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The well-documented surge in new-car sales over the last five years should have long-term positive implications for the automotive aftermarket, according to a new report released today by the Automotive Industries Association of Canada (AIA).

The association’s biennial Outlook Study,says two consecutive years of record sales numbers will bring tangible benefits to automotive repair and service shops and auto part retailers.

More than 1.9 million new passenger cars and light trucks were sold in 2015 –a new sales record, beating 2014’s record number of 1.85 million by some 2.63%. Independent shops can expect continued growth over the next few years as those new vehicles work their way into the aftermarket stream for maintenance and repairs, the Outlook Study suggests.

Indeed, the aftermarket has already seen an increase of some $600 million in sales over 2014. Retail sales (excluding collision repairs) in the Canadian light vehicle aftermarket totaled $21.0 billion in 2015, up 2.6% over 2014.

Sale of parts totaled $12.24 billion (three-quarters of that professionally installed, one-quarter sold to DIYers), while the labor component totaled $8.75 billion.

➤ The AIA projects the Canadian aftermarket will grow to about $23 billion by 2019.

The fairly rosy picture of the automotive aftermarket’s near-term future could be threatened, however, by a number of disruptive trends, the report says.

➤ Some analysts believe ride sharing, alternative powertrain technologies, and connected/autonomous vehicles could hurt aftermarket sales.

Business fulfills each and every one of them“Specifically, some analysts have raised questions regarding as a number of significant structural changes within the industry, and whether they could lead to a radical realignment and reshaping of the market,” it says.

Among other findings:

  • The cost of automotive repair has increased over the last two years, while the cost of parts and gasoline has dropped, resulting in net savings to consumers of 7.1% in the cost of operating a motor vehicle.
  • Approximately 388,100 Canadians were employed at 4,656 retail stores specializing in automotive parts, accessories, and tires, and 23,050 automotive repair and maintenance shops, including dealerships, generalists, specialists, chains, independents, glass, and collision, shops in 2015 – up 2.2 per cent from the 379,800 employees reported in 2014.
  • DIY activity is declining due to increased vehicle complexity. Nevertheless, the sale of parts to DIYers continues to grow at an average of 1.1% per year. In 2015, DIY parts sales totaled about $3 billion – the second highest year since 2011.

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