For dealers that want to keep tabs on how their competitors in the aftermarket are faring during the pandemic, the latest figures from DesRosiers Automotive Consultants (DAC) reveals a surprising increase in retail sales from automotive parts, accessories, and tire stores.
The impact of the pandemic was evident in certain areas of the automotive industry in 2020: new light vehicle sales experienced record-setting declines — finishing the year with a decrease in sales of 19.7%. And production from the assembly sector dropped sharply as well — by 26.9% for the year, thanks to the supply chain shutting down. But DAC says the picture for the automotive aftermarket in Canada “was nowhere near as dire.”
“Many assumptions made by generalist consulting companies and economists with limited understanding of the aftermarket proved to be overly negative,” said Andrew King, Managing Partner of DAC. “The aftermarket has long been the backbone of the Canadian auto industry and continued to hold strong throughout the pandemic, at least compared to other industry sub-sectors.”
Retail sales from automotive parts, accessories, and tire stores rose 2.7% in 2020 compared to 2019, while other categories such as Canadian gasoline consumption, core aftermarket employment, and AARO/DAC installer sales analysis were all down.
“While sales at these outlets did indeed fall in the spring during the first wave of the pandemic, the drop in March, April, and May was relatively subdued and retail sales figures bounced back quickly,” said DAC. “The fall was particularly strong, leading to overall retail sales at automotive parts, accessories, and tire stores to increase to $10.62 billion in 2020.”
For Canadian gasoline consumption, which declined 14.3% in 2020 compared to 2019, DAC said gasoline consumption dropped 43.1% for the month of April at the height of the first wave of the pandemic, when Canadians were not using their vehicles as much and kilometres driven had been significantly reduced.
Core aftermarket employment, which includes motor vehicle parts and accessories wholesale, automotive parts and accessories stores, and automotive repair and maintenance, was down an average 10.4% in 2020 compared to the previous year. But the sharp decline in the spring helped boost that number to a decline of only 7% from 2019, as of December 2020.
And as for aftermarket installers, DAC said it conducted a survey in late January with its colleagues at the Automotive Aftermarket Retailers of Ontario (AARO) to better understand the impact of the crisis on independent installers. Performance in 2020 was mixed, with the largest group of respondents (28.8%) indicating sales increases of 0-10%, and the second largest group (26.3%) indicating small decreases of less than 10%.
“In summary, the picture that emerges of the aftermarket in 2020 is mixed but shows real strength relative to the rest of the automotive sector,” said DAC. “The automotive aftermarket was not affected as deeply as the new vehicle market or the manufacturing side of the industry.”
DAC said the mixed performance and relatively strong retail sales figures points to “a measure of deep-rooted stability” in 2020.
