Automotive aftermarket professionals are naturally concerned about their job security as artificial intelligence capabilities grow. An industry expert recently put minds to ease, explaining that AI is set to boost efficiency in the industry without slashing jobs.

Attendees raised concerned about the impact of AI on job functions within the automotive aftermarket at the MEMA Aftermarket Suppliers Vision Conference earlier this year. In a session focused on AI’s role in the industry, Neury Freitas, partner at advisory firm Roland Berger, acknowledged the interest around the concern and offered insights into how AI can enhance efficiency without significantly reducing the workforce.

“We see that AI is going to definitely help companies improve their efficiency in general,” Freitas observed.

But, he clarified that increased efficiency does not necessarily equate to a massive reduction in jobs within the industry.

“There are clear use cases — you have your service, when you have within the chats or you have your customer center, this is an example [of how] AI with chatbots, they can really help,” Freitas explained

He further added that time to complete work can be reduced at the lower-skilled jobs because AI can help speed things up.

Freitas aimed to demystify the implications of AI on employment, highlighting the demand for more specialized roles. “Yes, in the world, like in the U.S., we will have demand for more specialized jobs, including data scientists. But we as the aftermarket … that’s knowledge proof.”

In other words, there’s a lot of specialized knowledge in this industry. There are many specialists and that’s knowledge that artificial intelligence can’t replace.

He explored what aftermarket companies will need to think about. Freitas specially stressed the importance of a strong IT infrastructure rather than hiring an extensive team of expensive AI specialists.

“You need to have a strong IT infrastructure, you need to have a strong IT group. Again, you do not need to go and hire 20 very expensive data scientists that specialize in AI,” Freitas said.

He cited the high costs associated with AI experts, noting, “The last information I got is like the signing bonus of like an AI expert is around like $1 million. This is what we are talking about; like it’s insane. This is not something that we believe most of them are going to be able to afford.”

Freitas concluded by emphasizing the importance of partnering with specialized experts to effectively implement AI without overwhelming costs. “We need to go in and hire and then finally, openness that they have hired those experts,” he said, advocating for a balanced approach to integrating AI into the automotive aftermarket.

Image credit: Depositphotos.com

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A recent breakthrough could mean that electric vehicle wireless charging could be just around the corner.

The American Society of Mechanical Engineers reported that the Oak Ridge National Laboratory (ORNL) and Volkswagen successfully demonstrated the first-ever 270-kilowatt (kW) wireless power transfer system, opening the door to EV charging without the need for physical cables.

The 270 kW of power represents the highest wireless charging power ever achieved and could play a key role in shaping the future of EV infrastructure. The success of the project is part of ongoing efforts to improve the convenience and efficiency of EV charging, eliminating the need for cables and plugs.

The system uses a resonant inductive coupling technology, which transfers energy from a coil in the ground to another coil embedded in the vehicle. In addition to high power transfer, the system boasts an impressive 98 per cent efficiency rate, making it nearly as efficient as wired chargers.

According to ORNL, this technology has the potential to drastically reduce charging times, especially for larger EVs such as trucks and buses, without the hassle of handling bulky charging equipment.

“Reaching this level of wireless power transfer represents a huge leap forward,” Madhu Sudhan, principal investigator of the project at ORNL told the society. “This technology could transform EV charging, making it more convenient and accessible for everyday use while maintaining high efficiency.”

Wireless charging could offer significant advantages in the EV industry. It could remove one of the largest barriers to adoption — the inconvenience of physically plugging in vehicles — particularly in urban environments where space is limited and conventional charging stations can be cumbersome.

The American Society of Mechanical Engineers reported that further development will focus on ensuring that the system is scalable for mass production and compatible with various EV models. While significant advancements have been made, widespread adoption of wireless charging will require further standardization across the industry.

In the future, wireless charging systems like the one developed by ORNL and Volkswagen could be installed in parking garages, streets or highways, allowing vehicles to charge automatically without human intervention. This would not only be more convenient for consumers but could also support autonomous vehicles, which may not require manual charging at all.

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A recent global survey highlighted how social media is significantly influencing young trade professionals’ passion for their careers, despite ongoing social stigmas and lack of parental support.

The survey, conducted by Dewalt and WorldSkills International, reached out to young trade professionals from 69 countries and regions. It found that social media plays a crucial role in shaping their passion for skilled trades. The survey, which polled participants of the upcoming WorldSkills Competition 2024, aimed to understand the motivations, inspirations, and challenges faced by the new generation entering these essential career paths.

Chris Nelson, chief operating officer at Stanley Black & Decker, parent company of Dewalt, emphasized the importance of this data in advocating for skilled trades.

“We know that if we want to continue to advocate for these essential career paths, we must understand the next generation’s aspirations, motivations, and challenges,” he said. “This data will be vital to those efforts, particularly our Grow the Trades program, which funds vocational training and reskilling programs in construction and manufacturing to support the tradespeople of the future.”

Despite their enthusiasm, young trades professionals still face significant barriers. About four in 10 (42 per cent) of the respondents identified persistent social stigma as a major obstacle, while more than a third (35 per cent) pointed to a lack of parental support.

