Are repairs less expensive than replacing a vehicle? In the long run, makers hope they are.
Auto parts retailers are gaining from consumers attempting to keep their aging vehicles on the road as the Great Recession drags on. Auto parts retailers experienced a seven percent growth in dollar sales for year-to-date April 2010 when compared with a year ago. Much of the volume growth came through the commercial channel, as repair shop bays filled up with aging vehicles.
Automakers are hoping for resurgence in new vehicle sales from aging vehicles, although a new study indicates this may be a false assumption.
These findings are from the NPD Group, whose Aftermarket Industry Monitor tracks item-level sales at more than 18,000 U.S. auto parts store.
NPD says that the sales growth is driven by applications parts, which increased ten percent in dollar volume for the January through April 2010 time period versus a year-ago. The dollar gains came from real unit volume growth reflecting an actual increase in consumer transactions for replacement parts.
“I believe what we’re seeing is that consumers have begun to recognize that repair costs are more economical than replacement costs,” says David Portalatin, industry analyst for NPD’s automotive aftermarket business.
“Consumers have been telling us for two years they were aware their autos needed service but they were putting it off. They are now realizing they can no longer put off the services and are making the needed repairs,” Portalatin says.
The top five hard parts categories, based on unit volume percent change for year ending April 2010, are suspension, application electrical, climate control, brakes, and driveline.
“The increase in application parts sales is a case where consumers’ intentions, what they say, did portend exactly to what they would do in the future,” says Portalatin. “By paying attention to what consumers said in 2009, marketers could anticipate what consumers would do in 2010.”