QREA Tenant Spotlight: Auto Parts Sector
Auto Parts Fast Facts
- 3-year sector growth projections indicate a +4.1% compounded annual growth rate:
- In 2020, the after markets sector declined by 7.3% to just $138B. As expected, the space was negatively affected by the pandemic. In 2019, the aftermarkets sector was valued at $149B in the U.S. alone. This implies a 3.5% annualized growth rate compared to the $134B recorded for 2016.
- The US market has seen reasonable growth over many years. Key drivers of current and future long-term demand in automotive aftermarkets includes number of vehicle miles driven, number of registered vehicles, new light vehicle registrations and the average age of vehicles/fleet. Miles driven and fleet age indicators have had favorable tailwinds (excepting for the recent short-term impact of Covid –19).
- Auto parts omni-channel sales continue to be of importance as Walmart loses its footing in the auto parts category to Amazon with a 6 percentage point loss of shares in the past year. The acceleration of internet retailers continues to fundamentally change how consumers plan shopping trips.