However, social media is emerging as a powerful tool for changing these perceptions. Three-quarters of the young professionals expressed a desire to use online platforms to raise awareness and visibility for skilled careers, recognizing its potential to inspire others to view these trades as fulfilling and rewarding.

The survey results also underscore the deep passion young professionals have for their trades and their eagerness to share this enthusiasm. This drive is complemented by a strong sense of independence and altruism among younger generations. Almost half (44 per cent) acknowledged that social media played a role in inspiring their career choices, with many being influenced by specific influencers or brands.

Additionally, nearly 70 per cent of respondents reported that their primary motivation for choosing a specific skill was the desire to work with their hands. Forty-four percent cited the desire to make a positive impact on the global community, while 42 per cent noted a willingness to start their own business. Cost-effectiveness and earning potential were also significant factors, with 45 per cent and 53 per cent of respondents respectively highlighting these aspects.

David Hoey, CEO of WorldSkills International, highlighted the need for innovative approaches to connect with young people.

“The findings from our survey highlight that to connect with young people, we need to be innovative and creative on how we present skilled career options,” he said. “It is essential to create diverse role models young people can relate to, use the power of social media to challenge outdated perceptions, and at every turn demonstrate that skilled careers are exciting, viable, and rewarding.”

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A new global survey found significant progress in fleet electrification across Europe, North America and Asia-Pacific, while highlighting the challenges fleet managers face in transitioning to a mixed-energy fleet.

The report, The Commercial EV Transition: Global Insights on a Mixed-Energy Fleet Future from by Frost & Sullivan, commissioned by WEX, outlined crucial findings for businesses managing fleets with both electric vehicles (EVs) and internal combustion engine (ICE) vehicles.

It revealed that while EV adoption rates vary depending on the region, business and fleet type, there is a clear trend toward increased electrification in the coming years. Nearly half of the surveyed fleet managers expect EVs to make up 50 per cent or more of their fleets by 2030.

The transition to a mixed-energy fleet is underway, but the report emphasizes that it will take time. Fleet managers are actively working to accelerate EV integration, but they face several challenges in managing both EVs and traditional ICE vehicles. Key factors such as geographic location, industry specifics and the scale of operations play critical roles in determining the rate of EV adoption.

“The study demonstrates that there is still high ambition to integrate EVs into fleet operations, not just to meet sustainability targets but to enable more cost-effective operations,” said Dr. Jose Pereira, director of Frost & Sullivan’s mobility advisory practice. “However, achieving this transition presents significant challenges.”

The report underscores the importance of expert guidance for fleet managers seeking to create an optimal EV adoption roadmap. These roadmaps must strike a balance between the initial investments required for vehicle acquisition and charging infrastructure and the long-term savings from reduced fuel costs, lower maintenance and extended vehicle life. Additionally, EVs offer enhanced driver satisfaction due to quieter, smoother rides.

However, fleet managers must also contend with new operational challenges as they integrate EVs into their fleets. This includes maintaining EV infrastructure, managing energy costs and coordinating charging payments across various locations. These factors necessitate updates to existing fleet management and payment systems to ensure operational efficiency and sustainability.

The report also identified broader challenges for fleet operators. Fuel costs (67 per cent), operational expenses (66 per cent) and shrinking profit margins (59 per cent) were cited as the top concerns, reflecting the pressure on fleet managers to control costs while transitioning to sustainable practices.

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Two federal bills key to the automtoive right to repair movement are set to become law in Canada, according to the Automotive Industries Association of Canada.

“AIA Canada is celebrating the passage of Bills C-244 and C-294, which are poised to become law imminently after being adopted by Parliament yesterday,” the group said in an announcement.

The two bills are not specific to automotive right to repair but do make amendments to the Copyright Act. Bill C-244 would allow end-users and third-party repairers to maintain, repair and diagnose products by bypassing digital protection measures but avoid breaking copyright laws. This, according to law firm Torys, would “bolster sustainable consumerism and facilitate accessibility in seeking aftermarket repair.”

This bill was introduced in October 2023. It was initially introduced as Bill C-272 in 2021 but was scrapped that same year due to a fall federal election despite passing first and second reading.

Bill C-294 focuses on allowing different technologies to work together without breaking copyright laws.  

“Both bills amend the Copyright Act and represent a historic step forward in the right to repair movement,” AIA Canada’s statement said.

Copyright and privacy expert Michael Geist has noted that Canada’s exemptions in the act previously didn’t go far enough to allow for a level playing field.

“Canadian anti-circumvention laws (also known as digital lock rules) are among the strictest in the world, creating unnecessary barriers to innovation and consumer rights,” he wrote soon after the introduction of Bill C-294 in 2022.

In mid-October, members of Canada’s auto care industry urged for the passage of both bills during testimony to the Standing Senate Committee on Banking, Commerce and the Economy, citing the importance for Canada’s automotive aftermarket.

As neither bill directly addresses automotive right to repair, the association continues to push for legislation directly tied to the issue.

“These two bills are a step in the right direction and are viewed as a necessary precursor to any right to repair legislation, however standalone legislation will still be needed to help reinforce a manufacturer’s requirement to allow access to diagnostic and repair information, which would address systemic issues around data ownership and ensure consumer choice,” AIA Canada noted.

