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Automotive Aftermarket: Parts 2019Automotive Aftermarket & Auto Parts OverviewAccording to The NPD Group, total 2018 sales for the automotive aftermarket, which includes parts, tires, batteries and many other product subsections, increased 2.5%, following a 2.2% increase for 2017. Based on data from GAMCO Investors, Inc., 2018 total sales were approximately $296 billion, with approximately $171 billion for auto parts, $32.1 billion for tires and $92 billion for labor. Total aftermarket sales are forecast to reach $433 billion by 2021.A major factor driving the market is the number of light vehicles 6 to 11 years old, which will total 71 million during 2019, but increasing to 86 million by 2022. The record 3.2 trillion miles driven in the US as of August 2018 also contribute to the market.Replacement Rates of Different Categories of Auto Parts, 2015 vs. 2030Category20152030Category20152030Advanced driver-assistance systems$0 $0Maintenance and repair$4 B$5 BElectrification$0 $3 BBrakes$11 B$12 BEngine/Transmission$11 B$16 BChassis$6 B $7 BExhaust/Emissions$4 B$5 B HVAC$9 B$9 BElectrical and electronics$16 B$20 BOther$11 B$11 BFilters$5 B$6 BGAMCO Investors, Inc., November 2018Challenges and OpportunitiesAs stated in Media Group Online’s 2019 Automotive Update Reports, light-vehicle sales have declined, which put fewer vehicles on the road; however, auto dealers are turning to service and parts and used vehicles to increase sales.The transition will be disruptive, but many dealers will respond to the electric and autonomous vehicles markets by operating multiple service lines for these drivetrains as well as vehicles still with internal-combustion engines, which should boost parts sales.As with all retail sectors, various technologies will significantly affect the automotive aftermarket, such as more software-based parts, requiring new training; more connected vehicles; and more consumers basing purchases on online reviews.Sales Increase Forecast of Selected Auto Parts, 2016–2021Auto PartAnnual Increase2021 TotalBrake parts+2.6%$4.3 BElectronic components+5.2%$16.3 BFilters+2.4%$4.1 BPowertrain components+1.8%$13.1 BBatteries & ignition system components+1.7%$9.1 BFreedonia, 2017Consumer InsightsUnsurprisingly, more men, 60.6%, than women, 39.4%, shopped at an auto parts store during the past 4 weeks, according to The Media Audit’s 2019 aggregated consumer surveys in 66 US markets, representing more than 143 million American adults.Women are still an important target audience, as 12.4% of the base population of 74 million had shopped at an auto parts store – and an essentially equal percentage to men in the prime 25–49 age group, or 64.4%, to men’s 63.6%.Counter to misperception that most auto parts customers are from lower-income households, 58.6% of adults 18+ shopping at an auto parts store had annual incomes of $50,000 or more, with 16%, $75K–$100K, and 12.2%, $100K–$150K.Adults 18+ Who Shopped at an Auto Parts During the Past 4 Weeks, by Top 5 Make of Vehicle Owned, 2019Mass Market VehiclesPercentIndexLuxury VehiclesPercentIndexFord26.1%135BMW4.7%130Chevrolet26.1%142Cadillac3.0%140Toyota18.5%98Lexus2.4%90Honda14.9%103Audi2.2%108Dodge12.9%148Mercedes-Benz2.1%94Based on The Media Audit 2019 Rolling Aggregate Report, April 2019The E-Commerce Engine RoarsAccording to January 2019 analysis from Hedges & Company, online sales of new auto parts and accessories will total $12.3 billion this year, a 16% increase from 2018’s $10.6 billion. Total online sales will increase to $14.2 billion for 2020, $16.4 billion, 2021; and $19.0 billion, 2022, or a 55.5% increase from 2019 to 2022.Consumers will spend $7.4 billion, or 60.2% of 2019’s total, via mobile phones, an increase of 27.6% from 2018. Mobile purchases of new auto parts and accessories are projected to increase at an average annual rate of 25% through 2022.Sales of New Auto Parts & Accessories, Affected by Digital Influence*, 2018–2022YearTotal2018$142 