Is a Major Boom Coming for the Aftermarket?
June 23, 2021—Several trends that developed during the COVID-19 pandemic signal a potential boom for the automotive aftermarket.
A new study by the Martec Group, a market insights and research firm, looked into what insights could be gained from the pandemic, and what, if any, impact it will have on the short- and long-term futures of the industry.
What the study found was there are a plethora of changes that the pandemic caused that will have an influence, including consumers’ delay in getting work done, the migration patterns of the general population, a return to in-person work, and a potential decline in DIY repairs.
Ratchet+Wrench spoke with Chuck Bean, partner at chief marketing officer for Martec Group, to get the details on the biggest factors leading to the expected boom and what that means for shop owners.
The most important thing that Bean gleaned from the report was how the shifting population could affect the industry. This is a trend Bean expects to play out over the next five years, although the impacts could still be felt soon.
The study, which surveyed 1,000 vehicle owners in the U.S., found that of the respondents who moved, one third of them moved further away from work, Bean said. That follows a larger societal trend that developed from the pandemic, which saw consumers increasingly moving out of the city and into the suburbs in order to have more space for lockdown life.
A Brookings Institution analysis of census data found “most big cities with populations exceeding 250,000 showed lower population growth in the year the pandemic began than in the previous year, and nearly one-third of them registered their lowest annual growth in the decade.”
With that means longer commutes into the city for work and also longer drives to basic necessities like grocery stores and gas stations. It also likely means less public transportation is being used, Bean said, all factors that benefit repair shops.
“The biggest post-pandemic shift is the population shift,” Bean said. “The housing market is going crazy and repair shops are to benefit. Vehicle miles traveled is going up and is going to stay up.”
Unlike population migration, delayed work is expected to have an immediate and noticeable impact on the industry and lead the way for the aftermarket boom, Bean said.
The study uncovered that 52 percent of people delayed work on their cars during the pandemic. Whether that was because they weren’t driving, feared getting COVID, or were struggling financially, the numbers across the industry were down, Bean said. Many individual shops continued to succeed, but the larger industry struggled.
As restrictions ease and the economy reopens, the study found consumers should begin to return to repair shops to get the fixes that they pushed off over the last 18 months. That bodes well for repair shops, who will see more business and will likely see the work each car needs increase as well, Bean said.
With that comes the opportunity for shops to reach new customer bases who may have seen their repair shop close or don’t have as strong a connection to their previous shop as they did before the pandemic. However, that also means shops should be diligent about keeping the customers they have and trying to retain much of the base they had pre-pandemic, Bean said.