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Whether it’s cost of living, desire for more space or the slower pace, people moving out of cities and into suburban communities has benefits for the automotive aftermarket. However, those living in cities are still key clients for the industry, an industry expert observed.

During the Three Dragons session at this year’s MEMA Aftermarket Suppliers Conference in Detroit, Greg Melich, senior managing director at Evercore ISI, provided the Wall Street perspective of trends taking place in the auto care sector. One of the trends he highlighted was the one that accelerated over the COVID-19 pandemic and saw people leave large urban centres for smaller suburban ones.

To Melich, whether people are driving their personal vehicle or using a ridesharing problem like Uber or Lyft, there’s a vehicle still accumulating mileage and that vehicle still needs to be maintained and repaired. However, people moving to the suburbs means more of a need for a vehicle as consumers generally have to travel farther per trip, be it for work or errands. So customer makeup could be different.

That said, while vehicle usage increases in suburban areas, Melich noted that incomes are generally lower than in urban areas. That means households with more vehicles in their driveways actually have less income than those in urban centres with fewer cars — so lower-income families are spending more on vehicle repair.

“This is one of those unique consumer categories where consumption of units doesn’t go up where incomes are higher in these more densely populated markets,” Melich observed. “So this is an area where having affordable cars that people can drive to get to work is such a key part of the equation.”

As for a tail risk, he pointed to electric vehicles. He noted investors are nervous when it comes to investing in the aftermarket because of the uncertainty of EV lifespan — making these essentially disposable vehicles — and issues around right to repair and if the industry will even be able to repair EVs.

“Because if we can’t fix the electric cars, and we don’t find a way to rebuild them … there’s a risk in 10 years that this industry,” could shrink.

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A new report points to significant hurdles for electric vehicles (EVs) in appealing to the majority of pre-owned vehicle buyers. This could potentially prolong the lifespan of internal combustion engine (ICE) vehicles and boosting the ICE aftermarket well into the future.

The  Lang Marketing report, EVs Lack Appeal for Many Pre-Owned Buyers, Boosting the Long-Term ICE Aftermarket, highlighted the challenges facing EV adoption considering that 80 per cent of vehicles on the road are pre-owned vehicles in the U.S.

Buyers of such vehicles are not as enthusiastic about EVs as new-car buyers, raising concerns about the long-term viability of the used electric vehicle market, Lang noted.

“”Without a strong market of secondary buyers who will purchase an increasing number of pre-owned Electric Vehicles, sales of new BEVs face strong headwinds, likely causing Internal Combustion Engine (ICE) vehicles to remain on the road longer than is common today,” Lang’s report said.

Here’s a rundown of what its report found.

New vs. pre-owned EV buyers

While EVs, particularly battery electric vehicles (BEVs), have gained traction among environmentally conscious new-car buyers, they remain largely a niche product.

Many new BEV owners are willing to overlook the operational limitations of current EV technology, including range, charging issues, and long-term reliability. However, these factors pose significant barriers to entry for pre-owned buyers, who may not have the flexibility or resources to navigate these challenges.

Range anxiety and charging infrastructure

One major obstacle is range anxiety. Many pre-owned vehicle buyers place greater importance on driving range than their new-car counterparts. While current BEV owners tend to drive fewer miles annually, this is not the case for most used-vehicle buyers. Furthermore, as the report notes, over 75 per cent of new BEV buyers charge their vehicles at home—an option that may not be available to many pre-owned buyers, particularly those living in apartments or lacking the necessary charging equipment.

The report stressed the need for a nationwide fast-charging network to accommodate the growing number of all-electric vehicles.

“Construction of an efficient and convenient charging infrastructure is a massive challenge, and even with strong government support, it will likely not be achieved for many years,” Lang said.

Reliability

Another major concern highlighted in the report is the long-term reliability of BEVs, particularly the cost of battery replacement. With battery replacements potentially exceeding US$6,000, many older BEVs may be scrapped rather than repaired. This is especially concerning to Lang given that the average vehicle on U.S. roads today is nearly 13 years old.

Moreover, some BEVs, like Tesla, may suffer from operational issues linked to relatively minor body damage, a problem that could disproportionately affect pre-owned buyers.

The future of ICE vehicles

Given these challenges, Lang Marketing predicted that ICE vehicles will continue to be a staple of the automotive landscape for many years to come. Their ability to meet critical driving needs — such as long-distance travel, ease of refueling, and performance in extreme weather conditions — ensures that many consumers will hold onto their ICE vehicles for longer.

The report further noted that while EVs will continue to increase their share of new vehicle sales, they may struggle to meet the needs of the pre-owned market. This could pave the way for a “Golden Age” of the ICE aftermarket, expected to extend well past 2040.

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Light trucks have extended their domination in the new vehicle market, continuing to account for the vast majority of sales.

At the same time, the luxury vehicle market is retreating, according to data from DesRosiers Automotive Consultants.

New light vehicle sales in Canada grew by 4 per cent in the third quarter of 2024, contributing to a year-to-date increase of 8.1 per cent. However, the passenger car segment continues to shrink, reporting a 10 per cent decline in Q3 and a 3 per cent decrease so far this year.

This shift has resulted in light trucks accounting for a dominant 86.4 per cent of the market, leaving just 13.6 per cent to passenger cars.

