May 16, 2017―While dealerships have steadily gained back a market share of automotive repair work from independent shops over the past five years, “virtually all” of that product growth has been generated by foreign nameplates in the light vehicle service market, according to Lang Marketing.
“Dealers rang up $8.5 billion in domestic nameplate DIFM (Do-It-For-Me) product volume during 2016, up modestly from $8.3 billion four years earlier at user-price,” Jim Lang, president of Lang Marketing, wrote in his May report, "Dealer DIFM Share By Nameplate." “In contrast, dealer DIFM product volume among foreign nameplate cars and light trucks surged nearly $2 billion between 2012 and 2016.”
Just a few months ago, speaking to Ratchet+Wrench about a report entitled “Independent DIFM Share Peak,” Jim Lang identified that the independent DIFM aftermarket is “beginning to decline in car and light truck repair market share, as dealer bays stage a steady recovery." The report stated that independent repair outlets peaked at 78.9 percent in light vehicle product volume during 2013 and 2014, but that it declined in 2015—the first drop in product share since 2007. Over the next four years, the report said more than $1.1 billion in product sales will shift from independents to dealer bays, reversing the flow that kept up from 2008 through 2014.
However, a significant portion of that shift occured in foreign nameplate DIFM product sales, which increased at a much faster average annual pace (6.2 percent) than domestic nameplates (0.2 percent) between 2012 and 2016. As a result, virtually all Dealer DIFM product volume growth between 2012 and 2016 was generated by foreign nameplates.
This, in large part, is due to two main facts, Lang said:
- Foreign nameplate sales by dealers increased at a much faster pace than domestic nameplate products (6.7 percent compared to 0.8 percent).
- Customers who purchase foreign vehicles are more likely to return to the dealer for service.
“That’s mostly because of the technology of the repair required, the special tools required,” Lang said.
During 2016, dealers accounted for 23.3 percent of foreign nameplate DIFM product volume, noticeably higer than their 19.6 percent share of DIFM products for domestic nameplates.
“Foreign nameplate DIFM product sales by dealers increased at a much faster pace than dealer growth of domestic nameplate car and light truck DIFM products: 6.7 percent compared to 0.8 percent,” the report stated. “Foreign nameplates generated 88 percent of dealer DIFM light vehicle product growth from 2012 to 2016.”
A complete analysis of dealer DIFM service bay share will be presented in the upcoming 2018 Lang Aftermarket Annual, scheduled for release the first week of June.