B2019$148 B2020$153 B2021$159 B2022$162 BHedges & Company, 2019*based on search, reviews, exposure to product and brand advertising and watching video advertising or video content.As Always, the Amazon EffectHedges & Company estimates Amazon’s 2019 auto parts, accessories and car-care products sales will total $6.3 billion, with another $1.6 billion in OEM replacement parts, or a total of $8 billion; however, its future sales are forecasted to slow slightly.Amazon’s entry into the automotive aftermarket negatively and significantly affected in-store sales at the top three retailers, Advanced Auto Parts, AutoZone and O’Reilly, especially during 2017, but they have essentially rebounded from the effect.Speed-of-delivery is an advantage for the top three retailers, as auto repair shops need an ordered part within hours and can’t even wait for Amazon’s new one-day delivery for Prime members. Retailers are also touting their expertise to counter Amazon.Forecast of Amazon 1P and 3P Auto Parts*, 2018–2022YearTotal2018$6.4 B2019$8.0 B2020$10.0 B2021$12.2 B2022$15.0 BHedges & Company, 2019*1P is direct fulfillment by Amazon and includes Amazon Prime purchases; 3P is third-party sales through Amazon.Media Habits of Auto Parts BuyersThe Media Audit’s 2019 report also reveals 52.1% of adults 18+ who shopped at an auto parts store during the past 4 weeks had heavy exposure to the Internet, followed by outdoor, 36.1%; direct mail, 35.9%; radio, 30.1%; TV, 28.6%; and newspaper, 22.3%.Newspaper had the highest percentage of non-exposure, or 60.5%, with radio next, at 15.9%, and the Internet, the lowest, at 1.3%, indicating spending ad dollars in newspapers is not a good strategy for auto-parts retailers.Although it’s not surprising the largest percentage, or 55.5% of auto parts consumers 18+, watched TV during the 8–11pm period weekly, the largest index was those who watched from 5–7am, at 132, with 11pm–1am second, at 116.Adults 18+ Who Shopped at an Auto Parts Store During the Past 4 Weeks, by Streaming Media Service, 2019Streaming Media ServicePercentIndexStreaming Media ServicePercentIndexNetflix52.9%128HBO Go/HBO Now4.3%151Amazon Prime/Amazon Instant26.1%126Vudu4.3%151Hulu21.0%130Crackle3.2%189YouTube19.3%145Spectrum TV2.4%172iTunes5.5%150AT&T U-Verse2.0%141DirecTV4.5%160Sling TV1.7%154Based on The Media Audit’s 2019 Rolling Aggregate Report, April 2019 Additional AnalysisAccording to GAMCO Investors, Inc. and Automotive Aftermarket Suppliers Association (AASA) data, auto-parts pricing is forecast to increase through 2021.Increasing Prices vs. Volume To Drive Aftermarket Growth, 2017–2021YearPriceVolume2017+2.0%+1.1%2018+2.2%+1.4%2019+3.2%+0.3%2020+3.0%+0.4%2021+2.9%+0.3%GAMCO Investors, Inc. (IHS and AASA), November 2018AASA research also reveals that as vehicles age, consumers are less likely to take them to dealerships for service and, thus, reducing parts sales for light-vehicle dealers and increasing them for independent repair shops.US Aftermarket Service, by Vehicle Age, 2018Vehicle AgeVisit DealershipVisit Independent0–3 years61%39%3–6 years51%49%6–9 years38%62%9–12 years18%82%12–15 years16%84%15+ years6%94%GAMCO Investors, Inc. (AASA), November 2018Top 10 US Auto Parts Chains, by Number of Stores, 2018ChainStoresAutoZone5,540Advance Auto Parts5,175O’Reilly5,147Genuine Parts/NAPA1,368Pep Boys1,069Fisher Auto Parts500Auto-Wares300Replacement Parts, Inc.177Automotive Parts Headquarters124Hahn Automotive94GAMCO Investors, Inc. (Auto Aftermarket Industry Association), November 2018Sources: The NPD Group Website, 5/19; Gabelli & Company Website, 5/19; Rubber & Plastics News Website, 5/19; McKinsey&Company Website, 5/19; Freedonia Website, 5/19; The Media Audit Website, 5/19; Internet Retailer Website, 5/19; Hedges & Company Website, 5/19; CNN Business Website, 5/19.Updated: May 2019? 2019 Media Group Online, Inc. All rights reserved.For Your Local and Station Information ................
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