One of the standout trends this year has been the continued strength of small mainstream SUVs. Both subcompact and compact SUV segments have posted significant year-to-date gains, with increases exceeding 20 per cent. In Q3, compact SUVs saw rising sales, while subcompact SUVs experienced a slight dip but maintained strong year-to-date growth.

Unexpectedly, DesRosiers reported, small vans — which have steadily lost ground to SUVs over the years — saw a resurgence, posting a 17 per cent increase in sales compared to the same period last year.

But the luxury market is stumbling, proving to be a weak spot in 2024. Combined, luxury segments experienced an 8.5 per cent decline in Q3 and a 2.4 per cent decrease year-to-date. Only compact and intermediate luxury SUVs showed modest growth, up 2.6 per cent and 1.7 per cent, respectively.

Andrew King, managing partner at DesRosiers, attributed this pullback to a combination of high vehicle prices and rising interest rates.

“The luxury segments have seen long-term structural growth over the past two decades as baby boomers accumulated wealth,” King said. “Faced with high vehicle prices and high interest rates consumers have pulled back from luxury in 2024. It will be interesting to see if this is a temporary pause or the start of a longer-term market shift.”

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BYD has toppled Tesla as the top manufacturer of electric vehicles in a new ranking released by ABI Research.

A recent competitive assessment by the global technology intelligence firm narrowly placed BYD ahead of Tesla. The assessment provides an in-depth examination of the products offered by 18 OEMs across a wide range of criteria.

The companies evaluated and ranked are categorized into three groups:

• Market Leaders: BYD, Tesla
• Mainstream: GAC Aion, General Motors, Hyundai-Kia, Stellantis, Volkswagen, XPENG, ZEEKR
• Followers: BMW, Ford, Honda, Mercedes-Benz, NIO, Nissan, Renault, Toyota, Volvo

“The EV market is rapidly growing and is the clear future of the automotive industry,” explained Dylan Khoo, industry analyst at ABI Research. “OEMs have had widely differing responses to the EV transition as an opportunity and a challenge; some have fully embraced the technology, while others are being dragged into it against their wishes. This is reflected in their innovation and implementation capabilities,” explains

The analysis was based on nine criteria, segmented between innovation and implementation clusters. These included the OEMs’ battery technology, platform design, coverage of different vehicle segments, and electrified share of sales. BYD and Tesla stand out as the overall market leaders, with electric-only brands from China such as ZEEKR, XPENG, and GAC Aion also notable for their strong performance in the innovation rankings.

BYD, the Chinese OEM, has taken the top spot ahead of Tesla, which scored highly in vehicle range, platform innovation, and fast charging capabilities. BYD, however, significantly outperformed Tesla with its degree of vertical integration and the number of models it offers in different segments.

BYD, however, is not sold in North America as passenger vehicles. Federal leaders in both Canada and the U.S. placed 100 per cent tariffs on Chinese exports of Chinese-made EVs, aluminum and steel.

“The automotive industry is in a state of transition, and this assessment demonstrates the varying capabilities of OEMs as they try to make it through this period and come out on top. In some areas, the new upstart EV brands are a generation ahead of many ‘legacy OEMs’. The incumbents must look to technology solutions providers to revolutionize their capabilities and ensure they can maintain their position as the industry electrifies,” Khoo observed.

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Drivers are quickly finding ways to bypass safety limits in partially automated driving systems, according to a new study from the Insurance Institute for Highway Safety (IIHS), raising questions about how effectively these systems prevent risky behaviour.

The study examined how drivers interact with advanced driver assistance systems (ADAS) like Tesla’s Autopilot, GM’s Super Cruise and others, which are designed to assist with tasks like steering, braking and lane-keeping.

While these systems are intended to enhance safety, they rely on the driver remaining attentive and ready to take control. However, the IIHS report reveals that drivers are finding creative ways to sidestep the very safeguards that are meant to ensure their engagement.

Researchers found that drivers of vehicles equipped with these systems can easily trick the monitoring features, such as placing objects on the steering wheel to mimic hands-on driving or using simple hacks to bypass alerts meant to keep them engaged. This behaviour allows them to disengage from the driving task for extended periods, undermining the purpose of the safety features.

“The study underscores a major gap in the effectiveness of these systems,” said Alexandra Mueller, the study’s lead author. “By circumventing the safety features, drivers are essentially nullifying the systems’ ability to reduce risk.”

Partially automated systems like Autopilot and Super Cruise require periodic driver interaction to ensure attentiveness, but the study found that even more advanced systems, such as GM’s Super Cruise, which uses cameras to monitor eye movement, are not immune to workarounds. While eye-tracking systems are a step up from basic steering wheel sensors, drivers can still fool the technology by using eyewear or making brief glances to trigger the system.

The IIHS has called for stronger regulations and more robust safeguards to address these issues. Suggestions include limiting the amount of time that automated features can remain engaged without manual input, implementing stricter driver monitoring systems and improving the design of these technologies to prevent circumvention.

Mueller and her team argue that as automated technology advances, it’s crucial to develop systems that better account for human behaviour and the tendency to misuse or override safety features.

“The problem is not just in the technology itself but how drivers interact with it,” Mueller added. “People find ways to make the systems work for them, even in ways they weren’t designed for, which puts everyone on the road at risk.”

