Market For Auto Service, Repair, Upgrades Is Steady

The Specialty Equipment Market Association (SEMA)'s yearly Las Vegas hoedown is on the horizon. And if Chicago consultancy Mintel is correct, there won't be many hangdog expressions on display. Because while car sales may be in the tank, the market for car service, repair and upgrades is holding its own.

By Mintel's estimates, the automobile aftermarket reached $106.5 billion in 2007, an 18% increase from around $90.1 billion in 2002. The firm concedes that 2009 will be slower, but predicts that recovery will still be quicker than the new car market, with speed picking up again late next year and sales surpassing $120 billion by 2012.

Mark Guarino, senior analyst at Mintel, says a rebound in the segment will be slow, but "people aren't buying new cars, and when they are, they are different, more sophisticated vehicles than they had before," he says--adding that there's a significant market for after-market gadgets, particularly in entertainment and telematics.

"They are buying smaller cars, but at same time, when they buy smaller cars they still want to have the bells and whistles they are used to in SUVs. 'I miss my DVD player, a better stereo, a GPS, Blue-tooth.' The after-market is affected by that."



The firm says the median age of cars grew from 8.1 years in 2001 to 9.2 years in 2007. The firm also says the technical sophistication of new cars is limiting the do-it-yourself (DIY) market. "Increasingly, computerized vehicles are making more people turn to professionals for service," says Guarino.

He says the firm garners data from Simmons and online data culled from Greenfield. "Consumer data is pretty much a huge part of the reports that basically drive our research."

Ultimately, he says, the retail service and repair business will grow more quickly than DIY because of the complexity of technology. "Long-term, because cars are getting more complex, with so much technology going into after-market products, the service sector will matter more than DIY market."

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