January 2024: 2024: "Thoughts & Predictions"

First & foremost, we would like to wish all of our ACG "Smart Parts" Readers a Very Happy, Safe & Prosperous New Year as we march into yet another year with our 166th Edition of ACG "Smart Parts". Thanks so much for your support and constant dedication to Parts Excellence!

Our first issue of the New Year, as in each year, is devoted to looking ahead to get some idea of what we may expect going forward. As in previous years, we gather our personal data along with other industry analysts to give our readers a condensed and concise analysis of what may lie ahead.

First of all, our title of our first issue of 2024 cannot be simpler. We all have our own opinions, whether based on facts, personal experiences, previous results, or whatever. Bottom line, we all could answer this simple question...

"What Do You Think Will Happen?"

The answer to that question ends up being our title of our first issue. Everyone seems to have their own "Thoughts & Predictions" of what may happen in the future. Hopefully, we can provide some insight and perhaps help shape your own "Thoughts & Predictions".

Our goal in this month issue of ACG "Smart Parts" is to provide our readers with the latest data and insight so we can all shape our own thoughts, opinions and predictions as to what may lie ahead in 2024.

How much will Battery Electric Vehicles, (BEV's) and Fuel Cell Electric Vehicles, (FCEV's) impact our future, not only in Sales, but also in the Service & Parts Departments?

The Answer to These Questions and Many More!...

Let's Begin!

We will start with research from our well-respected team of industry analysts on their forecast of New & Used Vehicle Sales, including the rise of Battery Electric Vehicles, (BEV's) and Fuel Cell Electric Vehicles, (FCEV's) in 2024.

The "rise or fall" of BEV's and FCEV's, no matter how you look at it will change our whole perspective of these vehicles in the Aftermarket. How will we be servicing these vehicles and what parts will we need? What additional safety and training will our technicians require?

When we add in these BEV's and FCEV's into the mix of our overall up-front Sales Forecasts, and eventually the Aftermarket, it's pretty obvious that the impacts will be felt overall.

Before we get the impacts of BEV's and FCEV's, let's take a look at what forecasters and analysts think about Front End Sales in general for 2024.

Analysts at Edmunds.Com forecast and expect "Clashing Market Forces in the New Year, and Forecast 15.7 Million New Vehicles Will Be Sold"

Their December 13th, 2023 article goes on to say...

"The car shopping experts at Edmunds say opposing market forces are expecting to keep new vehicle sales relatively steady in 2024, forecasting that 15.7 million new cars will be sold. The Edmunds data represents a 1% increase from their estimate of 15.5 million new vehicle sales in 2023. EV market share is expected to tick slightly higher to 8% of total new vehicle sales in 2024, up from 6.9% in through November of 2023."

Jessica Caldwell, Edmunds Head of Insights also goes on to say...

"2023 experienced improved inventory levels from pandemic-era lows combined with pent-up demand to deliver strong sales estimated up 12.7% year over year. While the year ahead holds the promise of further increased inventories and enticing deals that consumers have eagerly awaited even though 2023's interest rates are expected to linger..."

Lastly, and based on their data, "Edmunds experts put together their list of three biggest industry trends they predict will shape the road ahead in 2024, along with some direct consumer shopping guidance."

• "The Covid-19 pandemic spurred a series of significant price hikes...but Edmunds data reveals pricing has peaked, as we improved inventory has driven incentives back into the market."
• "Shoppers seeking options on the affordable side of the new vehicle market...according to Edmunds, days-to-turn data, vehicles transacting below 50K are selling more quickly, (30 days) than vehicles above the threshold, (47 days), which is a reversal of that trend from the fall of 2020 through the fall of 2021"
• "Lastly - Consumer Callout: Edmunds experts say 2023 models will be selling out sooner than expected as many automakers have rolled out 2024 models early and aggressively..."

So, from our perspective here at ACG "Smart Parts", we can expect a continuation and a slight rise in New Vehicle Sales in the year ahead. This news just fuels our Aftermarket Parts & Service Sales as vehicle maintenance will still be on the fore front.

But, what about Used Vehicle Sales?...

A recent blog by Anthony Allen at www.boltontechnology.com that more vehicle owners are buying older cars...

"In recent years, there has been a noticeable shift of vehicle owners, as they are increasingly opting to hold on to their vehicles for extended periods of time. However, what's even more intriguing is the buying behavior of consumers. According to industry experts, there is a projected surge in used car sales, with a robust growth rate of 9% expected between 2019 - 2025."...As a result, there is a steady and continuous demand for maintenance and repairs, creating a lucrative opportunity for service shops."

Now we come to our portion of our "Thoughts & Predictions" for 2024 as we delve into the Auto Parts Aftermarket and Service Repair side of things looking ahead.

As Anthony Allen was closing out his recent blog, he also mentioned that "as we approach 2024, it's crucial that technicians, service advisors, dealership owners, and repair shop owners stay ahead of the curve in a rapidly changing industry."

I think most of us are pretty aware of Anthony's comments, but how will the "rapidly changing industry" effect our future Parts Sales? Where will our Parts Sales come from?

Our last contributor and industry analysts may just have those answers we are looking for, databridgemarketresearch.com has provided us with some interesting facts the consider...

The global auto parts manufacturing market attained a value of 701.57 Billion in 2023, driven by a rising demand for passenger vehicles. The market is expected to witness a further growth in the forecast period of 2024-2032, growing at a Compound Annual Growth Rate, (CAGR) of 5.7% - 6.1%

The article goes on to say...

"Major factors that are expected to boost the growth of the auto parts and accessories market in the forecast period are incentives taken by the government and the rise in the regional demand. Furthermore, the easy availability of raw materials is further anticipated to propel the growth of the auto parts and accessories market. On the other hand, a global slowdown is further projected to impede this growth in this timeline period..."

"Global auto parts and accessories market was valued at 660.21Billion in 2022 and is expected to reach 877.12 Billion USD by 2030, continuing to register CAGR rates of 5.7% - 6.1%."

We also have to consider or keep in mind that these projected increases in Parts Sales also includes BEV's and FCEV's as front-end sales increase on these vehicles, so will the need for replacement parts & service.

For a more detailed report on this "EV Revolution", you can visit our website at smartpartstraining.com where all past issues of ACG "Smart Parts" are available and since April 2010. Our March 2022 issue titled "The Parts Department in the EV Revolution" was devoted completely to this new wave of vehicles.

From an ACG "Smart Parts" perspective and experiencing the "in the trenches" view with Parts & Service Managers all over the country this past year, I believe there is still more to these "Thoughts & Predictions".

Although we appreciate the expert opinions and analysis from these great sources, in my opinion, we need to include more based on what we have been experiencing now for the past few years since Covid-19.

The everyday experiences of Parts & Service Managers over these past few years can't go unnoticed and to some degree, I believe will continue into 2024, in order to keep our customers satisfied.

Supply chain issues for some manufacturers, back orders, chasing parts, continuous parts price increases, having enough techs, maintaining competitive and profitable to industry guidelines, etc. will be on-going in 2024 in my opinion.

There is no doubt that even though the future looks positive from an industry standpoint, our jobs as Dealers & Managers will continue to be tougher than in previous years.

Our "Thoughts & Predictions" are surely important as the research can surely shape them, but what's most important is how we end up at the end of it all, in this case, December of 2024 when we do it all again!

Happy New Year from ACG "Smart Parts!"

If you want to learn more about ACG Smart Parts "Eight Habits of Highly Successful Parts Managers", visit our website @ www.smartpartstraining.com, or...just pick up the phone and call me at :

(786) 521 - 1720...After all, not knowing is not worth not "fixing" it...