With automation becoming increasingly integrated into the modern vehicle, the report concluded that manufacturers need to focus not only on developing cutting-edge technology but also on implementing safeguards that truly deter unsafe driving practices. In doing so, the automotive industry can better ensure that partial automation systems contribute to improved road safety rather than inadvertently enabling reckless behaviour.

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A new report highlighted just how much cheaper electric vehicles need to get in Canada to reach mandated sales levels.

Unless policies or technologies change, the purchase cost of EVs needs to decrease by 31 per cent for Canada to reach its sales target of 60 per cent EVs by 2030, according to a new report released recently by Parliamentary Budget Officer (PBO) Yves Giroux.

“In the absence of a government mandate and regulations forcing manufacturers to sell at least 60 per cent of zero-emission vehicles, that’s the price differential that one would need to meet these targets,” Giroux said in an interview with CTV News Channel.

Last December, the federal government unveiled its Electric Vehicle Availability Standard, which outlines zero-emission vehicle sales targets for automakers. The standard requires all new light-duty sales in Canada to be electric or plug-in hybrid by 2035, with interim targets of at least 20 per cent of all sales being EVs by 2026 and 60 per cent by 2030. Automakers who do not meet those targets would have to pay into charging infrastructure.

The most recent statistics show that electric vehicles accounted for nearly 11 per cent of new vehicle registrations in 2023, but there are concerns that driver demand is slowing down. Growth forecasts for auto companies have plateaued, and concerns about charging infrastructure persist. The price of EVs has also pushed the cars out of reach for many consumers. According to the Canadian Black Book, the average cost of an EV was $73,000 in 2023.

However, the PBO acknowledged that consumers could save thousands of dollars in the long run by switching to an electric vehicle. According to the report, the ownership cost, which includes the price of a car and operating costs, of an EV over eight years would be $62,920 if the car was purchased in 2022, while the cost would be $71,680 for a gas-powered vehicle.

“It means that the relative price has to go down for EVs. It can be done by bringing the cost of electric vehicles down, but it could also be by increasing the cost of all the other alternatives, which is the gas- and diesel-powered cars and trucks,” Giroux said, according to CTV.

Some provinces offer their own EV incentives, many will wind down by the end of 2026. British Columbia is limiting the vehicle models that will qualify for rebates, while Quebec is cutting rebates by 60 per cent next year and phasing them out completely by 2027.

The new PBO report also assessed public charging stations. While it said the federal government’s EV sales target would increase the supply of charging ports in Canada by nearly 39,000 units, it does fall short of demand. 

“We estimate that by 2030 the market provision of public charging ports will be somewhat less than what is required according to a needs analysis commissioned by Natural Resources Canada,” the report stated.

Image credit: Depositphotos.com

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Production costs of batteries for electric vehicles is expected to drop in the coming years, an automaker leader recently predicted. And range is expected to significantly grow.

At this year’s International Vienna Motor Symposium, Volkswagen board member Michael Steiner predicted that battery production costs are expected to decrease by up to 40 per cent by 2035, with improvements in charging speed, durability, range, recycling, sustainability and safety.

 “The battery cell is the heart of electromobility,” said Steiner, who is chief research officer of Volkswagen Group.

He also noted that his group views standardization as a key solution to reducing costs.

“Battery systems account for around 40 per cent of vehicle costs. It is therefore vital to standardize all components of a battery system in order to reduce complexity and to bring costs under control,” added VW battery expert Marcel Hollweg.

The VW standardization strategy encompasses design, production and recycling of battery components.

“In the future, around 80 percent of the VW Group’s vehicles will be rolled out with the standardized unit cell,” explained head of development Arno Perner. These cells, all prismatic and designed for 400 or 800 volts, range from low-cost sodium-ion cells to high-performance solid-state cells.

Range expansion

The promise of solid-state cell technology would replace the liquid electrolyte with semi-solid or solid electrolytes, allowing higher energy densities (more than 400 watt hours per kilogram), greater safety and faster charging. That makes 800 kilometres of range a possibility for the future.

Fabian Duffner, a battery expert at Porsche Consulting, noted that Japan, South Korea, China and the U.S. are leading in this development. However, he noted, solid-state technology faces technical and financial hurdles.

“A solid-state battery requires significantly more lithium per kilowatt hour than a conventional lithium-ion battery,” Duffner said, making it more dependent on the fluctuating price of lithium.

Conventional lithium batteries will continue to exist, especially in the cost-sensitive mass market sector. Lithium iron phosphate batteries, known for their long service life and low costs but modest range, are widely used for both trucks and cars.

Geon Seog Son, a battery materials expert at Umicore in Korea, highlighted that sodium-ion cells, which are cheaper and safer, are currently available in a small sector in China but are expected to expand.

Image credit: Depositphotos.com

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It’s been a year now since Nick Brunet took over as the president of Bestbuy Distributors.

At the company’s annual Buy & Sell event, held in Vancouver this year, Auto Service World Conversations host Adam Malik sat down with Brunet to reflect on his year at the helm and more.

Brunet gives his background on how he made his way to lead Bestbuy, which included a tenure with 3M and what was meant to be a pitstop but grew into more within the mattress industry.

