U.S. Automotive Aftermarket Industry Beats Expectations, Growing 8.6% in 2023

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Jun 06, 2024, 12:00 ET

Updated report from MEMA Aftermarket Suppliers, Auto Care Association and S&P Global provides comprehensive outlook for auto care industry through 2027

BETHESDA, Md. and RESEARCH TRIANGLE PARK, N.C., June 6, 2024 /PRNewswire/ -- The Auto Care Association, in collaboration with MEMA Aftermarket Suppliers, is pleased to announce the availability of the 2024 Joint Forecast Model, offering a comprehensive review and analysis of the size of the U.S. aftermarket, the forecast for growth through 2027, and the trends in the industry shaping this growth. The Joint Forecast Model is prepared by S&P Global.

The forecast model provides a detailed examination of the automotive aftermarket landscape, offering insights into key influences and market trends shaping the industry's changing size. Drawing on extensive research and analysis, the model delivers valuable projections for industry stakeholders, enabling informed decision-making and strategic planning.

2023 Review and 2024 Forecast Insights

The Joint Forecast Model sheds light on the performance of the U.S. aftermarket in 2023 and provides insightful forecasts for 2024. Despite challenges such as persistent inflation, the aftermarket demonstrated resilience, with total aftermarket sales growing by 8.6% in 2023 to $391 billion. Dealers' service centers, auto parts stores, and general auto repair sectors all experienced notable growth, outperforming initial estimates.

Key Market Trends and Projections

The forecast model identifies several key market trends influencing the aftermarket, including:

Labor Market Dynamics: Rising wages and a strong labor market are driving consumer spending, despite inflationary pressures.
Inflation Outlook: Much of the growth is attributed to the industry's ability to charge more for service and for parts to keep up with inflation which is expected to gradually recede, with rates returning to the Fed's target range by late 2025.
Consumer Sentiment: While consumer sentiment remains low, spending levels have remained resilient. However, continued pessimism may pose risks to future spending patterns.
Vehicle Sales and Fleet Growth: Despite fluctuations, new vehicle sales are projected to stabilize, contributing to the growth of the U.S. vehicle fleet.
E-commerce Growth: E-commerce purchases of DIY parts continue to rise, reflecting shifting consumer preferences and increasing convenience.

Forecast for 2024 and Beyond

The story in 2023 was not dramatically different than in 2022 with respect to the key influences on the U.S. aftermarket. Inflation remained stubbornly high despite retreating gas prices, but a resilient consumer kept driving and spending across the economy, including most importantly on their vehicle. Elevated inflation remains a roadblock to potential federal rate cuts, but the labor market remains strong and wages continue to rise. As a result, despite some pessimism from the consumer, spending remains high which bodes well for the aftermarket.

The Joint Forecast Model predicts continued growth for the U.S. automotive aftermarket, with sales expected to increase by 5.9% in 2024. Looking ahead, average growth rates of 4.5% are forecasted for the period from 2025 to 2027, as inflationary effects subside and the aftermarket grows to $472 billion.

"MEMA Aftermarket Suppliers and the Auto Care Association are committed to providing industry stakeholders with valuable insights and forecasts to navigate a dynamic, shifting – and growing – automotive aftermarket," said Paul McCarthy, president and CEO, MEMA Aftermarket Suppliers. "Our Joint Channel Forecast's projections for long-term growth, driven by structural market tailwinds and the strength of the independent aftermarket, underscore the enduring value of repair market competition and consumer choice. Despite inflationary pressures, vehicle owners are investing more in their cars, with an aging vehicle fleet and significant growth in both service and retail sectors supporting our industry's trajectory. The report's analysis on how these factors are shaping our market provide essential clarity for our members as they strategize for the future."

"The data reveals promising growth prospects for our industry, showcasing resilience in the face of challenges," said Bill Hanvey, president and CEO, Auto Care Association. "As we navigate the evolving market dynamics, industry stakeholders can expect a wealth of opportunities to emerge, driven by consumer demand, the aging vehicle population and technological advancements. This forecast equips stakeholders with actionable insights to seize these opportunities and drive continued success in the automotive aftermarket."

The Joint Channel Forecast Model report is available to Auto Care Association and MEMA Aftermarket Suppliers members as a membership benefit.

Auto Care members can access the Joint Channel Forecast report in the 2025 Auto Care Factbook at digital.autocare.org/2025factbook. MEMA Aftermarket Suppliers can access the report at mema.org/JCF.

SOURCE Auto Care Association