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The Growth of AfterMarket

  • There are 255 million automobiles and light trucks on the road in the United States. These vehicles will travel nearly three trillion miles in 2012 -- an average of 12,500 miles per vehicle. In 2012 the average vehicle used $549 of replacement parts—a total of $80 billion of parts at wholesale distribution pricing [AAIA factbook 2012].

    • Afterrmarket automotive part growth graph.Steady Growth

      According to the BB&T Capital Markets Automotive Aftermarket Investment Banking Group, which provides mergers-and-acquisition and capital-raising services to leading middle-market companies and private equity groups, the market for aftermarket automotive parts is growing steadily. As of 2011, total consumer spending on aftermarket auto parts had enjoyed a 10-year compound annual growth rate of more than three percent and is projected to continue to grow steadily through at least 2014.

      VIDEO: Outlook for Automotive Aftermarket - BB&T

    • Older Vehicles

      The average age of vehicles on the road has increased by more than twenty percent in the past ten years, which means more parts are being replaced on a daily basis. Average age of passenger car graph.According to the Automotive Aftermarket Industry Association (AAIA), Americans are holding on to their vehicles longer now more than ever before—a very strong indicator for the American aftermarket. For the first time, in 2011 the average age of passenger cars reached eleven years. Instead of buying new cars, consumers are repairing older vehicles, leading to a greater percentage of vehicles that are within the aftermarket age “sweet spot.”
    • Shift Away from New Car Dealers and Original Equipment Parts

      According to the AAIA, new car dealers have been losing their share of aftermarket parts for more than a decade. Aftermarket distributors have seen their opportunity grow because aftermarket parts’ quality is increasingly comparable with that of original equipment parts sold by new car dealers, while the cost is significantly less. This provides ongoing new opportunity for aftermarket distributors such as franchisees of 1-800-Radiator & A.C..