Now back in the automotive aftermarket, he talked about challenges facing the industry, how distributors like his are adapting to change and how the aftermarket is shifting.

Brunet highlighted the “magnetic pull” of the industry, noting the wealth of knowledge and veteran experience. He emphasizes the importance of exposing younger generations to the opportunities in the aftermarket.

“There’s an opportunity for growth within our own industry for those who are interested in a future in automotive,” he said.

He explored challenges around inventory management, a big one over his first year, trying to make sure vendor fill rates in managed fill rates going out.

“With having very little control over that piece of that supply chain, so a lot of learnings there,” he said.

He also explored the “shocking” breadth of products, with “a million active SKUs” in the system that can’t just be eliminated due to the wide range of products in this industry.

Regarding growth, Brunet noted its shareholder base has grown and is trending upwards. He attributed the success to the “communal feel and family” within the shareholder group.

“We’re truly friends,” he explained. “People have seen their kids grow up with each other and it’s infectious when you bring in a new shareholder.”

Looking ahead, Brunet predicted continued consolidation in the industry — and with those that have been acquired, they may be looking for change as they may not fit in well with the new owners and that could lead to new opportunities for growth for Bestbuy.

“So we’re going to see some probably discontent within those who are being acquired,” Brunet said.

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A new report found significant reliability issues in the electric vehicle charging infrastructure identifying key factors that hinder the growth of EV adoption.

The EV revolution has dramatically transformed the automotive industry, with global EV sales soaring by 233 per cent over the past five years, according to the International Energy Agency (IEA), by ChargerHelp outlined in an announcement of its findings.

However, the rapid growth in EV sales has outpaced the development of the necessary public charging infrastructure in the United States, contributing to a slowdown in projected EV sales as customers continue to point to this issue as holding them back from buying EVs.

A 2023 poll found that more than half of Americans are hesitant to consider purchasing an EV, with 80 per cent citing a lack of charging infrastructure as a primary concern. Additionally, the existing network of public chargers is plagued by reliability issues, with one in every five charging attempts failing.

ChargerHelp noted that there has been a lack of comprehensive data explaining these failures and how to address them but its recent study took a look at the public charging infrastructure to uncover the root causes of these reliability issues.

The ChargerHelp Annual Reliability Report: The State of EV Charging and the Driver Experience looked at more than 19 million individual data points.

“After pulling data for four years from 20,000 chargers, we identified key areas where the public charging system can be improved to better meet the needs of today’s EV driver,” said Kameale Terry, co-founder and CEO of ChargerHelp. “For the EV market to continue to flourish, we need to work to ensure true uptime is the norm through a standardized and more synchronized approach to data, maintenance and communication networks.”

The report highlights a range of issues, with a lack of interoperability standing out as a significant threat to system reliability and broader EV adoption in the United States. Interoperability refers to the compatibility of key system components — vehicles, charging stations, charging networks, and the grid — and the software systems that support them, allowing all components to work seamlessly and effectively.

Image credit: Depositphotos.com

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Digital natives, those who have grown up with personal computers, cell phones and the Internet, are set to significantly influence the future of the automotive aftermarket, according to a recent report.

In Lang Marketing’s Digital Natives Are Rewiring the Aftermarket’s Future, it noted that this demographic shift underscores a transformation in how automotive parts and services are researched, purchased and utilized.

In contrast to digital immigrants — those who adopted digital technology later in life — digital natives are inherently inclined to use the internet and various digital devices for making buying decisions. This generational divide is reshaping the aftermarket industry, with digital natives preferring online interactions over traditional face-to-face engagements.

By 2030, Lang estimated, digital natives will account for about 50 per cent of light vehicle aftermarket product volume.

“Digital natives and digital immigrants differ in three significant ways that affect their aftermarket behavior: Use of the internet as the primary source of aftermarket information, preference for online transactions as opposed to face-to-face purchases and the growth of platform buying,” it said in the report.

Internet, the primary resource

Digital natives instinctively turn to the Internet as their first resource for diagnosing vehicle issues, estimating repair costs, and locating parts or repair services.

This online-first approach contrasts sharply with digital immigrants, particularly Baby Boomers, who are more likely to seek information directly from repair outlets or parts stores through in-person visits or telephone calls.

Online transactions

Unlike digital immigrants who often see a distinct difference between in-store shopping and online purchases, digital natives perceive little disparity between the two. The speed, variety, and often lower prices associated with online transactions outweigh any advantages offered by in-store experiences.

Consequently, digital natives are less likely to value face-to-face interactions with parts store personnel or repair shop technicians when making purchasing decisions.

Platform buying

Platform buying has become particularly appealing to digital natives due to its efficiency, wide range of options, competitive pricing, and convenience. Platforms like Openbay, RepairPal and Amazon provide consumers with access to multiple repair outlets and parts choices, allowing for a comprehensive comparison of prices and services.

Amazon, in particular, has become a trusted platform for digital natives.

“Many digital natives are figuratively joined at the hip with Amazon. They love and trust Amazon,” Lang said. “It has become a powerful search engine that provides buyers with a wide range of automotive products and a growing array of automotive repairs.

This trust in Amazon offers a level of confidence that individual repair or parts outlets struggle to match.

