By David Portalatin, Executive Director, Automotive Aftermarket Industry Analyst, NPD Group.
An interesting phenomenon is happening on the roads today. At the same time that consumers are driving more, they are also spending less at the pump. In spite of the 4 percent increase in gasoline usage, consumer spending at the pump is down $39 billion so far this year. This situation leads to some long overdue market opportunities for the automotive aftermarket:
• As consumers put more miles on the odometer, this naturally leads to more frequent maintenance intervals and, in turn, an increase in demand for all the things that a vehicle consumes or requires as part of its ordinary usage, including oil changes and minor replacement parts. Motor oil tells a good story, with the total category up 7 percent in dollars and 4 percent in units (quarts); a different storyline than what we’ve grown used to in recent years. Previously, motor oil was growing in dollars while unit volumes were in decline as consumers shifted towards more premium-priced products. The speed at which these products are moving off the shelves indicates just how high the demand is for this automotive product.
• What are consumers going to do with the extra $39 billion they’ve now found in their wallets? Growth is starting to happen in many categories within the automotive products space that have struggled since the recession, when consumers looked at automotive spending more prudently. While they would prioritize the necessary things to keep their cars functioning efficiently and effectively, the added bonuses — having the cleanest, shiniest and most accessorized car — were put on the back burner. Now, as consumers find some relief in their wallets, dollar and unit sales across such “bonus” categories are growing, including air fresheners (+18 percent in dollars and units), appearance accessories (+16 percent dollars, +15 percent units) and appearance chemicals (+16 percent dollars, +13 percent units).
Consumers have lots of reasons to smile today. Spring is in the air, fuel tanks are full, more money is in their pockets and they are driving cleaner, shinier and better-smelling cars. While this is benefiting consumers, it’s also giving the automotive aftermarket a reason to smile.