David Portalatin has spent the past 14 years studying consumer purchase patterns and identifying trends in consumer behavior. As a result, Portalatin has observed that the American consumer’s dependence upon the automobile is a key driver impacting how their dollars are spent. Whether fueling, maintaining, or accessorizing their cars, or fueling their body during a full day on the road, consumers’ driving behavior is influencing a significant portion of their total buying power. Portalatin helps companies understand the marketplace and how consumer trends can impact their business. He is a frequent speaker at industry events and corporate meetings with retailers and manufacturers in the automotive aftermarket, motor fuels and convenience retailing industries.
In this exclusive interview, Portalatin shares his thoughts on current consumer behaviors as they relate to the motor vehicle industry, and talks about his upcoming presentation at the Global Automotive Aftermarket Symposium (GAAS), which takes place May 6-7 in Chicago. At GAAS, Portalatin will reveal the results of a survey completed specifically for the event, examining current consumer behaviors in light of current economic trends.
NPD recently released a report on the top and bottom markets for aftermarket sales. In the press release, you made an interesting point about how the aftermarket really isn’t homogenous and you really have to play it by ear, market by market. I’d say that sounds like good news for the aftermarket, wouldn’t you?
I think it is good news for the aftermarket. The reality is that we talk about things like the economy as if every single community, every single neighborhood, every single automotive service bay and every single auto parts store had exactly the same characteristics and the truth is there is a lot of diversity out there. There are a lot of areas that are doing quite well and I think even in this economy you’ll find examples of individual businesses that are doing quite well.
In February, NPD released a report about economic concerns and gas prices, and how drivers are continuing to limit miles driven as a result. We did see a drop in gas prices for a time but they are starting to creep back up again. At this point, do you anticipate that miles driven will continue to decline?
I believe that the behavioral change that we’ve seen in miles driven is a change that we haven’t experienced in more than 25 years. When you have change of that nature, you can’t expect it to just flip-flop overnight. In other words, we didn’t start changing our driving behaviors just because gas prices hit $4 a gallon. The reality is those behavioral changes began occurring in mid-to-late 2005. Three years later, we’re seeing some very measurable differences in behavior. It may take a similar period of time for people to change back. I think for the near-term, we’re looking at a ‘new normal,’ in terms of the ways consumers approach the vehicles they drive and especially in the near-term economy where consumers are looking for ways to cut back. Limiting trips is still viewed as a viable way to cut back.
Tell us about your upcoming presentation at GAAS and the research that NPD has been working on exclusively for this event.
The most important thing right now, from our perspective, is how the consumer is responding to the economic environment around them in 2009. We’ve heard a lot about changes in the vehicle make-up, aging vehicles that should need some repair and maintenance and if that will provide a lift for businesses, and I think it will. But on the other hand, two of the most important factors driving demand for automotive services are the number of vehicles on the road and how many miles those vehicles drive. And, 2009 may be a year where we don’t see growth in either of those two factors, so it’s a bit of a balancing act. We’re conducting research right now to be exclusively released at the Global Automotive Aftermarket Symposium that measures where consumers are, what they are thinking about the current environment and trying to anticipate what their behaviors might be in the months ahead.
Have you been following the proposed “Cash for Clunkers” legislation? Any thoughts?
If we enter into an era where consumers are not buying the cars at the same rate that we historically have and at the same time we’re scrapping the clunkers on the other end of the vehicle spectrum, the inescapable conclusion is that you will have for the first time in decades, a declining vehicle population. Something that is very appealing for consumers right now is the idea that they can make their existing vehicles operate more efficiently and keep them on the road longer. So, to the extent that this consumer mindset exists, there is an opportunity for companies that can fill that need. I think that is one of the key areas of opportunity right now.
For more information about the 2009 Global Automotive Aftermarket Symposium, go to: www.globalsymposium.org.
ABOUT THE AUTHOR
Amy Antenora has served as Editor of aftermarketNews since 2002. She is also Managing Editor of sister publication Counterman magazine.