Aftermarket Parts Proliferation ExplodesReturn for 2024 Session

The array and depth of parts needed to repair the growing diversity of cars and light trucks on U.S. roads are growing exponentially. This is driving a parts proliferation problem that is expanding across the light vehicle aftermarket. 

Four major factors are ramping up light vehicle aftermarket parts proliferation. Lang Marketing projects that parts proliferation in the car and light truck aftermarket will soar for the foreseeable future, increasing inventories and the logistical burdens on manufacturers, distributors, retailers and installers. This has important implications for vehicle repair and aftermarket product distribution in the U.S.

Soaring Parts Proliferation

The expanding array of products required to repair cars and light trucks in the U.S. is increasing parts proliferation at an unprecedented rate.

Parts proliferation forces manufacturers, distributors, retailers and installers to inventory, handle and manage a growing array and depth of light vehicle products to provide the timely auto repair that American consumers have come to expect. 

Four Factors Driving Parts Proliferation

Four factors drive parts proliferation in the U.S. aftermarket: foreign nameplate growth, increasing vehicle age, advancing vehicle technology and electric vehicles (EVs).

Factor 1: Foreign Nameplates

Foreign nameplates are rapidly increasing their number and share of light vehicles in operation. As the foreign nameplate population increases, its age mix is also changing. These factors add to the number and variety of products required for timely car and light truck repair.

The number of foreign nameplate cars and light trucks on U.S. roads will climb significantly between 2020 and 2025.

Foreign nameplates will account for approximately 53 percent of all cars and light trucks in operation by 2025, adding to the parts proliferation problem.

Factor 2: Vehicle Age

The average age of light vehicles continues to climb. Between 2020 and 2025, the average age will increase by over three-quarters of a year. The age mix of vehicles is also changing.

The number of cars and light trucks at least 12 years old will climb between 2020 and 2025. This changing vehicle age mix is boosting the average age of cars and light trucks and extending the vehicle age range for which parts must be carried in aftermarket inventories.

Anemic new vehicle annual sales and the growth of older vehicles are shifting mileage from newer to older cars and light trucks. This increases the need for older-vehicle parts to remain in inventories for an extended time. 

Factor 3: Vehicle Technology

Vehicle complexity is increasing, with advancing technology affecting virtually all vehicle operating systems.

Growing vehicle technology is adding significantly to the breadth of parts that manufacturers, distributors, retailers and installers must carry to enable the timely repair of light vehicles.

The number of smart parts (vehicle components with special sensors and software) will increase dramatically in aftermarket volume between 2020 and 2025.

During these five years, vehicles with advanced driver-assistance systems (ADAS) will climb at more than three times the annual pace of the overall VIO,

Advancing vehicle technology is fueling the growth of aftermarket parts proliferation and the cost of DIFM aftermarket products and services.

Factor 4: Electric Vehicles

While electric vehicles do not account for a significant share of the VIO at this time, aftermarket products for EVs must be available across a wide range of vehicle systems. As the EVs in operation increase in age, their need for aftermarket products will increase, adding significantly to parts proliferation.

The surge in new electric vehicle models hitting dealer showrooms in the next few years will dramatically increase the array and number of EV replacement parts that must be carried in aftermarket inventories.

Factors Grow More Intense

All four factors that are driving parts proliferation will intensify over the coming years, placing growing demands on the aftermarket supply chain at all levels.

Distribution Impact

Many participants in multi-tier distribution channels, particularly the traditional distribution channel, have long believed that more extensive inventories favored their distribution methods and capabilities. However, over the past 10 years, the integrated channel (distribution characterized by product ownership not changing hands from when products are purchased from manufacturers to their sale to end-users) has grown faster than multi-tiered distribution channels. Much of this growth has been fueled by the increasing share of aftermarket volume generated by eCommerce. 

Future Developments

Parts proliferation does not necessarily benefit one type of distribution channel over another.

However, the rapid increase in parts proliferation is inspiring a growing array of distribution innovations aimed at solving the ever-increasing challenges presented by parts proliferation.

 Six Major Takeaways:

•  A growing number and array of products are necessary to provide auto repair to consumers on a timely basis. Four forces drive aftermarket parts proliferation: foreign nameplates, vehicle age, vehicle technology and electric vehicles.

•  Foreign nameplates represent the majority of cars and light trucks on U.S. roads. Their growing VIO and increasing diversity of makes and models significantly add to aftermarket parts proliferation.

•  The vehicle age at which parts can be removed from aftermarket inventories continues to increase as vehicles climb in average age and the population of older vehicles grows on U.S. roads. Lower new vehicle sales and greater vehicle longevity are prompting the VIO age shift from more recent to older vehicles.

•  Vehicle complexity is increasing. Technology advances are adding to the breadth and depth of parts that manufacturers, distributors, retailers and installers must manage for auto repair to be conducted on a timely basis as consumers expect.

•  Electric vehicles, while they currently do not account for a large VIO share, are significantly adding to the array of products that must be available to the aftermarket to provide timely vehicle repair.

•  Parts proliferation does not necessarily favor one distribution channel over another. However, it is inspiring an array of distribution solutions aimed at managing the growing inventory and logistical challenges facing the aftermarket.

Want more? Check out the March 2024 issue of AASP-MN News!