In this newsletter and in our parent publication, The Greensheet, we present a great deal of information that directly or indirectly tells us how the industry is performing. For me, one of the biggest improvements I have seen in my nearly 30 years around this industry is that we now have real market research and other survey work that gives us reliable measures to help us determine how the market is moving and what the general feel is for the near future of the aftermarket.
Over the last several years, the aftermarket has seen a reasonably prosperous economic sector. With the work done over the prior years – especially the application of real technology that has help us manage inventory and parts distribution much more effectively and efficiently – we have reaped the benefits of an economic climate that presented outstanding opportunities for our industry. Factors like the age of the fleet, the size of the fleet and the miles driven, added to the dramatic reduction in new car sales, put us all in the position to prosper while most of the economy floundered.
And, as great as those times may have been, our industry maintained a cynical attitude about where business was going, never really celebrating the success and always looking around the corner for the next downturn.
As we went through the past year, we have all seen “road signs” that point to possibly less-prosperous times ahead. There are various industry surveys that indicate that confidence is lagging among industry insiders and that sales at all levels are flat or a bit down from last year. Those kind of indicators can paint a dark picture for the future, but I am here to say that we all need to put things in prospective when it comes to today’s indicators.
First of all, we need to remember that the 2012 numbers are a bit down from 2011 levels, but then again, those 2011 figures reflected some pretty heady days. As much as we would all like constant hockey-stick style financial charts, it is unrealistic to think we can always push the number upward. In matter of fact, one of the great things about this industry is that the lows are seldom dramatically low – not a statement most other market sectors can claim, and one thing for which we should we very thankful.
And, at least from this uneducated perspective, I expect the service market to continue to hold solid, with many consumers still holding on to the value that keeping their vehicles running well and longer is an economic necessity in an economy that may be growing but growing slowly. Looking at the regional and national service chains also gives me reasonable confidence, as they continue to position themselves to grab a point or two in market share and keeping their service bays productive.
Make no mistake about, I am one of the least-qualified people to be making economic predictions, and, in statement of fact, I am not here to make prognostications about what the aftermarket financials will be like in 2013 and beyond. But I do believe in this industry and that we have positioned ourselves to be successful on a reasonably-level playing field.
There is much work remaining – as there always is – but this industry as a whole, and the hard parts/service sector specifically, is ready to continue to build on the work we have put in place over the last decade. The future is never certain and success is always elusive, but I know that the coming year can be a good one for the aftermarket and for service shops at all levels.
Gary A. Molinaro
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