For this week’s edition of "The Pulse," TLG Research looks at quarter-to-quarter changes in aftermarket price analysis. Overall, based on service pricing and part pricing, the typical vehicle owner saw an increase of approximately 4.1 percent, TLG says, with normalized oil pricing. If one considers the increase in motor oil pricing, the increase is nominally higher.
Looking specifically at parts pricing, the overall 2012 change for pricing ranged from 2.9 percent to 4.5 percent (no oil) depending on the product line. This was in line with the earlier projections, according to TLG. It also supports a bit of pricing pressure based on some raw material expenses, the aftermarket research firm noted. In addition, manufacturers struggled with large health insurance increases, plant operation and utility expenses in the fourth quarter of 2012, though wages remained fairly stagnant. Again, this was in line with projections, according to TLG.
"For 2013, we would expect further price increase pressures," TLG stated in its research report. "The causes will once again be recapturing health insurance increases, quite likely wage increases since many manufacturers struggle with attracting the needed talent pool and utility expenses, along with other operating expenses."
Working against the increases will be:
1. Continued pressure by customers to hold the line on pricing
2. Continued high unemployment
3. Continued soft GDP growth, with some notable economists pointing toward no growth
4. Vehicle owner reluctance to spend more, and continuing to push off repair expenses wherever possible
For 2013, TLG has made the following pricing predictions:
Part Pricing – overall average of 3.7 percent, range of 3.2 percent to 4.9 percent
Service Pricing – overall average of 3.6 percent, range of flat to 5.8 percent depending on region
Definitions:
Parts Category
1. Based on reported pricing of parts to service repair centers
2. Represents change of current quarter over the prior quarter
Service Category
1. Represents total job repair order price to prior quarter
Methodology for Pricing Calculations:
The pricing is based on changes in the current quarter relative to the prior quarter. The data is collected from service repair centers with additional service repair center level pricing information provided by Nu-Way Automotive. The "Parts Categories" includes only the parts. The "Service Categories" include both parts and labor and is based on the average reported. Pricing is collected in percent change, and is averaged across the U.S. Where needed, the data is weighted in order to represent the entire market.
About TLG Research
Focused exclusively on all segments of the global automotive industry, TLG Research (TLGR) offers clients a unique approach to obtaining and keeping a global competitive advantage. Recognized as the “Parts Problem Solvers,” TLGR provides information quickly and cost effectively. Founded in 1992 by Thomas Langer, a 30-year industry veteran, TLGR, through its proprietary database, provides a unique "menu driven" approach to offer services such as price comparisons and strategies, product/market data, channel information, competitive analysis, surveys, new product strategies and technical writing.