The automotive aftermarket industry has been facing strong headwinds in 2026 with tariffs, inflation and global conflicts driving up oil prices. According to SEMA’s recently released 2026 Future Trends and Industry Update report, however, the industry has been surprisingly resilient and remains cautiously optimistic.
THE SHOP recently sat down with the SEMA research team—including Gavin Knapp, director, market research; Matt Byun, research manager; and Matt Daigle, director of communications for public and government affairs—to discuss the report and dig down into some of the key takeaways.
A Mixed Bag – But Optimism Prevails
Looking back, sometimes it feels as if the world didn’t exist before COVID. When the lockdown occurred, the auto industry braced for the worst but instead got an unexpected boost. Knapp says that during COVID, people were spending more time working on their cars, so companies were doing well, but he attributes that to a pull-ahead effect. People who normally would have held off on purchases were spending their money in 2020 and 2021.
Over the past 12 months, however, sales across the automotive aftermarket have leveled out, and the SEMA report shows that there has been a relatively even distribution of companies that have done well, companies that have remained steady, and companies that have not had much success in the current economy.
“Let’s be honest, the last few years have been a mixed bag, whether you’re looking at the economy, the auto market or, for us, the specialty auto parts market where we really focus,” Knapp said. “As we surveyed companies in the industry, we found that, over the last year, there have been companies that have done really well and companies that have not done well. Kind of a mixed bag across the board. The good thing is, by and large, the overwhelming majority have a very positive view going forward.”
When asked why some companies are seeing success while others are struggling, Knapp added, “I wish there was a specific answer, because we’re seeing this kind of dichotomous effect—some companies are doing the same things but having different results.”
According to the report, companies are feeling optimistic about the future of the industry even though confidence in the overall U.S. economy is down. The report states, “Sales of specialty-equipment parts continued to grow at a slow but expected pace of 1%, up to $52.65 billion through 2024.” The consensus, however, is that the market is expected to return to its historical 3%–4% growth rate within the next two to three years, even in the face of current global headwinds.
“Part of it is because, frankly, we have a good story to tell,” Knapp continued. “The reality is, we have a base of customers that are always going to buy from us. This is their thing, and they’re going to continue to do it. That’s not our whole market—that’s our base. When you look around, people like to personalize. Everybody has one of these phones in their pocket. None of them are plain—you put a cool case on it, maybe stickers or some other accessory. We like to personalize. We like to have things our way that kind of reflect us, and that’s what our industry does for your vehicle.”
Tariffs & the Supply Chain Pivot
When tariffs began to create uncertainty and fear in the market, companies across the automotive aftermarket immediately became proactive.
“Earlier in the year, when the tariffs were happening, a lot of distributors and retailers were trying to decrease their inventory,” said Byun. “Essentially, they had a ton of inventory they couldn’t keep if things were going to get worse, so they had to try and cut that down, either by selling off stock or not bringing in as much new inventory.”
The SEMA survey also shows that nearly 30% of manufacturers are shifting toward domestic suppliers to battle tariffs. Another third is diversifying both domestically and internationally to better manage their supply. Shipping costs as well as shipping delays have also become a major issue over the past five years. By switching to domestic suppliers, companies can better manage their inventory and reduce shipping difficulties.
“The tariff rates are the highest we’ve seen in about 80 years. Those kinds of things are affecting shipping rates and quite a bit of other things as well,” Knapp added.
Unfortunately, companies and shops have largely had to pass those costs along to their customers. SEMA says that even with rising prices, companies have been able to maintain their customer base.
“The good thing is, consumers have still been spending,” Knapp said. “We keep hearing about prices going up, and there’s probably still some price inflation within our market to come, but consumers have been pretty good. We’re very much a discretionary spend market, so we need people to want to spend money with us. The good thing is, we have a pretty good product to sell. That keeps people coming back.”
The Vehicle Fleet Is Aging & That’s Good News
With 15 million new vehicles hitting the road each year, versus 12 million vehicles being scrapped, that equals an annual net growth of 3 million vehicles. In addition, the average age of vehicles has risen to 12.8 years. A growing fleet of older vehicles creates more opportunities for restyling and performance shops.
