Sluggish economic times leave aftermarket faring better than dealerships, but still struggling

A faltering economy and soaring gas prices are driving vehicle owners to put preventive maintenance on pause until needed, industry insiders say.

But the aftermarket will remain ahead of the dealership sector, mainly because of lower parts and service prices, says Mary-Beth Kellenberger, automotive and transportation consultant with Frost & Sullivan.

“Dealerships are struggling to keep customers because technicians cost more and OE parts cost more,” she says. “Time between scheduled maintenance services is widening. But ultimately the aftermarket shops, independent repair shops and franchises will gain more people than the dealership channel.”

But aftermarket resellers are not exempt from feeling the pinch of tighter consumer wallets.

“A lot of the shops are doing the basic oil changes, but many people are putting off bigger things until they break. Belt sales and fuel filters are down more than air filters,” says Norman Carrick, manager at Hayden Auto Supply, Inc., in Lexington Park, MD. “You are just not getting the belts, the hoses, as much. People are not flushing their coolant systems as much as they should, not doing proper transmission system maintenance.”

And less regular maintenance can lead to more expensive repairs down the road, Carrick cautions. “It just forces everything to work harder,” he says.

But despite seeing preventive maintenance hit a lull in the spring, Hayden’s sales numbers were back to normal in June, Carrick says. But gas prices continue to bring uncertainty to the business.

“The biggest problem is that when you don’t know how much gas is going to cost to go to work next week, it is hard to budget,” Carrick says. “But we watch our overtime and our delivery procedures. We have three delivery trucks, but you try to plan a little bit to make the runs the most profitable, like through trip consolidation.”

But not all resellers are bemoaning the economy and gas prices. Changes in car ownership attitudes and behavior are credited for helping sales to remain fairly steady at Bridge Auto Parts in Elmsford, NY, says owner Russell Burns.

“Over the last few years, people every three years were getting a new car, so they would only fix what breaks down,” he says. “But now, people are again starting to realize that they need to do preventive maintenance. And none of my six stores have sales that are down. I haven’t seen a major decline, but I haven’t seen a spurt either.” 

But expendable, cosmetic part purchases are suffering, Burns says. “Sales are down in accessory items, like seat, car and steering wheel covers, because these are not a necessity.”