Implications for the aftermarket

The increasing influence of digital natives is expected to drive profound changes in the automotive aftermarket. As noted, by 2030, digital natives will account for approximately 50 per cent of light vehicle aftermarket product volume. Their growing reliance on digital platforms for research and purchases will likely lead to a continued shift away from traditional retail models.

The report also noted that the volume and diversity of online-to-offline (o2o) purchases are rising, showing how consumers’ increasing use of the Internet is changing, especially with platforms, to make a broad range of buying decisions. That, Lang suggested, shows digital natives will continue to expand their use of platforms like Amazon to research and purchase vehicle parts and services, fundamentally altering the landscape of the automotive aftermarket.

“It’s inevitable that digital natives, driven by their values and purchase preferences, will increase their use of digital platforms (such as Amazon) to research and purchase vehicle parts and services in the future,” Lang said.

“This has profound implications for the future of the aftermarket as Digital Natives rapidly expand their share of the light vehicle aftermarket.”

Image credit: Depositphotos.com

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A recent MIT study found that electric vehicle charging stations significantly increase consumer spending at nearby businesses.

The study, which analyzed data from over 4,000 charging stations and 140,000 businesses in California, found that the presence of EV chargers led to an average annual spending increase of about $1,500 per business in 2019 and approximately $400 per business between January 2021 and June 2023.

The research highlights that the economic benefits of EV charging stations are particularly pronounced for businesses located within 100 yards of the chargers and those in low-income areas. This finding underscores the potential for EV infrastructure to support local economies, especially in underserved communities.

Lead author Yunhan Zheng, a postdoctoral researcher at the Singapore-MIT Alliance for Research and Technology (SMART), emphasized the broader implications of the study.

“These increases are equal to a significant chunk of the cost of installing an EV charger, and I hope this study sheds light on these economic benefits,” Zheng said.

The study’s findings suggest that EV charging stations could diversify income streams for charger providers and site hosts, leading to more informed business models.

The researchers used anonymized credit and debit card transaction data to measure changes in consumer spending, providing a robust empirical basis for their findings.

These findings hold a lesson for charging station developers looking to improve the profitability of their projects.

“The joint gas station and convenience store business model could also be adopted to EV charging stations,” Zheng said. “Traditionally, many gas stations are affiliated with retail store chains, which enables owners to both sell fuel and attract customers to diversify their revenue stream. EV charging providers could consider a similar approach to internalize the positive impact of EV charging stations.”

Image credit: Depositphotos.com

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Despite a rapidly changing automotive landscape, Canada’s vehicle fleet remains steady.

Canada has about 26.7 million light vehicles in operation. That’s up from 26.3, or 1 per cent, from 2022, according to Stats Canada data. Meanwhile, the U.S. VIO number has grown about 2 per cent since 2021.

A growth number that low indicates that at the least there’s no contraction of vehicles in Canada. But it’s not expanding a whole lot either, meaning the number of vehicles able to be maintained and serviced by the aftermarket isn’t growing.

Todd Campau, aftermarket practice lead at S&P Global Mobility described this figure as a neutral indicator at AIA Canada’s National Conference.

“It’s not growing real fast, it’s not shrinking real fast. But there are some external stimuli that are causing it to kind of stay flat,” he observed.

Campau highlighted a significant shift in vehicle preferences across North America, with a marked trend towards light trucks, including crossover utility vehicles (CUVs).

“We are seeing a rapid shift towards light trucks across North America,” he explained. “Passenger cars are essentially falling kind of off the cliff.”

Because there’s a low volume of passenger cars, that segment is aging rapidly. On the flip side, light truck age growth is staying more muted because they’re gaining more and more market share every year.

Turning to vehicle registrations, Campau provided a positive outlook, though not quite where they used to be just yet. After hitting 1.48 million unit sales in 2022, sales crept up to 1.66 in 2003, according to DesRosiers. Canada was on pace for 1.68 million units sold in April and that number has only grown to 1.78 as of September.

Slowly, numbers are going up to historical norms, Campau said. He noted that the Canadian new vehicle market showed resilience during both the pandemic and the Great Recession, outperforming the U.S. market.

“Actually, it’s a little better than what we saw in the U.S. The Canadian new vehicle market was pretty resilient,” Campai said.

Campau emphasized the importance of new vehicles entering the market for the health of the aftermarket sector.

“This is our pipeline. I know a lot of times we feel like it’s us against them; It’s OEMs versus aftermarket. And to a degree, we do battle on how to repair the vehicle,” Campau acknowledged. “But without the vehicles coming into the market, our pipeline dries up. And if our pipeline dries up in five or six years, that’s really bad for us.”

However, Campau pointed out that scrappage rates in Canada remain high, affecting the overall fleet size. Scrappage meaning any vehicle leaving the vehicle fleet, such as by end of life or exported.

“We’re still seeing pretty high scrappage. That’s a large number of vehicles that are leaving your fleet every year. It does seem like it’s recovering. But still, I’d like to see obviously a lower number to maintain that fleet growth in the upward direction,” he said.

Image credit: Depositphotos.com

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Industry leaders testified before a Senate committee, pushing for swift action on bills adjacent to the right to repair movement last week.

