Auto Care Association

Aftermarket business leaders more confident about business

Results of the joint Business Confidence Index for August 2012, show that aftermarket business leaders were roughly two times more confident in the future of the automotive aftermarket over the next 12 months, than they were regarding the economy in general, reports the Automotive Aftermarket Industry Association (AAIA) and Northwood University.

  • The overall AAIA/Northwood University Automotive Aftermarket Business Confidence Index for August was -13.24, down from the July reading of -2.22, placing aftermarket leaders on the high side of “slightly less confident” category.
  • The overall AAIA/Northwood University Automotive Aftermarket Economic Confidence Index for August improved slightly from a -37.78 in July to -26.47 in August, the fourth straight month of the index being negative since November 2011 which places aftermarket business leaders on the low side of “slightly less confident” in the economy as a whole in August.

“It is clear aftermarket leaders had less confidence in the industry in August compared to July of this year,” said Dr. Timothy Nash, Northwood University. “It is also obvious that business leaders were not confident regarding the overall economy in August. We believe a continued weak European economy, a slowing Chinese economy and an actual monthly decline in miles driven from June to July 2012 and a year ago, are the primary reasons for disappointing confidence among aftermarket leaders in their business. The historically higher than average gasoline prices are also placing a drag on the economy and the aftermarket at this time as well. The negative trend with regard to our national debt and that of Europe was worsened by challenging U.S. fundamentals in August with a lower than expected revised second quarter GDP report for August showing GDP growth of 1.3 percent down from the July report of 1.7 percent growth for the U.S. The most recent miles driven data shows a slight decrease in miles driven from June to July 2012 and it also shows a decline in miles driven in July 2011 relative to July 2012. A positive resolution to the ‘debt crisis’ discussions in Washington D.C. and around the globe, the adoption of a rational and predictable tax policy in the U.S. would help to offset high world oil prices and enhance aftermarket business confidence in the coming months (see Chart 1).”

The twenty-first installment of the survey will be sent to members today, Oct. 4, 2012. Results will be calculated monthly and reported in AAIA SmartBrief. Member responses will be used solely in the aggregate and for the purpose of providing empirical information.

For more information, contact AAIA market intelligence at 301-654-6664 or Dr. Timothy G. Nash, Northwood University at 989-837-4323. These indices are prepared monthly by Dr. Nash and Northwood University aftermarket major, Matt Fusco.