AASA Vision Conference: Best Of Times, Worst Of Times In The Aftermarket

AASA Vision: Best Of Times, Worst Of Times In The Aftermarket

AASA President and CEO Paul McCarthy invoked Charles Dickens when he described the current state of the aftermarket.

The Charles Dickens classic “A Tale of Two Cities” produced one of the most famous opening lines in all of literature: “It was the best of times, it was the worst of times … ”

More than 150 years after “A Tale of Two Cities” was published, the phrase is an apt description of what life has been like for aftermarket suppliers, distributors and retailers during the COVID-19 pandemic.

As Paul McCarthy, president and CEO of the Automotive Aftermarket Suppliers Association (AASA), kicked off the 2022 AASA Vision Conference in Dearborn, Michigan, he observed that the line “rings true in this age of uncertainty.”

“It has been some of the hardest times to simply do our jobs – to just get our products to the customer – yet it has also been some of the greatest prosperity that the aftermarket has ever experienced,” McCarthy said.

Stimulus-driven DIY sales have led to the best of times for the aftermarket’s publicly traded parts retailers, and they reported record growth in 2020 and 2021. At the same time, supply chain disruptions have made it challenging for some suppliers and distributors to get their hands on parts and raw materials.

“Typically, part of our industry’s appeal is our slow, steady, reliable growth – our consistent cash-flow generation,” McCarthy said. “During the pandemic, we seem to have found another level of demand for our products. And we’ve also been in a battle for availability. The reality over the last two years is that if you could get the part to the customer, they would likely buy it.”

While the past two years have been prosperous for many aftermarket participants, it’s also been the worst of times in the sense that the economy has been hit with “a flock of black swans.” Even before this once-in-a-century pandemic hit, the aftermarket was grappling with tariffs on imported Chinese goods as well as the biggest changes to U.S. trade policy in decades.

“We haven’t had a supply chain disruption of this magnitude for 75 years,” McCarthy said. “It’s been over 40 years since we’ve seen inflation like this. It’s been decades since we’ve seen a job market this tight. If that wasn’t enough, members tell us that we’ve experienced some of the highest levels of government intervention in the aftermarket, maybe in our history.”

On top of that, there’s a land war in Europe, and U.S.-Sino relations are as tense as they’ve been in decades. Potential curveballs on the horizon include more interest-rate hikes, gas-price increases and the specter of Russian cyberattacks.

Still, although it’s “an environment where it may not be easy for us,” it’s one “where we can do very well.”

“Our ability – despite all these obstacles – to fill orders, to keep our businesses running, to sustain our teams, to work together up and down the value chain, it’s frankly amazing how well the aftermarket has performed,” McCarthy added. “It proves our resilience and our endurance. So don’t expect things to get any easier, but the aftermarket and aftermarket suppliers, we’ve shown that we matter.”

A New Golden Age?

Despite all the “bumps in the road,” McCarthy posed this question to AASA Vision attendees: “Is there a chance that these strong sales that we’ve seen are not a blip, that instead they are the start of a new golden age?”

“The transformative cultural shifts that we’re seeing as a result of the pandemic, we think they bode well for the future of the aftermarket – that we are leaving the pandemic with a more auto-centric lifestyle than when we went into it,” McCarthy asserted.

To buttress his point, he noted that used-car prices are higher than they’ve been since World War II; there are more than 280 million vehicles in operation in the United States; and the miles-driven recovery “has exceeded all forecasts.”  

With commuters and travelers still fearful of mass transportation, “Americans are moving toward more car-centric locales and lifestyles,” he added.

“We see it in consumers’ desire for more space. We see it in the house prices, in people moving to the West, to the South, to smaller cities, to exurbs. Coming out of COVID, where most Americans now seem to want to live, they need a car or a third or a fourth car. They need us, the aftermarket.”

While technology might be a source of angst for some, “this unstoppable march of increasing vehicle content has been incredibly powerful for the aftermarket ticket,” McCarthy declared. “And we think that will continue.”

And the increasing in-vehicle connectivity “is making our time in the car more entertaining, more productive, more appealing.”

“We would argue that this is a global opportunity that the pandemic underscored to consumers around the world: the safety, the appeal of individual transport and the freedom that it brings. So we think we could look back in 2040, 2050, and say that this was the start of a new golden age of transportation. And we could say that we grabbed this opportunity and we created new ways forward.”

You May Also Like

Do You Suffer From CED? Good News – It’s Curable

The creep of Customer Experience Decline can take hold if you allow your shop to lose focus.

In business, as in life, mistakes WILL happen. How you respond will make the difference in whether your customer will remain loyal and continue to do business with your store. Customer relations are easy as long as things go well – when they don’t, you and your team have the opportunity to shine or look like the proverbial pile of…well, you know. 

Tool Time Podcast: CTA Tools

Nadine Battah and Eric Garbe learn about CTA Tools’ history and innovative technology.

The Purge: Flushing & Filling the Coolant

This job isn’t needed as often as it used to be, but it’s still important.

ADAS: Coming of Age

Driver-assist systems are categorized into levels, determined by the amount of automation for any given system.

Minding Your P’s And Q’s

Price and Quality are two of the most important considerations for customers purchasing from you.

Other Posts

Tool Intel – Understanding Air Tool Fittings and Couplers

Why don’t air tools come with fittings installed? Here’s why customers need to buy what they actually need.

Read the April Digital Edition of Counterman

The April issue contains article designed for technical training, management efficiency and store profitability.

ASE Education Foundation Seeking Outstanding Instructor

Nominations are being accepted for the 2024 Byrl Shoemaker/ASE Education Foundation Instructor of the Year award.

Why Does Engine Coolant Need Replacement?

Two specifications can be used to justify replacement — the condition of the additive package & the freezing point.