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‘Expresso’ Your Company’s Support For The Aftermarket
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By Counterman
link hidden, please login to view, we took an in-depth look at the Consumer Price Index (CPI) and the average vehicle age, highlighting their significant roles in shaping the automotive aftermarket. At the time of publication, we hinted at further exploration into other critical factors that influence our industry, and today, I’ll fulfill that promise by examining gas prices and vehicle miles traveled (VMT), two indicators that give a snapshot of the economy and provide professionals a means to predict the future of the aftermarket landscape.
First, let’s look at everyone’s favorite expense: gas prices.
The fluctuations in gasoline prices in the United States are more than mere figures at the fuel pump; they serve as barometers for a variety of factors, including economic health, geopolitical tensions, consumer confidence and the vitality of the automotive aftermarket sector. Gasoline stands as a relatively inelastic commodity, with demand showing little sensitivity to price changes. This is largely because a significant portion of vehicle use, estimated at about 30% for commuting purposes alone, is essential and non-negotiable for many individuals, according to a University of Michigan study. When considering additional driving for school-related activities, errands and other purposes, visits to the gas station are an inevitable aspect of daily life.
This inelastic nature of gasoline consumption implies that rising fuel prices compress consumer spending power and escalate operational costs for businesses reliant on transportation. Consequently, there’s a logical link between fuel costs and mileage traveled, especially for discretionary travel. Recent studies, including research by AAA, reinforce this connection, suggesting that as gas prices climb, individuals adjust their travel and lifestyle accordingly.
AAA released an article in July 2022 summarizing the aforementioned research that they conducted. The article showed that 64% of U.S. adults made changes to their driving habits and/or lifestyle since March 2022, at a time when gas prices were hovering around $4.30 and peaking at $5.03 in June 2022, with 23% of consumers making major changes. As illustrated in the article, of the 64% who reported they were making changes in their driving and lifestyle, 88% said they would drive less, 74% said they would try to combine errands, 56% said they would reduce shopping or dining out, and 30% reported they will delay major purchases.
Putting these sentiments into the context of the automotive aftermarket, less driving will put fewer miles on vehicles, leading to extended periods in between the 3,000-5,000 mile oil changes, roughly 6,000-mile alignments and factory scheduled maintenance around the 30,0000-, 50,000-, and 90,000-mile marks. Additionally, if people have less disposable income, they may put off repairs or standard maintenance like an oil change, further increasing the interval of vehicle maintenance.
However, while less driving may lead to extended periods between routine maintenance tasks such as oil changes, alignments and factory scheduled services initially, this shift in consumer behavior presents a silver lining for the automotive aftermarket. With people potentially delaying maintenance due to reduced disposable income, it stands to reason, vehicles are likely to be held onto for longer periods. This not only increases the likelihood of maintenance and repairs in the long term, but also signals a decrease in the purchase of new vehicles. As a result, the market could see an uptick in older, used vehicles that require more frequent servicing and do not receive warranty services (in other words, an increase in the use of vehicles within the aftermarket sweet spot). This scenario underscores the importance of the automotive aftermarket in supporting vehicle longevity and reliability, highlighting a potentially robust market for service shops and parts suppliers alike.
However, despite the intuitive connections and survey research, some reports, such as one from TIME, paint a different picture. Research analyzing fuel prices and American driving habits from 2000 to 2022 indicates that by June 24, 2022, U.S. gasoline consumption was nearly 8.93 million barrels per day, slightly below the 9 million daily average since 2000, showing a minor 1% drop. Conversely, gas prices soared to 90% above their average for that period.
The results of the TIME analysis will be partially corroborated by some of the charts presented in this article, but it is important to understand that the data presented for miles driven is in millions, so even small spikes on a chart will represent rather larger scaled changes.
