Posted by: Laura Hills, VP, Marketing, Dydacomp
New car unit sales rose 1.5 million in August of this year, which was the highest level in more than six years and a 17% increase over August 2012. Toyota, Ford, Nissan, Honda, Chrysler and General Motors all posted double digit gains over August 2012 and are running leaner, more cost efficient organizations contributing to greater profitability. Chrysler and GM each forecast that total U.S. sales in August ran at an annual rate above 16 million, a pace not seen since November of 2007, a month before the start of the Great Recession.
The recovery in the auto industry is not confined to a single market segment. It is broad based and includes luxury and small car buyers, along with work truck buyers which signal increased confidence among all consumers. A combination of factors has been cited as the impetus behind this growth including:
- Need to replace older vehicles (average age of cars and trucks is 11.4 years)
- Low interest rates
- High trade-in values
- More people are working
- Sweet lease deals
- New vehicle designs
- Fuel efficient options
- Uptick in construction raising demand for pickup trucks
Aftermarket auto parts and accessories are also experiencing significant growth, with online sales well outpacing brick and mortar sales. Hedges & Company, a digital agency specializing in the automotive aftermarket is forecasting online sales be nearly $4.4 billion in 2013, up from a revised $3.8 billion in 2012 to grow by 15.5% from 2012.
Several auto industry trends will greatly impact the aftermarket and aftermarket retailers need to take notice. These include:
- Big engines in both cars and trucks remain hot. This has always been a sweet spot for the aftermarket companies that sell parts for these large engines, including parts to improve gas mileage and should continue.
- Two new pony cars are expected in 2014 – a new Mustang and a new Camaro, which are always popular in-demand cars. Aftermarket parts and accessory dealers need to be ready to react quickly with new products for these vehicles.
- New light truck and SUV registrations have shown a 10.6% increase over last year. This definitely is good news for aftermarket parts and accessory retailers in the truck market.
Amazon sells more auto parts and accessories than any other online retailer but many retailers who started selling through eBayMotors and Amazon are now looking to drive more customers through their own websites.
Just as the automakers have retrenched and improved their operations to weather the economic storm, aftermarket retailers need to refocus their efforts to better respond to shopper demand. Customer satisfaction basics now drive the auto industry and aftermarket retailers need to be able be equally as responsive in connecting with their target audiences. With more online business, you need to be sure that your eCommerce operation is ready to handle all of your customers’ needs. Provide better product descriptions, be sure your online order process is easy to use, add how-to videos, live customer support and become the go-to place for aftermarket parts and accessories.
For additional information and help with growing your auto parts and accessories business, plan to attend that 2013 SEMA from November 5–November 8 at the Las Vegas Convention Center. The SEMA Show is the premier automotive specialty products trade event drawing the industry’s brightest minds and hottest products. SEMA offers its members a variety of business tools and resources to help you make smarter business decisions and be more strategic and targeted with your promotions. For information on the 2013 SEMA Show click here.
For Dydacomp’s special white paper, The Keys to Drive the Business, Best Practices for Aftermarket Auto Parts Retailers, click here.
For the Associated Press article on U.S. auto sales for 2013 by Tom Krisher and Dee-Ann Durbin, click here. (http://www.theledger.com/article/20130904/NEWS/130909697/1178?Title=Double-Digits-Automakers-Report-Big-Gains-for-August).