LAS VEGAS, Nev. – A lot has changed in the aftermarket industry, which inspired the tagline at the Heavy Duty Aftermarket Dialogue this week: It’s not your father’s aftermarket.
In a session to outline the industry’s perspective and outlook, Stu MacKay, president of MacKay & Company and John Blodgett, v.p. sales and marketing at MacKay & Company, discussed the changes in the aftermarket over 40 years.
“This truly is not your father’s aftermarket,” echoed MacKay. “Many of the processes we use, and the basic fundamentals are there, certainly cataloguing has changed, parts identification has changed, but the distribution system has gone through major consolidation both on the OE side, the dealer side and on the independent distribution side. There’s much more technology and it’s much more complex. What we want to focus on is how many vehicles are out there? Because that’s what drives the aftermarket today.”
He went on to say that the medium-duty market has not grown in 40 years.
“All the growth has been on the Class 8 side,” he said. “The Class 8 universe has more than tripled since 1974 – we’ve gone from under a million to nearly three million.”
The other two major changes MacKay noted were the decline of owner/operators in the market (in 1974 they comprised 10% of the operating universe and today it’s at 6%) and the shift away from companies being heavily dependant on outside engine suppliers.
“It’s becoming increasingly challenging for a lot of businesses to define themselves as owner/operators and survive in the trucking environment that we have in 2014 and 2015,” he said. “And another major change we’ve seen in the last couple of decades is what’s happened in the Class 8 engine business. If you look at 1986 as an example, aside from Mack, which has been for decades all Mack engines and chassis, almost everybody else was heavily dependant on outside engine suppliers, like Cummins, Caterpillar and Detroit. When you compare that with the most recent 12 months, it’s a totally different picture. Today, it’s either captive or it’s Cummins. The point is the trend is significant. We’ve moved significantly from independent engine supply…to much more heavily captive componentry.”
To speak more about the outlook of the industry was Blodgett, who noted that 2014 and 2015 is in the “sweet spot” of the aftermarket time frame.
“The average age for Class 8 vehicles in the US is at a high point and that’s a positive for the aftermarket – older vehicles require more parts and service and it helps with the aftermarket,” he said.
He added that the sweet spot is for vehicles between the ages of seven to nine years, when vehicles have the highest parts consumption.
As far as the outlook, Blodgett said the US can look forward to fairly steady growth in the next five years. In 2019, research shows that the market demand will reach US$32.43 billion (up from 2014’s $26.19 billion).
He noted that Canada can expect some growth as well in the coming years.
“We do the same types of surveys in Canada with Canadian fleets,” he said. “The size of the aftermarket in Canada is just under $4 billion (CAD). And it doesn’t have as much growth, but there is to be a bit of growth there. We’re looking at about $4.3 billion in 2019.”
Sonia Straface is the associate editor of Truck News and Truck West magazines. She graduated from Ryerson University's journalism program in 2013 and enjoys writing about health and wellness and HR issues surrounding the transportation industry. Follow her on Twitter: @SoniaStraface. All posts by Sonia Straface