The Canadian aftermarket parts industry saw an increase of 7.4 percent in 2016 for the sale of heavy-duty aftermarket parts. At first glance, this appears to be great news for the Canadian market, especially when you factor in the fact that the US growth for this industry was only 1.5 percent in 2016.
This large growth difference seems quite surprising when considering the vast difference in the commercial vehicle population of both countries. While Canada has more than 1.1 million commercial vehicles, with nearly 350,000 of them being Class 8 trucks, this number pales in comparison to the United States’ 9.2 million commercial trucks, of which nearly 3 million are Class 8 vehicles. One would think that the US would see a higher growth rate or at the very least a similar growth rate to Canada.
Experts in the industry used the Heavy Duty Manufacturers Association’s Heavy-Duty Dialogued to examine the reasons behind this growth. MacKay & Company Vice President of Sales, John Blodgett and IT Specialist David Kalvelage credited a lot of this growth in the industry to the exchange rates, which makes aftermarket parts pricier for Canadian fleets. In fact, as much as 4.5 percent of the growth in 2016 can be attributed to the exchange rate and higher prices. This leaves a difference of a mere 2.9 percent, which is still higher than the US growth rate, but by just 1.4 percent.
Another difference between the two countries is who is making fleet repairs. In Canada, only 58 percent of fleet owners do in-house repairs, a number which is higher in the US. It also is important to look at where aftermarket parts in Canada are being sold. Just about half of all Canadian aftermarket parts purchases are made through dealers, while other fleet owners purchase parts through distributors (17 percent) and independence repair shops (14 percent).
Experts are expecting this growth to slow from now until 2021, a timeframe in which the current $4.9 billion market is expected to only grow to $6 billion. However, the duo from MacKay & Company still anticipates a growth of 6.5 percent for 2017, especially for emission related parts, which could increase by as much as 42 percent.