What is “Aftermarket?” Is It A Unique Industry?
What is “aftermarket” and is this actually a unique industry?
What is the automotive aftermarket? And is it actually unique among industries? We say it is all the time.
But is it?
We’ve compiled some compelling reasons to say the answer is “yes.” Here are some specific things that define what the automotive aftermarket is, and what makes the aftermarket unique among industries in the world.
What is the aftermarket?
The aftermarket definition is simple. It’s the auto industry’s after-sale market, and it includes vehicle parts and equipment, service repair shops, collision repair shops, replacement tires, and really, any parts and accessories, sold after the original vehicle.
Other than the fact that our industry obviously sells goods and services for vehicles, there are other things that stand out as unique.
Complex fitment requirements
The automotive parts world is full of products that have specific fitment and compatibility requirements. In fact, if you try to install an incorrect part it may result in mechanical failure. A part for a ’57 Chevy probably has no place on a 2023 Bronco. Maybe a generic floor mat but not much else.
The aftermarket’s fitment requirements even spurred the development of the ACES data standard for fitment (Aftermarket Catalog Exchange Standard). The ACES standard covers over 60,000 combinations of year, make and model. But fitment can include other things, like bed length, four wheel drive vs. front wheel drive, pickup truck cab size, and many other requirements.
The aftermarket has a wide product range
The automotive aftermarket includes millions of part numbers. About ten years ago we came up with an estimate of six million part numbers. Today, with more imported parts, more private label parts, more “manupactured” parts, more complex technology used on vehicles, and because of parts proliferation in general, it’s probably more than twice that amount. Not many industries have 12 to 15 million part numbers to keep track of.
Not only do millions of new vehicles each year add to the growing list of part numbers, but vehicle age is a factor. For one thing, the average age of a vehicle on the road keeps getting older. For another, vintage and classic cars are a big deal in our industry. There’s still demand for parts that fit a Model T Ford, and some Model Ts are over 100 years old.
Technical specifications and knowledge requirements
The aftermarket is full of technical requirements and specifications. The Society of Automotive Engineers (SAE), itself over 100 years old, has defined standards for just about anything you can think of for a vehicle. They have nearly 50,000 technical publications available for download covering things from designing snowmobile headlamps, to testing the upper temperature limit of elastomers used in cars.
That technical requirement carries over to professionals in the automotive aftermarket. Engineers and mechanics undergo rigorous training and testing in order to perform some types of work. The National Institute for Automotive Service Excellence (ASE) is a non-profit organization conducting testing for automotive technicians. There are currently over 222,000 technicians holding some type of ASE certification, with an additional 68,000 students holding ASE Entry-Level certification.
The Do-It-Yourself car culture
We love our cars! The aftermarket is supported by millions of automotive enthusiasts to love to tinker and fix things. The Do-It-Yourself (DIY) culture is live and well, and was recently fueled by the COVID-19 pandemic, that created an uptick in DIY activities.
Supporting the DIY culture are thousands of car clubs, websites, car shows and cruise-ins, and even books and movies.
Related to the DIY culture is the desire for customization. Enthusiasts like to personalize their vehicles to make them unique. This can take the form of custom paint, custom interiors, aftermarket tires/wheels, vehicle modifications to suspension or drivetrain, and many other things. Like the fashion industry, trends go in and out of style in the aftermarket. Last year’s rat rod may be this year’s restomod.
The aftermarket is huge
The aftermarket is so large, it’s a significant factor when calculating this nation’s Gross Domestic Product (GDP). By 2026 there will be over 300,000 businesses in the US serving the auto care industry in some way, including stores that sell parts, car washes, tire dealers and convenience stores. That doesn’t count 130,000 new and used car dealers, adding up to over 430,000 consumer-facing businesses by 2026.
Add in distributors, wholesalers and manufacturers and it’s well over 540 million businesses.
All those businesses employ people, and the Auto Care Association has employment in the auto care industry at 4.8 million people. That’s a lot of folks paying taxes, supporting families and contributing to local economies. So, what is “aftermarket?” It’s a whole lot of businesses and people contributing to the economy!
Speaking of huge, the automotive aftermarket supports a massive trade show each year in Las Vegas. The SEMA Show and AAPEX are the 4th largest trade show in the US, and one of the largest in the world.
Aftermarket seasonal trends
The aftermarket has unique seasonality. Many industries have regular peak seasons but not the aftermarket. Many products have peak sales in March, April and May. Some products related to travel in cars, cruising, or general maintenance will peak in the summer. Many truck products related to hunting, fishing, camping or tailgating will peak in the fall. Towing products will sell well in the weeks leading up to Memorial Day and Labor Day. Collision repair products will sell well in the winter and after an ice storm. Winterizing products, batteries, snow tires and wiper fluid sell in the winter.
Technological advancements in the auto industry
The automotive industry constantly improves its technology (one reason the average age of cars is increasing). The aftermarket has to keep up with that new technology in order to supply products and services. Many times the aftermarket industry develops its own technology that ends up being used by OEM manufacturers.
The auto industry and the automotive aftermarket contribute to developments in electric power technology, artificial intelligence research, predictive maintenance, cybersecurity, innovations in manufacturing including 3D printing, recycling technology, emissions and environmental technology and too many more to list.
Regulatory compliance
The automotive aftermarket has to comply with many regulations. These cover diverse areas from emissions to safety.
The Department of Transportation (DOT) regulates vehicle safety and under the DOT umbrella are departments like the Federal Motor Carrier Safety Administration (FMCSA) and Federal Highway Administration (FHWA).
Any parts that are governed by regulations have to be replaced by aftermarket parts that have also been tested and also comply with regulations.
Emissions is another big area of regulation. The California Air Resources Board (CARB) and the Environmental Protection Agency (EPA) regulate any part or function that creates emissions. OEMs and their suppliers have to comply with these regulations, as does any replacement aftermarket part that affects emissions.
Conclusion
Hopefully this article gave you insight when you wonder what is “aftermarket,” and whether the automotive aftermarket industry is actually unique.
We’d say it is definitely unique among industries on this planet.
What do you think? Did we leave something out? Let us know!