent decline in unit and quart volumes, according to NPD Group. Motor oil sales were up 0.5 percent in the first of 2017 versus last year, Nathan Shipley, director and automotive industry analyst for NPD Group, told Lube Report.

Retail price increases, driven by a mix of inflation and product mix changes, are influencing the aftermarket trend so far this year, Shipley said in a news release.

According to NPD, the automotive aftermarket performance correlated with the slowdown in the growth rate of miles driven by consumers in the United States, as estimated and projected by the U.S. Department of Transportation. In the 12 months through May 2017, miles driven grew by 1.8 percent, equating to an annual increase of almost 55 billion miles. Shipley noted this is the lowest rate in more than two years. By comparison, for the 12 months ending in March 2016, the miles driven grew about 2.7 percent, for a rate of 82 billion miles.

Higher gasoline prices in the first 29 weeks of 2017 factors into this slowness, he said in a news release. To put it in perspective, a price increase of just one cent per gallon leads to a spending increase of $4 million per day in the U.S. What seems like a little goes a long way, and impacts consumers inclination to spend within the aftermarket and at retail in general.

Industry performance was off to a rocky start during the opening months of the year, NPD found, but began to improve in March, with May and June the best months of the year thus far.

In addition to the miles driven story, there are a number of other factors influencing the aftermarket today with long term results, Shipley said. Aftermarket consumers are slowly migrating towards making non-distressed automotive product purchases online; extended oil change intervals are impacting the number of times a [do-it-yourself] consumer walks into an auto parts store; and Millennials are becoming the new core consumer target. These are the ones that should be top of mind. Distressed automotive product purchases refers to items necessary for a vehicle to operate, such as car batteries, starters and alternators, he said, while non-distressed would include items such as car wash products and brake pads.

He noted that the oil change remains the most frequent occasion for maintenance. If everything else is constant, he said, the oil change interval getting wider means that do-it-yourself customers will be in auto parts stores fewer times in a given year. Shipley added that the aftermarket in general needs to be very focused on the Millennials consumer target segment, which refers to the generation born in the 1980s or 1990s.

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