By Bill Hanvey, president and CEO, Auto Care Association
After over a year of not being able to be together, there really are no words to express how I feel about the prospect of AAPEX finally being our homecoming this November.
This is the year that challenged us. This is the year that changed us forever. But this is the year that we’ll always remember lessons of resilience and evolution that made us stronger.
We have continually been inspired by your businesses’ incredible capability to adapt and continue to provide essential products and services to all the people in your community, your country and worldwide – all while protecting your businesses, your families, your colleagues and yourselves. Empowered by your adaptability and resolve this year, your Associations have accelerated to create collaborative educational initiatives to keep you informed and help your businesses continue to shift, readjust and reconnect at this year’s AAPEX.
Leading Indicators for an Industry Recovery
We realize that industry uncertainties continue and recognize that disposable income is a possible leading indicator for automotive aftermarket retail sales in the context of the coronavirus relief stimulus.
As the vaccine rollout continues, we all look forward to resumption of activities: travel, socializing, in-person work and school, entertainment and so on. Another question being asked is whether the post-COVID world will see a surge in driving, activities and sales?
The CARES 2.0 Act contributed to the rise of U.S. disposable income to a record high of $1.6 trillion in January, an 11% increase from December. The chart below shows disposable income from January 2017 to December 2020:
The green arrow indicates the significant jump in disposal income from December 2020 to January 2021.
Will the extra “cash on hand” of the third relief bill lead to increased retail aftermarket revenue? History suggests “yes.” The chart below shows historical disposable income in orange and auto parts, accessories and tire stores retail sales in gray from January 2019 to January 2021:
The first green arrow points to an increase in disposable income from March to April 2020. One month later, aftermarket retail sales shot up. The second green arrow is the increase in disposable income from December 2020 to January 2021. We are continuing to monitor the aftermarket retail sales for Q1 2021 to validate this trend and believe that the infusion of cash will likely encourage some consumers to take care of necessary repairs and others to purchase accessories and maintenance-related products.
The takeaway? We must be prepared for fluctuations in driver behavior, driven by returning to work. We have to also be prepared by changes in ecommerce, fueled by a shift to digital and improvements throughout our supply chain logistics. And we have to be prepared for evolving needs of the customers – whether that’s relying on their vehicle more than ever before or needing an economical solution for vehicle maintenance and repair – the aftermarket will be there for them.
Driving Forward on Your Right to Repair
With the wild ride of 2020 in our rearview, we are also on the heels of a significant industry victory in Massachusetts – the passage of Right to Repair.
The voters – and your customers in every Massachusetts town – made it resoundingly clear at the ballot box that they trust you, value you and want to keep coming to you… and that you are essential to them.
And over the past year, you continued to prove in extraordinary new ways just how essential you really are (even the federal government deemed it official); not only to motorists, but to your communities and to one another across the globe.
Thousands of you collaborated across the globe to stay informed and moving forward through the past year’s challenges. You have continued to pivot and drive your business. And you have worked side-by-side (mostly virtually, but still…) with us to advocate for the good of the industry, making our united voice heard through thousands of legislative proposals to reinforce the essentiality of our industry during COVID-19.
But now there are new voices speaking up: the automakers, with lawsuits trying to override the will of American voters and deny you access to what the voters want you to have. We simply cannot let this happen to our customers, our businesses or our industry this year.
Looking back at what we did together as an industry in the unimaginable circumstances of 2020, we have proven to motorists, voters, the country and the world how strong we are together.
The reality now, though, is that we do not have time for a victory lap – we have to keep our foot on the gas on Right to Repair. While we fight the automakers’ objections and lawsuits, we will also be fighting for our lawmakers’ attention amidst the ongoing pandemic. That’s why we can’t slow down now. It is critical for the aftermarket to continue to be one strong, united and constant voice, directly telling lawmakers that we are all essential… and always will be.
Let’s build on the extraordinary momentum of Right to Repair and keep our essential industry accelerating into the future – together.
Filling Up the AAPEX Tank
AAPEX will be that place where we can finally, safely be together again and we’re working hard to ensure that we deliver on this experience that you’ve waited so long for. Show features and sessions will be announced in the months to come and we’re always open to hearing from you on what we can do to make this a more comfortable and beneficial return for you.
Just imagine: meeting face-to-face with all of your current partners and new suppliers, exploring the global marketplace of innovation, and obtaining hands-on training from elite technicians and trainers is just a few months away. Plus, we’re ramping up experiential learning in 2021, including more demos in the Tool & Equipment, and telematics and diagnostics sections, and presentations to gain insights on where the industry is headed. In addition, there are more areas focused on emerging technologies like robotics, and Repair Shop HQ featuring Joe’s Garage with fully equipped service bays, demos, and hands-on experiences.
AAPEX 2021 will be here before you know it, and we can’t wait to welcome you. Registration will open in May. If you’d like us to notify you when it’s open, please complete this short form. I look forward to celebrating our industry’s homecoming with you!!