“The more vehicles on the road for us is always better. There’s sort of that two-tiered approach of, ‘I bought a new car and now I want to fix it up,’ versus, ‘Hey, maybe I can’t or don’t want to buy a new car, but I want to refresh it,’” said Knapp. “When somebody buys a vehicle, whether it’s a new or used vehicle, it’s new to them—for us, that’s a trigger point. ‘Now that I’ve got this canvas, I need to make it mine.’”
Knapp adds that most people aren’t aware that 40 to 50 million used vehicles are sold every year. When someone buys a used car, they often want to make it their own, whether that’s through restyling, performance upgrades or handling improvements. When asked how shops can deal with such a wide range of vehicles spanning multiple decades of makes and models, Knapp said that successful businesses know what they’re good at and know what they want to specialize in.
“That helps them stock the inventory they actually need,” he commented. “It also helps them—especially when you’re talking about specialized products and specialized vehicles—to develop supply chains with companies that have more specialized stock, rather than going through just your traditional suppliers.”
CUVs Surge While EV Growth Stalls
One fact that jumps out of the SEMA report is that over the past 10 years, CUVs have become the dominant vehicle on the road. In 2015, traditional coupes and sedans led all segments at 42%, while CUVs made up just 12%. In 2025, CUVs jumped to 27%, and traditional cars dropped to 27%, beating pickup trucks by 6%. Here’s a full breakdown of vehicles in operation in Q4 2025 according to the report:
- Sports Car: 3%
- Van: 5%
- Alt Power: 6%
- SUV: 11%
- Pickup: 21%
- Traditional Car: 27%
- CUV: 27%
But even with such impressive growth, CUVs are still underserved in the automotive aftermarket. Part of the issue is the number of different models. With over 100 CUV models, many of them are low-volume production, so it’s hard to justify tooling-up for fitments or creating products.
“If you’re a company that lives in a high-volume space versus a more specialized space, you may look at different [CUV] models to tool-up for. I think that’s part of the issue right now—our industry is trying to figure out where within that space the pockets are that they can really attack,” Knapp said.
There’s also an identity crisis with CUVs. Did owners purchase them for utility, or simply as a roomier car? SEMA believes the identity of CUVs is coming more into focus, and OEMs are helping.
“One thing I like to say is: look at any TV commercial from an OEM plugging their CUV—they will take it on a dirt road, show off its utility capacity, put racks on it, put a kayak on the top, etc. They really are trying to help us out,” Knapp commented.
In the meantime, EV sales have cooled considerably since the federal EV tax credits expired. Knapp says that he has always held a more moderate view of EV growth compared to many sales projections from the past few years.
“The reality is that EVs aren’t going away,” Knapp noted. “They’re still here in the market, they’re going to continue to be in the market and they’re going to continue to grow—but it’s not going to be the exponential growth that some people had forecast. It just isn’t reasonable to think that’s the case.”
According to the Future Trends report, the EV market is not growing exponentially as some might have expected. In fact, many OEMs are shifting production back to ICE and hybrids. Fully electric vehicles are projected to grow at a slow, steady rate over the next few years, and Knapp points out that the report forecasts internal combustion engine (ICE) models to remain dominant for decades. But Knapp was also quick to note that shops serving both ICE and EVs are futureproofing their business.
“Electrified vehicles are here, and there’s no reason they can’t be a part of our market,” Knapp said. “We already have a lot of companies pushing products specifically for EV and hybrid vehicles. If you’re looking at an EV, certainly you’re not doing a lot of the engine mods you would on other vehicles, but you still have four wheels and suspension and all the body, lighting, etc. There’s a whole world of accessorization and customization to be done to those vehicles, even if the powertrain mods are totally different.”
What’s Coming Next From SEMA Research
The Future Trends report is only the first of several reports published annually by SEMA. Up next is the SEMA Market Report, which the research team says is only weeks away. The Market Report explores data on the market size and scope of the automotive specialty equipment industry.
“We also do periodic data research check-ins on some things,” Daigle added. “We’ve got a tool that allows us to measure public sentiment and opinion in areas we’re tracking. So occasionally, Gavin pulls those together, and the research team puts out something with those kinds of data points—they’re always pretty interesting.”
Shops and industry professionals can download the full SEMA Future Trends and Industry Update at sites.sema.org/market-research. Current SEMA members have free access to the report, while nonmembers may purchase it.