Desrosiers Automotive Consultants Inc., working in partnership with the Automotive Aftermarket Retailers of Ontario (AARO), has collected direct industry feedback on the Canadian automotive aftermarket in the first half of 2023 alongside an outlook for the rest of the year.

“The aftermarket has been a pillar of strength and consistency for the automotive space in recent years” commented Andrew King, Managing Partner at DAC. He continued, “While pricing remains a concern, parts supply issues have shown some signs of improvement and industry optimism has increased in turn.”

A clear majority of aftermarket retailers noted that their sales have increased noticeably in the first half of 2023. Of total respondents, 40.7% cited a sales increase of between one and ten percent with a further 35.6% noting increases in excess of ten percent compared to the first half of 2022.

When asked about their sales performance compared to pre-pandemic, the overwhelming majority of respondents noted that their sales are above those levels. This first half response of 71.2% grew from the 51.8% of respondents that noted above pre-pandemic sales at the start of this year.

When asked about their expectations of sales for the whole of 2023 compared to the previous year, the majority of respondents cited expectations of growth. Growth of between one and ten percent was expected by 53.5% of respondents with a further 29.3% citing expectations in excess of ten percent. At the beginning of this year, only 12.0% of respondents expected growth in the eleven plus percent category.

The well-established issues with parts supply continued into the first half of 2023. From jobbers, 67.3% of aftermaket retailers cited sourcing issues. This figure for new vehicle dealers reached 84.6%. While these rates are obviously troubling they do infact reflect an improvement from the situation in January. At that time, when asked about these sourcing difficulties, 88.7% of respondents noted supply issues from jobbers and 94.3% from new vehicle dealers.

For the first half of 2023, respondents noted that parts prices from both jobbers and new vehicle dealers continued to increase, with the bulk of responses pointing towards increases between six and ten percent, and a significant minority indicating increases of 10% plus – a concerning level of inflation for the industry.

With clear targets set for zero emission vehicles in Canada, the aftermarket will see more and more exposure to the mandated vehicles and will need to adjust in turn. When asked about whether they had worked on battery electric vehicles in the first half of 2023, 48.1% of respondents indicated that they had. This figure was higher for plug-in hybrid vehicles at 71.2% – impressive numbers considering that ZEVs constitute less than 2% of the Canadian light vehicle fleet.

For more information on AARO contact Diane Freeman (diane.freeman@aaro.ca). For more information and pricing of DAC’s aftermarket market forecasts for more than 25 different aftermarket product areas contact Daniel Azarov (daniel@desrosiers.ca).