Aftermarket sector in demand

AUSTRALIA’S automotive servicing, maintenance and accessories sectors are growing steadily despite the downturn in new-vehicle sales and cessation of vehicle manufacturing in this country.

Speaking to GoAuto in the lead up to the 2019 Australian Automotive Aftermarket (AAA) Expo to be held at the Melbourne Convention and Exhibition Centre (MCEC) from April 4 to 6, AAA Association chief executive Stuart Charity said the ever-increasing number of vehicles on the road helps keep the industries involved in their upkeep busier than ever before.

The fact that owners might choose to delay new-vehicle purchases also plays into the hands of certain parts of the aftermarket sector.

“It’s an interesting one, because the dropping of new-vehicle sales in the short term doesn’t impact significantly on the automotive aftermarket,” he said.

“That’s because the reality is that the (new-car) dealerships tend to get the lion’s share of the newer vehicles that are in warranty, and then the aftermarket gets them after three or four years once they come out of warranty. And, with second owners, people look around for choice, so there’s a time lag on the impact. So, we’re certainly not seeing it in our volumes.

“The other thing is that, if people aren’t buying new cars, logically they’re hanging on to them, which means that they’re almost always getting serviced in the aftermarket because we’ve got the lion’s share of those post-warranty vehicles.

“So, if anything, business is pretty good – the volumes are good, and the overall vehicle numbers on Australian roads is increasing by two per cent per annum.”

Mr Charity also challenged the perception that the local new-vehicle parts and accessories supplier industry would wither in the aftermath of the end of vehicle manufacturing in Australia, revealing that the majority are in fact surviving and growing with the help of overseas orders.

“The manufacturing side of our industry is also going well,” he said.

“There were a lot of predictions about when the car industry would stop manufacturing vehicles in Australia that it would be the death knell for automotive manufacturers, but that hasn’t been the case. Some 80 per cent of original equipment tier one and two suppliers are still operating, and pure aftermarket companies are actually expanding.

“We’ve just done a manufacturers’ survey and about 250 companies that are members of our association and manufacture in Australia, 78 per cent of them export and 88 per cent are expecting growth over the next three years, with only three per cent expecting a reduction in export volume.

“Our show is a barometer for the industry, and given we can sell out a show of that size, I think that shows we are going okay.”

Running from Thursday to Saturday, the biennial AAAE is now Australia’s largest automotive industry event representing the auto aftermarket industry that contributes $11 billion to the economy annually and $1 billion in exports per year.

More than 400 exhibitors will show their wares over the three-day period, also making it one of the biggest and fullest to be held at the MCEC this year.

According to Mr Charity, though it is a trade-only expo, it will certainly serve as an eye-opener, even for people associated with the various related sectors.

“It will say that the industry is going along pretty well,” he said. “A lot of people outside of the industry and general population don’t understand how big and comprehensive the automotive aftermarket is. Our members do a remarkable job putting their best foot forward every two years.

“The final number is 430 exhibitors, with 350 of them in the auto aftermarket expo and there’s another 80 in the collision repair (as part of the associated 2019 Collision Repair Expo).

“Plus, we’ve ended up with a 98 per cent sale rate (of the available floor space), which is pretty remarkable given there’s 21,000 square metres or five acres to fill, so it’s as close to a sell-out as you can get.”

One of the drawcards at this year’s expo will be displays and demonstrations pointing to the future of the automotive aftermarket industry, with big international names like Bosch and Ryco putting on demonstrations to that effect, according to Mr Charity.

“Among the highlights include Bosch talking about vehicle technology and where that’s going, both from a vehicle and workshop perspective,” he said.

“We also have the executive general manager of Ryco talking about innovation and the need to bring innovation to business no matter what the size.

“And then our government relations manager and a Bosch spokesman will be talking about data, (including pertaining to) the vehicle manufacturer repair and service information area, and what is going to be shared, how it will be shared and when, with practical demonstrations of parts-through technology, which is the next evolution of how technicians will access repairing service data and fault codes and other things.”

Mr Charity added that more details surrounding the Automotive Innovations Centre announced late last year will be revealed at the show, underlining the growth the industry is experiencing moving forward.

“We’ve secured funding for an automotive innovations centre, to be set up in Melbourne later this year, where we supply all the latest tools and equipment and technology and expertise, to help our industry take it to the next level in terms of product development for domestic and overseas markets,” he revealed.

“We’re unveiling the new grant of that at 12pm on Thursday, April 4, with a capability demonstration at the expo on our stand, including 3D printing, 3D scanning, recalibration of advanced driver-assist systems, working with suspension suppliers on validation of electronic stability controls and all sorts of related things.”

Entry into the AAAE is free to all members of the automotive trade. More information about the seminar topics and pre-register to attend online can be found at www.autoaftermarketexpo.com.au or www.collisionrepair.com.au.