AAPEX 2020 To Be Virtual Experience

LAS VEGAS, Nev. – Aug. 5, 2020 – AAPEX 2020, scheduled for Nov. 3-5, 2020 at the Sands Expo and Caesars Forum Conference Center in Las Vegas, will not be held as an in-person tradeshow event this year due to the current state of the COVID-19 pandemic and related governmental prohibitions and restrictions on gatherings, businesses, and travel. Instead, AAPEX will provide a virtual/digital experience with many of the show’s same elements presented digitally. Given the State of Nevada’s recently announced long-term mitigation strategy for the COVID-19 pandemic, which has indefinitely prohibited events with more than 50 participants, and the severe limitations on international and domestic travel imposed in connection with the pandemic, unfortunately, the traditional in-person event cannot proceed. Read FAQs »

By Mike Jackson, Executive Director, Strategy and Research, Original Equipment Suppliers Association (OESA)

The U.S. light vehicle sales outlook continues to benefit from a protracted economic expansion that has now stretched beyond 10 years. Looking back at 2018, though late in the cycle, the vehicle sales environment reflected surprising strength as U.S. sales posted a modest increase to 17.3 million units. The economy grew by 2.9% in 2018, helped in part due to the passage of tax reform, which supported a meaningful increase in commercial fleet sales due to an accelerated depreciation provision.

For 2019, the U.S. economy remains healthy, yet the pace of growth has slowed to 2.2% for the year. From a light vehicle sales perspective, the outlook reflects a taper, with sales declining 2.5% to 16.9 million units for a decline of nearly 430,000 units. Heading into 2020, further sales declines remain on tap, with U.S. auto sales slipping to 16.6 million units, according to the OESA affiliate forecast matrix.

Looking below the top line demand, consumer preferences have continued to favor light trucks, including SUVs, pickups and vans at the expense of declining passenger car sales. Sport utility demand has benefited from a number of factors, including: affordable fuel prices and improved fuel economy, in addition to product attributes such as greater vehicle functionality, higher ground clearance, improved road visibility and expanded consumer choice as well as a perceived prestige within the category.

This accelerated shift toward light trucks has ushered in a significant change in the industry but also a tremendous opportunity. The chart highlighting industry transaction prices shows that both passenger cars and sport utilities post a nearly $2,000 increase in average transaction price between 2010 and 2018. More importantly, SUVs have established and maintain a tremendous advantage in pricing power over passenger cars, holding a nearly $7,000 advantage in average transaction price over the 9-year horizon. As of 2018, light trucks accounted for more than 70% of U.S. light vehicle sales, opening a door to provide an expanded revenue stream of more profitable aftermarket parts and service opportunities.

When this trend is examined in light of average vehicle age, the story becomes even more compelling and uncovers a tremendous opportunity for aftermarket parts suppliers. Based on the latest IHS Markit data, average vehicle age in the United States rose to 11.8 years this year, up from 11.7 years in 2018. Utility vehicles on average last longer than passenger cars as their product specifications provide for a longer duty cycle. Moreover, consumers have a vested interest in maintaining the life of their vehicles for longer as a means to protect their higher value vis-a-vis passenger cars. The takeaway is that higher margin sport utility offerings last longer, providing an extended service and maintenance window for aftermarket parts suppliers, within a customer demographic that is willing and able to service their vehicles in order to extend their useful life.

When it comes to pickup trucks, this trend is even more exaggerated as this product category commands one of the highest pricing premiums in the industry. Yet again in the case of duty cycles these increasingly capable vehicles are engineered to withstand much more punishing use cases and moreover retain value over a much longer useful life than passenger cars on average. The fact is that pickups offer far more value than moving a person from point A to point B. Pickup truck buyers can be grouped into unique categories, including commercial buyers and lifestyle consumers. Commercial buyers see their vehicle as a tool that delivers a return on investment. Its value is inherent in its ability to tow or haul materials, gear and people on demand.

The outlook for aftermarket parts suppliers and service providers is especially positive as consumer preferences continue to favor pickups trucks, vans and SUVs. Regardless of the prospect of slower economic growth in the near-term, ownership patterns and extended product lifecycles offer aftermarket parts suppliers ample opportunity for success for years to come.

AAPEX 2019, co-owned by the Automotive Aftermarket Suppliers Association (AASA), MEMA’s light vehicle aftermarket division, and the Auto Care Association, will present impactful sessions, including “Aftermarket Outlook 2020” and “5 Trends in 5 Minutes,” and product demonstrations while featuring cutting edge product displays highlighting technology enhancements to capitalize on market trends to accelerate your success! We look forward to seeing you there!

To learn more and register for AAPEX, visit aapexshow.com/attendee.