MEMA & Auto Care Association Release 2024 Automotive Aftermarket Joint Forecast Model

Despite inflation, rising wages & a strong labor market continue to drive spending...

The Auto Care Association, in collaboration with MEMA Aftermarket Suppliers, announces the 2024 Joint Forecast Model, offering a 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.

MEMA & Auto Care Association Release 2024 Automotive Aftermarket Joint Forecast Model | THE SHOP

The forecast model provides an examination of the automotive aftermarket landscape, offering insights into key influences and market trends shaping the industry’s changing size.

The Joint Forecast Model sheds light on the U.S. aftermarket in 2023 and provides 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.

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

  • Labor Market Dynamics: Rising wages and a strong labor market are driving consumer spending, despite inflation.
  • Inflation Outlook: Much of the growth is attributed to the industry’s ability to charge more 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.
  • Vehicle Sales and Fleet Growth: Despite fluctuations, new vehicle sales are projected to stabilize.
  • E-commerce Growth: E-commerce purchases of DIY parts continue to rise, reflecting shifting consumer preferences.

The story in 2023 was not dramatically different than in 2022. Inflation remained stubbornly high despite retreating gas prices, but a resilient consumer kept driving and spending across the economy, including on their vehicle. Elevated inflation remains a roadblock to potential federal rate cuts, but the labor market remains strong and wages continue to rise. 

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 insight 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 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 data reveals promising growth for our industry, showcasing resilience in the face of challenges,” said Bill Hanvey, president and CEO, Auto Care Association. “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.

Pat Curtin

Pat Curtin is the managing editor of THE SHOP magazine.

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