According to a recent survey, automotive aftermarket shops in Canada’s most populous province expect strong growth again in 2023.

The survey, conducted by DesRosiers Automotive Consultants (DAC) in conjunction with the Automotive Aftermarket Retailers of Ontario (AARO) association, 61% of the respondent automotive service providers expect to grow in 2023, with 12% expecting greater than 11% growth.

 “The automotive aftermarket remained buoyant in 2022 with a majority of retailers seeing growing sales and expecting further growth throughout 2023,” says Andrew King, Managing Partner at DAC. He continued, “However, persistent issues surrounding parts supply and prices remain problematic across the industry.”

The recent findings continues a trend of strong performance for most players in the segment throughout the pandemic and general economic recovery.

Aftermarket retailers largely indicated sales growth when asked about their performances in 2022 as compared to 2021.

A total of 34.2% of responses noted sales increases of eleven percent or more while 29.8% indicated more modest growth of between one and ten percent.

Not every ASP business has seen growth reflective of this general trend however, highlighting the variable nature of the industry experience. So, while approximately two-thirds of ASP businesses responding had put their experience firmly in the growth category, 13.2% of respondents cited no change and more than 20 percent noted a decrease.

When asked to compare their 2022 sales to pre-pandemic, just over half (51.8%) of respondents noted that their sales have surpassed those levels with 19.1% citing similar performance. However, 29.1% of respondents still indicated seeing sales below those seen before early 2020.

In rough terms, 60% of the ASPs expect to see sales grow in 2023, while a 40% are not:

• 49.1% expecting increases of between one and ten percent with a further;
• 12.0% expected growth in excess of ten percent;
• Close to 20% of respondents expect no significant change;
• Close to 20% expecting modest declines.

The survey also took a more detailed look at where service was growing and where it was not.

In 2022, oil changes and regular maintenance saw increases according to 47.2% of respondents with only 11.3% citing business declines.

For tire changes and sales, a slim majority cited stable business compared to 2021. For diagnostic work, respondents were split between seeing increased business and no notable change.

Preventative maintenance work also leaned slightly towards ‘no change’ while 39.6% of respondents still noted increased business.

Tire change and preventative maintenance were the most likely categories to see decreased business, at 18.9% of responses for both categories; although this remained a minority view.

The service landscape was not without its challenges, though, with parts availability being a notable drag on operations.

The survey noted that a total of 88.7% of respondents cited issues sourcing parts from jobbers with 94.3% citing issues sourcing from new vehicle dealers.

Part and parcel with this was price growth.

From jobbers, 69.8% of respondents saw parts price growth at six percent or above with the same figure for new vehicle dealers at 63.2%. Nearly all other respondents also saw price growth, albeit in the one to five percent range.

For more information about DesRosiers Automotive Consultants, contact Daniel Azarov at daniel@desrosiers.ca.

For more information about Automotive Aftermarket Retailers of Ontario, contact Diane Freeman at diane.freeman@aaro.ca.