Introduction to the Channel Forecast Model
R. L. Polk, now part of the automotive
group of IHS Markit, provides the Auto
Care Association with vehicle sales and
registrations (VIO data) each year. This
data is lagged by one year, but is not a
result of sampling. The data is broken into
10 vehicle classes and vintage.
IHS Markit data is a combination of
proprietary data and macroeconomic
data that are relevant to the automotive
aftermarket industry and includes unit
sales of cars and light trucks, a variety
of Consumer Price Index (CPI) indices,
retail sales for different automotive related
channels, etc. This data is used as the
initial demand driver within the model and
acts as the primary forecast drivers.
2018 U.S. Aftermarket Channel
Forecast Model Review and
Analysis of Trends Impacting
the Market
The IHS Markit U.S. Aftermarket Channel
Forecast Model was re-based in 2017
to incorporate the 2012 U.S. Economic
Census data. In the spring of 2018 IHS
Markit completed its annual review
and update of the model. This annual
review revisits the forecast for 2017 and
generates a new four-year forecast,
which now runs through 2021.
Last year’s forecast included an
expectation of 3.5 percent growth for 2017.
The current model shows a downward
revision for 2017 to 3.1 percent growth.
Many of the key drivers saw the final
results under-perform expectations, as
total vehicles sales declined more than
expected, nominal GDP growth was lower
than forecast and disposable income did
not rise as much as assumed. The final
result was that the total U.S. light vehicle
aftermarket sales for 2017 was $285.8
billion, which was just over a billion less
than the previous forecast. Background
This model is the outgrowth of an earlier project started some years ago by the Auto Care
Association Market Intelligence Committee. The project consultant is IHS Markit (which
includes the former Global Insight and Polk Automotive) who has been managing the
project since 2007. IHS Markit is considered a leader in economic and financial analysis,
forecasting, and market intelligence for more than 40 years (www.ihsmarkit.com).
The Channel Forecast Model is based on the results from the five year Economic
Census report (starting with 1997 and most recently 2012). The model uses that
baseline data to determine the present (nominal) dollar value of sales at end user prices
for each of the automotive aftermarket’s channels of distribution and presents a total of
the channel sales to provide a complete market overview.
The automotive aftermarket, as it is defined for this project, consists of all non-warranty,
retail sales of parts, accessories, and services for light vehicles. Included are retail sales
of paint, tools and equipment for repairs (including for collision repair), trim and interior
products, vehicle restorations, replacement glass and tires. The automotive segment
of the aftermarket includes the replacement parts, accessories, chemicals, tires and
non-warranty service for passenger cars and light trucks. The model accounts for the
potential double-counting of revenue by including only those sales that are classified as
sales made to the general public.
As of 2017, the model uses the 2012 Economic Census data as a base, the model:
Estimates values of Economic Census results for those historical years that are not
covered by the report, and
Forecast out, through 2020, the values of the census data.
Included in the estimated/forecasted values referenced above are a set of 41 motor
vehicle aftermarket’s channels of distribution agreed upon for use as the set of NAICS
subcategories. These 41 channels are all the categories from the Census that displayed
sales of relevant automotive product lines.
The three main sources of data used as inputs in the model are (1) U.S. Economic
Census data; (2) Industrial Marketing Research Inc. and (3) IHS Markit Inc. (for
economic data as well as industry data provided by its automotive group, which
includes the former R.L. Polk).
Baseline model data are the 1997, 2002, 2007 and 2012 Economic Census data. From
this baseline data, the remaining three sources are used as drivers for the model. The
Census survey provides information on sales by both product line and NAICS codes,
all of which are released every five years. Due to the volume of information collected,
it takes the Census Bureau approximately four years to release the data following
the reporting year. The model was re-based in 2016 with the new baseline 2012 data
released with the 2017 model update.
Industrial Marketing Research (IMR) provides data from their Continuing Consumer
Auto Maintenance Survey, which provides replacement rate data broken out by 27
ML/RL (product codes) for 10 types of vehicles, by age. This survey is conducted at
the end of each quarter and includes 100,000 participants and approximately 187,000
vehicles, annually.
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