To begin our deep dive, we start with Chart 1, which sources data from the U.S. Energy Information Administration and reveals the trajectory of retail gasoline prices across several years, displaying a pattern of highs and lows that correspond with a multitude of external factors.
link hidden, please login to viewChart 1 As we observe the trend line from January 2014 to January 2024, we see a gradual increase with significant peaks and troughs. The trendline suggests a weak upward trend with considerable volatility, which can be attributed to a range of influences, from geopolitical events, supply disruptions, technological advancements and shifts in consumer behavior. While Chart 1 showing a decade of gas price fluctuations may not explicitly outline the impact on the automotive aftermarket as far as time is concerned (meaning that we can’t accurately predict the price of gas in a few years with time alone), the implications are significant. Higher gas prices can lead to increased demand for fuel-efficient aftermarket products or vehicles, as consumers look to optimize their vehicle’s performance.
Conversely, lower gas prices can result in more disposable income to pursue vehicle repairs or perhaps drive more in general, which will inevitably lead to a greater need for repairs and vehicle upkeep (more on that to come). Ultimately, whether gas prices rise or fall, the aftermarket can benefit from the resulting changes in consumer behavior, as vehicle owners seek to manage their operating costs or take advantage of economic conditions to use their vehicles more.
VMT: A Reflection of Changing Times
As previously stated, VMT can have a significant impact on the health of the automotive industry and the aftermarket. So, let’s jump into Chart 2, which showcases VMT data over the last 10 years, according to the Federal Reserve Economic Data (FRED).
This chart traces the VMT from January 2014 to October 2023, offering a graphical story of the nation’s driving habits.
link hidden, please login to viewChart 2 The data shows that simply counting on an increase in driving over time won’t work for predicting aftermarket service demand. Instead, aftermarket businesses should focus on the specific factors that influence driving habits, like economic trends such as inflation and cultural/societal trends such as remote work policies. This understanding is crucial for aftermarket businesses to effectively manage inventory, plan marketing and schedule services. Recognizing that vehicle use can vary widely, rather than following a steady climb, allows aftermarket companies to be more agile and meet their customers’ needs in real time.
Is There a Correlation Between Gas Prices and Vehicle Miles Driven?
Various reports and studies have highlighted a discernible link between gasoline prices and the distance traveled by drivers. However, a broader analysis of economic data reveals a more complex scenario. Despite the intuitive connection between fuel costs and driving behavior, the practical demands of daily life in America—such as commuting to work, school and other essential activities—often render the inclination to reduce driving due to higher gas prices moot. (See Chart 3 which integrates information from the preceding two charts.)
link hidden, please login to viewChart 3 While there’s a connection between gas prices and VMT, it’s relatively weak as indicated by the low correlation coefficient and the even smaller predictive regression score not presented, indicating the presence of other influential factors. For accurate market predictions, we must consider additional variables like geopolitical issues affecting oil supply, policy changes and shifts in oil demand, which can abruptly alter gas prices.
Similarly, VMT is influenced by factors such as public transportation availability, urban versus rural living patterns and societal shifts toward remote work or “walkable” cities. Changes in consumer preferences, such as a growing interest in environmentally friendly transportation options or online shopping, can also play a crucial role.
Therefore, automotive aftermarket professionals should consider integrating advanced analytics and diverse data sources into their decision-making processes. This could involve investing in resources that help analyze social, economic and political trends, alongside traditional market data. Engaging with experts in related fields, from energy economics to urban planning, can also enrich their strategic outlook. In summary, a proactive understanding of the diverse drivers behind market changes is essential to navigate the industry’s complexities, capitalize on opportunities and ensure lasting success in a constantly evolving market.
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By NAPA
When it comes to working in the shop, personal safety should always be the top priority. Safety glasses, gloves, hearing protection, even work boots are all meant to keep your body protected. It should come as no surprise that with new hybrid and electric drivetrains, there are also new safety gear requirements. Insulated tools are just the start of a well-stocked shop. There’s more to electrical safety than just owning a set of
link hidden, please login to view. This expert advice is meant to give an overview of the kinds of general
link hidden, please login to view (PPE) needed to service hybrid and electric vehicles. It is important to follow proper repair procedures for these vehicles, as described in the vehicle specific repair manual. This includes using all required PPE listed in the repair procedure with no exceptions. If you do not have ALL of the necessary PPE, DO NOT proceed with a repair, as doing so could lead to severe injury or even death. Now that you have an idea of the serious nature of vehicle high-voltage electrical systems, let’s take a look at how you can protect yourself. Personal Protection
Wearing the right personal protection gear is a must when working with electric and hybrid vehicle high-voltage systems. The electrical energy stored in a typical main traction battery pack is more than enough to kill or seriously injure a person.
