The story for a number of years within the U.S. automotive aftermarket industry has been that dollar sales have always outpaced unit sales, but the mid-year 2016 results show that a turning point has been reached, according to retail sales data from global information company The NPD Group Inc. Unit/quart sales grew 1.8 percent in the first half of 2016, and for the first time in four years unit sales outpaced dollar sales within the industry.
At 1.5 percent growth, the dollar volume sales trend remained positive during the first six months of the year, but the growth rate has slowed versus prior years. On the other hand, the growth rate of unit/quart sales is accelerating. This shift, combined with a dip in average selling price, ties in with the fact that lower-priced products are selling in place of more premium products, according to NPD.
“A few key trends have been favorable to the automotive aftermarket industry so far this year, notably that miles driven continues to increase, and gasoline prices, on average, are lower than several years ago,” said Nathan Shipley, director, automotive industry analyst, The NPD Group. “Nevertheless, the industry’s performance in terms of dollar growth has been softer than prior years, influenced by a few main themes: the lack of no major weather extremes such as extreme cold or rain, which generally provides a boost to the industry; a change in the mix of what’s selling as we see from the decrease in average selling price, yet strong growth in unit sales; and the fact that two years of 4 percent dollar growth set high standards for 2016.”
The movement toward lower-priced products selling in place of more premium products is evident when diving into the industry’s top three category trend drivers — batteries, motor oil and wiper blades — which represent more than 43 percent of total industry volume. Looking at battery sales, average selling price for the category declined 2 percent, as the “good” grade unit share grew five share points at the expense of the “better” and “best” grades. Within motor oil, the average price per quart was down 1 percent; the two growing segments, full synthetic and high-mileage, experienced quart price declines thanks in large part to more promotions in the first half of this year compared to last year.
Pricing changes also are influencing the wiper blade category. When it comes to conventional blades, value and premium unit volume declined while standard grew, and with beam blades, the standard types grew while premium declined.
“NPD forecasts that automotive aftermarket retail dollar sales will grow the industry about 2.7 percent for the year, returning to a more modest rate of growth along with annual miles driven,” added Shipley. “Pricing, promotions and the categories in which consumers choose to invest for the remainder of the year will be influential to the year-end results.”
