Total light duty aftermarket sales will grow from $281 billion in 2020 to $314 billion in 2021, according to “The 2020 Joint Channel Forecast Model” produced jointly by the Auto Care Association and the Automotive Aftermarket Suppliers Association (AASA).

In 2020, total U.S. automotive aftermarket sales are forecast to decrease 8.8 percent as a result of the impact of the COVID-19 pandemic and related factors, according to the model.

“Despite the ongoing COVID-19 pandemic, the Joint Channel Forecast shows that the continued strength and resilience of the automotive aftermarket will lead to a brighter 2021,” said Paul McCarthy, AASA president & COO. “Despite a year of immense challenges and uncertainty, the foundation of our industry's key drivers remains strong.”

Group 1 Automotive, Inc. reported that due to the unprecedented business impact of the COVID-19 virus, Group 1 is implementing a variety of actions to address the sudden reduction in sales and service volume.

“The sudden impact of this medical and human emergency is clearly disrupting most businesses,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “This is requiring us to take many severe and regrettable actions to re-size our business to minimal activity levels in the near term.”

Virtually all of Group 1’s U.S. dealerships are located in markets operating in some type of “shelter in place” or restricted travel environments in accordance with applicable state and local orders. Dealership service facilities remain open to provide essential services to customers. No Group 1 U.S. dealership is completely closed. Overall, service activity levels have decreased due to the reduced number of vehicles on the road caused by government restrictions, or our customers’ concerns related to the virus.

While dealership sales departments have closed in some jurisdictions, in most cases, they are permitted to continue to operate, though with a dramatically reduced staff level.

The National Independent Automobile Dealers Association is calling on the White House to include auto sales as an essential service.

In a letter to President Trump sent this week, NIADA CEO Steve Jordan requested clarification from the Administration that automobile sales and leasing at independent automobile dealerships are essential services permissible during the COVID-19 pandemic, and asked that the recent guidance document on the essential critical infrastructure workforce issued by the Department of Homeland Security and the Cybersecurity and Infrastructure Security Agency be amended to include vehicle sales and leasing as essential services.

In the letter, Jordan said it is not only critical to safeguard the businesses and services identified as essential, it is equally important to safeguard businesses that enable essential services to continue uninterrupted – including auto maintenance and repair facilities, which were included in the CISA document.

But motor vehicle sales are also essential, Jordan said, noting, “Whether in times of crisis or not, repairing a vehicle may not be a viable option. The vehicle may be declared a total loss, parts may not be available, the vehicle may simply be worn out or it may not be economically feasible to repair it.

“In these instances, the American consumer may have an immediate need to replace the vehicle. Stated differently, the only repair might be a different vehicle” and consumers “will need the sales and leasing (and perhaps financing) services an independent dealer can provide.”

NIADA will continue to encourage all independent dealers to place the safety of their customers and employees first.

 

Watch Automotive Industry News Covid-19 update below.

Kerrigan Advisors, a sell-side advisory firm to auto dealers in the U.S., represented and advised Fields Automotive Group of Chicago, Ill., on the recent sale of Fields Volvo Cars and Fields Volkswagen of Daytona Beach to Gunther Motor Company of Delray, Fla.

The transaction marks the 88th and 89th dealership sale that Kerrigan Advisors has represented since 2015. The Fields sale brings the total number of dealerships sold by Kerrigan Advisors in the last 12 months to 13 dealerships. 

 

The 2019 auto dealership buy/sell market picked up speed during the third quarter and is now poised to register another 200-plus transaction year in 2019 – meeting or exceeding 2018 activity levels with over 160 completed transactions at the end of the quarter. According to the just-released Third Quarter 2019 Blue Sky Report by Kerrigan Advisors, the growth in the buy/sell market is supported by a healthy U.S. economy, led by consumer spending and spurred by a reduction in the federal funds rate by a quarter percentage point – the third such rate reduction since July. And fueling the strength of the buy/sell market is strong dealership earnings growth, largely driven by used vehicles and fixed operations.

“The industry’s ability to grow earnings despite flat new vehicle sales really shows the resilience of the dealer model,” said Erin Kerrigan, founder and managing director of Kerrigan Advisors. “That impresses investors and, with more sellers coming to market, buyers are here, seeking acquisitions and investment in auto retail.”

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