08/05/2024

U.S. Automotive Aftermarket Industry Grows 8.6% in 2023

Source: aftermarketNews

Total U.S. automotive aftermarket sales grew to $391 billion in 2023, according to the 2024 Joint Forecast Model, a report from The Auto Care Association, MEMA Aftermarket Suppliers and S&P Global. The sales increase of 8.6% was fueled by growth among dealers’ service centers, auto parts stores and general auto repair sectors.

The forecast model identifies several key market trends influencing the aftermarket, including:

• Labor Market Dynamics: Rising wages and a strong labor market are driving consumer spending, despite inflationary pressures.
• Inflation Outlook: Much of the growth is attributed to the industry’s ability to charge more for service and for parts to keep up with inflation which is expected to gradually recede, with rates returning to the Fed’s target range by late 2025.
• Consumer Sentiment: While consumer sentiment remains low, spending levels have remained resilient. However, continued pessimism may pose risks to future spending patterns.
• Vehicle Sales and Fleet Growth: Despite fluctuations, new vehicle sales are projected to stabilize, contributing to the growth of the U.S. vehicle fleet.
• E-commerce Growth: E-commerce purchases of DIY parts continue to rise, reflecting shifting consumer preferences and increasing convenience.

The Joint Forecast Model predicts continued growth for the U.S. automotive aftermarket, with sales expected to increase by 5.9% in 2024. Looking ahead, average growth rates of 4.5% are forecasted for the period from 2025 to 2027, as inflationary effects subside and the aftermarket grows to $472 billion.

“MEMA Aftermarket Suppliers and the Auto Care Association are committed to providing industry stakeholders with valuable insights and forecasts to navigate a dynamic, shifting—and growing—automotive aftermarket,” said Paul McCarthy, president and CEO, MEMA Aftermarket Suppliers. “Our Joint Channel Forecast’s projections for long-term growth, driven by structural market tailwinds and the strength of the independent aftermarket, underscore the enduring value of repair market competition and consumer choice. Despite inflationary pressures, vehicle owners are investing more in their cars, with an aging vehicle fleet and significant growth in both service and retail sectors supporting our industry’s trajectory. The report’s analysis on how these factors are shaping our market provide essential clarity for our members as they strategize for the future.”

“The data reveals promising growth prospects for our industry, showcasing resilience in the face of challenges,” said Bill Hanvey, president and CEO, Auto Care Association. “As we navigate the evolving market dynamics, industry stakeholders can expect a wealth of opportunities to emerge, driven by consumer demand, the aging vehicle population and technological advancements. This forecast equips stakeholders with actionable insights to seize these opportunities and drive continued success in the automotive aftermarket.”