In the past, wearing gloves while working on a car was usually a personal preference. Today, when working on high-voltage electrical systems, wearing gloves is mandatory. And not just one pair of gloves, but two pairs (inner and outer) are to be worn together. Just in case you are wondering, welding gloves are NOT the same as high-voltage
link hidden, please login to view. Class 0 gloves are required for protection up to 1,000 volts AC and 1,500 volts DC. One pair of rubber gloves (inner) protects against electric shock, while the leather gloves (outer) protect the rubber gloves from mechanical wear. They must be worn together in order to perform correctly. Electrical gloves
link hidden, please login to view every six months to ensure they are still capable of insulating the user from the rated voltage. Gloves will be labeled with the test date near the cuff. The exact personal protection gear needed for a repair will be spelled out in the vehicle service repair manual procedures. This may include an insulated apron,
link hidden, please login to view, insulated arm sleeves, link hidden, please login to view, arc flash face shield with neck protection, and insulated mats or blankets. These layers of protection are necessary not just for avoiding shocks, but also potential explosions like an arc flash. Tool Safety
It may seem odd to consider hand tools as part of personal protection equipment, but that is exactly the case when working with electricity. Most ordinary hand tools are made from metal, which does an excellent job conducting electricity. For servicing high-voltage electrical systems tools need to be designed in such a way that they don’t provide a path for electricity to travel to the technician, or to other vehicle components. That’s why EV tools are specially designed to protect the technician when used properly.
An EV tool set is a must-have for any technician looking to service an electric vehicle. A good start for insulated hand tools is an insulated screwdriver set, an
link hidden, please login to view and an link hidden, please login to view. Electric vehicle tools used for diagnostics need to handle higher voltages, like this link hidden, please login to view. For repairs where the battery pack must be removed, special care must be taken due the extreme weight involved. A link hidden, please login to view is the proper way to lower and transport a hybrid or electric vehicle battery pack. You wouldn’t pull an engine out of a car without the proper lifting equipment, so give the same respect to a heavy traction battery pack. Work Space Safety
Normally, when a car is being worked on in a service bay, there is little danger to fellow technicians. But that isn’t the case with a modern electric or hybrid vehicle. Whenever the high-voltage electrical system on one of these vehicles is exposed, proper notification must be given to those working in the area. Place
link hidden, please login to view and link hidden, please login to view around the vehicle whenever the high voltage electrical system is being serviced. This warns other technicians that there is an electrical shock hazard in the shop, and to keep their distance. You may also place an electrical warning sign on the vehicle to signal to everyone in the shop to stay away. Part of your workspace safety gear must be an
link hidden, please login to view. If a technician suffers an electrical accident while working on a vehicle, anyone attempting to help them is also in danger of electric shock. An insulated safety hook must be used to separate the victim from the electrical source. The last tip for work space safety is to never work on an electric or hybrid vehicle alone. Always let another technician or coworker know you are working on a high-voltage electrical system, and to check in on you periodically. Training Is The Key To Safety
Working on hybrid and electric vehicle high voltage systems requires meticulous procedures and extensive training. While there are plenty of dangers when working on internal combustion vehicles, many of the safety procedures surrounding those vehicles have been known for decades. As EV and hybrid drivetrain become more mainstream, so will their service safety procedures.
Tackling hybrid and electric vehicle high-voltage system repairs isn’t impossible, but there must be dedication to proper training. If you are a technician (or are wanting to become a technician), and are looking for electric vehicle service training,
link hidden, please login to view can help. NAPA Auto Tech offers a wide variety of convenient, cost-effective ways to become an automotive professional. In addition to eLearning and instructor-led training, NAPA Auto Tech offers hands-on and seminar-style classes for almost every make and model to help technicians keep their skills up to date. Photos courtesy of Brian Medford.
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