Aftermarket outlook

 

Who wouldn’t like to know what the future will bring? Armed with such knowledge we could better prepare for what is to come.

Thus far, however, no one has been able to reliably peer into the future.

As Niels Bohr, a Danish physicist who made foundational contributions to understanding atomic structure and quantum mechanics, observed: Prediction is very difficult, especially if it's about the future.

Nevertheless, businesses gather information, track trends and make forecasts, analyze all this and then make a “best bet” outlook.

As part of this Heavy Duty Aftermarket Dialogue (HDAD), which took place in Las Vegas in mid-January prior to this year’s Heavy Duty Aftermarket Week (HDAW), there was a session entitled, The Heavy Duty Aftermarket Outlook: Opportunities and Challenges. It was presented by Stu MacKay of MacKay & Company, a specialized management consulting and market research firm focused on commercial on-highway vehicles, construction equipment, farm field machinery and related components such as engines and transmissions.

HDAD is one of three conferences in the Heavy Duty Dialogue Series jointly presented by the Heavy Duty Manufacturers Association (HDMA). HDAW is the largest North American gathering of the independent heavy duty industry.

Along with talking about the domestic national gross product, employment, trucking activity, commercial vehicle sales and parts sales, MacKay ventured a look into the future of the aftermarket.

He said he was “not bullish” for the short-term - the next 12 to 18 months - mostly because of the disorder in Washington, DC. Longer term, though, he is more positive.

The aftermarket is a $22 billion opportunity, he told session attendees. The market is cycle-resistant and will continue to grow. So, too, will consolidation, but that will result in a stronger customer base and a stronger distribution network.

Further, be believes remanufacturing and rebuilding will grow “where appropriate” as truck operators continue to look for ways to cut operational costs. By way of example, he noted that Schneider National, a premier provider of truckload, logistics and intermodal services, is in the process of glider kitting some 650 of its tractors.

On the downside, MacKay anticipates that the truck universe growth will be slower and product improvements will continue. As a consequence, aftermarket growth will be slower.

Circling back to consolidation among aftermarket customers and distributors, he said the stronger customer base and distribution network may result in it being more difficult to deal with customers and distributors.

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