STX 2024: Cushing Delivers Aftermarket Economic Outlook

May 22, 2024
Bob Cushing, Advance’s EVP, professional and president of Worldpac, delivered the opening keynote at STX '24 with a state of the industry address.

In his opening keynote, on April 24, Bob Cushing, Advance’s EVP, professional and president of Worldpac provided an optimistic outlook on the overall economy and its relationship to the automotive aftermarket. 

In his speech, Cushing highlighted robust economic growth, historically low unemployment rates, and stabilized inflation as the catalyst to the now-strong labor market. However, Cushing pointed out that the automotive industry continues to struggle with a persistent shortage of technicians, a longstanding challenge.

Despite these workforce issues, Cushing emphasized several positive developments for the automotive industry. He noted that the stability within ocean freight costs and improvements in chip production are poised to support increased new car manufacturing. He also said high interest rates could pose a significant hurdle for new vehicle sales (citing the average new car price at over $47,000). According to forecasts he shared, any future reductions in interest rates could lead to a significant boost in new car sales volumes. He said while stabilization of economic factors like inflation and the supply chain creates a positive outlook for the industry, addressing the technician shortage and monitoring interest rates remain crucial.

Cushing then presented data aimed at highlighting the aftermarket. He said that independent auto repair shops hold a commanding 71% market share, surpassing dealerships, and are poised for even greater growth over the next two years. According to Cushing, trust and good prior experiences are what customers reportedly wanted when selecting a repair shop, and independents consistently outperform dealerships in these areas. He also highlighted a shift in the business towards "do it for me" services, as vehicles become more computerized and too complex for do-it-yourselfers. The data presented indicates strong opportunities for continued growth and success in the auto care industry. He also pointed to continuing opportunities on the horizon for shops as mileage has increased to 3.3 trillion miles driven annually, 15.5 million new registrations each year, and an average vehicle age of 12.5 years.

Cushing concluded by discussing the growth and impact of electric vehicles (EVs). He noted that while EV sales are increasing, they still represent a small fraction of total vehicles on the road, with projections showing they’ll make up only 5% of all vehicles on the road by 2030 (out of 300 million vehicles). Cushing stated he believed Toyota had it right with its position on being less aggressive in EV production. Data in Cushing’s presentation showed barriers to further EV adoption include high costs, limited availability of raw materials for batteries, and a lack of recycling infrastructure. Despite these challenges, Cushing emphasized the strong support from manufacturers and governments for EVs. He believes the industry needs to prepare by training technicians on high voltage systems and electrification. He also pointed out that advanced driver assistance systems have the biggest industry impact today with most vehicles being fully ADAS equipped.

About the Author

Ratchet+Wrench Staff Reporters

The Ratchet+Wrench staff reporters have a combined two-plus decades of journalism and mechanical repair experience.

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