CHICAGO, July 10, 2024 – U.S. automotive aftermarket retail sales revenue grew 2% in the first five months of 2024 with no change in unit demand. However, erratic weather patterns contributed to a strong January 2024, making it difficult to use year-to-date performance as an indicator of the year ahead. Industry performance is forecast to slow over the remainder of the year, resulting in generally flat sales compared to 2023, according to the latest Future of Auto report from Circana™, a leading advisor on the complexity of consumer behavior.
“Fundamental consumer behavior shifts took root at the macro level in 2020 and 2021 and they are still benefitting the retail automotive aftermarket,” said Nathan Shipley, automotive industry analyst for Circana. “While the aftermarket continues to be one of the strongest performing industries tracked by Circana, demand is softening a bit as macroeconomic factors impact consumers across the board. Food prices are one example, now more than 30% higher than they were in 2019. These kinds of dynamics are impacting spending and maintenance behavior among vehicle owners, particularly the lower income consumers that are more likely to drive older cars and conduct their own maintenance.”
Minimal growth in average selling prices (ASP) is projected for the automotive aftermarket this year, estimated at just 0.4%, driven by both deepening promotional activity and consumer trade-down at the shelf. Coupled with flat unit demand, the overall sales revenue of the industry will be impacted.
The largest source of volume growth in the year ahead is projected to be in chemicals, additives and fluids, which will generate a 2% increase in dollar gains, representing an additional $143M in revenue for the automotive industry in 2024. Discretionary categories, including products meant to accessorize or clean the vehicle, will be some of the worst performing this year.
“The direction of work-from-home trends and new car sales are the two largest factors for the auto aftermarket to watch over the next year,” Shipley said. “The potential for shifts in these trends, combined with softening prices across retail, will make it critical for aftermarket manufacturers and retailers to emphasize their value with consumers as competition for heats up for their still financially challenged budgets.”
