DASH4 BANNER (2) 2015

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Point Of View: How’s The Weather?

The overall auto industry is one of THE biggest segments of the U.S. economy, and the independent aftermarket is a significant portion of the auto industry. Our industry’s products and services create immense economic impact through employment, tax revenues, capital investment and countless other ways. This $275-billion business has a financial influence on all portions of our economic lives … a major financial impact.

Yet, I am always amazed how weather is one of the primary drivers of our business … a fundamental and key indicator of where are business is and where it is going. Spring weather, summer weather, fall weather, winter weather – the temperatures, the volume of precipitation, the severity of the storms — all dictate how sales go, how revenue goes, how profits come and go.

In a Feb. 4 analysis from our friends at BB&T Capital Markets, the recent wacky winter weather, particularly in the eastern U.S., was credited with the potential of a positive effect on parts ales. “Notably, we anticipate that current wintry conditions in the eastern half of the country will drive parts failure and benefit DIFM service providers in Q1, while DIY comps could be challenged as consumers opt to delay driveway/garage repairs. However, as winter weather should drive a sustained increase in failure rates as we approach spring, we believe both DIY and DIFM trends will improve in Q2,” the analysis reported.

According to BB&T’s viewpoint, the harsh winter weather we have seen in large portions of the country over the past two months is already driving categories such as batteries, starters, alternators, suspension and brakes, and eastern and Midwestern repair entities are the ones seeing the benefit of the weather. And, that impact will not just effect the repair base but the distribution channel as well.

In the West, drought conditions and generally mild weather could benefit DIY volumes, according to the BB&T perspective, while those same conditions “could be a headwind to maintenance-related agricultural/commercial volumes.”

Overall, the general outlook for the beginning of the year bodes well.

“With winter weather conditions improving demand in the majority of the country, we believe industry volumes are poised for growth in [the first half of 2014],” according to the BB&T report. “As weather extremes (colder winters and warmer summers) historically enhance longer-term aftermarket demand, we maintain our positive industry outlook for 2014.”

Among the many things we have little control over in our lives, weather is the most profound. Ask the folks who spent 20 hours in their cars in Atlanta during a recent winter storm. When weather speaks, like it or not, we better listen.

Whether we like it or not, weather can be a key factor in many product categories, and this winter’s weather across the country has had an impact already. Yes, weather is something we all talk about; in this industry, it is also something we do something about.

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Gary A. Molinaro
Publisher

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DASH4 BANNER (2) 2015