J.F. Champagne, president and CEO of the Automotive Industries Association of Canada (AIA Canada), Chris Kinghorn, vice president of strategy and growth at UAP and Daryll O’Keefe, president of Fix Network Canada testified before the Standing Senate Committee on Banking, Commerce and the Economy, advocating for the passage of Bills C-244 and C-294.

Bill C-244 addresses digital locks that currently restrict consumers from repairing or maintaining their products. By amending the Copyright Act, the bill would allow Canadians to legally bypass these restrictions without fear of infringing on copyright laws, giving repair advocates a significant victory.

Bill C-294, on the other hand, focuses on enabling compatibility between different systems and devices. This would allow for repairs and interoperability between various technologies, all while remaining within the confines of copyright regulations.

While these bills are not specific to the right to repair of motor vehicles, they do mark a significant step toward securing the right to repair in Canada and ensuring consumers’ ability to choose where and how their vehicles are repaired.

The trio separately urged the Senate to push forward on these bills and right to repair overall as they are critical for consumer choice. Champagne noted other countries as making progress and noted Quebec’s forward movement on right to repair.

Last fall, Quebec passed legislation to allow vehicle owners in the province to have protections in being able to choose the vehicle repair facility of their choice. It forces manufacturers to repair certain goods at “a reasonable price” to avoid having the consumer discard them entirely.

“It is critical that vehicle owners have a choice when it comes to where they get their vehicle repaired and serviced. But this choice could soon disappear if they don’t have access to their vehicle data,” Champagne stated during the testimony.

He further stressed that enacting this legislation will help ensure that independent auto care businesses continue to play a vital role in servicing Canadian vehicles, preventing a monopoly by automakers over repair data and services.

Both bills represent an essential step toward empowering consumers and supporting competition in the automotive service industry, AIA Canada outlined in a recap of the testimony.

However, the group has made it clear that their broader goal is the implementation of standalone legislation specifically for the automotive sector.

“Standalone legislation would affirm that vehicle data belongs to the consumer, granting them full control over where they choose to have their vehicle serviced or repaired,” AIA Canada observed.

“It is crucial that vehicle owners, not automakers, retain ownership of this data. This will ensure that consumers can continue to make independent choices while helping auto care businesses throughout the country remain competitive and serve as vital providers of essential vehicle services to Canadians.”

Image: AIA Canada’s J.F. Champagne speaks to the Standing Senate Committee on Banking, Commerce and the Economy on October 9

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Despite a dip in September sales, Canada’s auto market maintains a robust year-to-date growth, driven by strong performances from key brands.

Canada’s automotive market experienced a slight setback in September, with sales of new vehicles dropping 3.6 per cent compared to the same month last year.

This downturn comes after a warning from DesRosiers Automotive Consultants last month about the challenges of sustaining year-over-year gains in the final months of 2024.

Andrew King, managing partner at DesRosier, noted two reasons for the September market decline. One, September 2023 marked the early stages of when vehicle availability improvement was widely seen in the market.

“So it does present a fairly strong comparable,” he noted.

Secondly, the timing of this year’s Labour Day holiday meant there were three fewer selling days in 2024 compared to last year.

These factors combined to create a challenging month for the market, although the seasonally adjusted annual rate (SAAR) for September remained steady at 1.78 million units, consistent with July and August figures.

Despite the September dip, the year-to-date performance of the market remains impressive, the consultancy noted. By the end of the third quarter, the market had reached 1.41 million units, an 8.1 per cent increase from the first nine months of 2023.

Several brands have shown growth during this period. Volkswagen leads the market in percentage gain among higher volume brands, with a 55.8 per cent increase in 2024. Subaru and Mazda also posted strong performances, up 31.7 per cent and 26 per cent respectively, both surpassing the 50,000 sales mark YTD. General Motors (GM) leads in volume, with sales of 216,000 units, a 9.7 per cent rise from 2023.

However, DesRosiers did point out that the luxury segment is still facing difficulties in 2024, a trend that it plans to dig into.

The streak of increased year-over-year sales ended in June as 2024’s numbers matched 2023, however, it was seen as a blip at the time as outside factors, led by a cybersecurity incident, dampened sales numbers.

As the market moves forward, DesRosiers will closely monitor several key economic indicators, including employment data, Consumer Price Index (CPI) data and a Bank of Canada interest rate announcement. It further warned that the ongoing strike by American dockworkers strike could impact vehicle production, adding another layer of complexity to the market dynamics.

Image credit: Depositphotos.com

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Contrary to popular belief, Gen Z is hitting the road more than ever, with nearly half reporting increased driving over the past five years, according to a recent survey.

The 2024 “On the Move” Mobility Survey from Enterprise Mobility found some trends in U.S. that may surprise some when it comes to transportation habits, particularly among Gen Z.

The survey found that 47 per cent of Gen Z respondents are driving more than they did five years ago. This increase is higher than any other generation, with 41 per cent of millennials, 33 per cent of Gen X, and only 16 per cent of baby boomers reporting similar trends.

This surge in driving among Gen Z challenges the perception that younger generations prefer alternative modes of transportation. The survey highlights that 85 per cent of all respondents believe owning their own transportation provides the most personal freedom, and 66 per cent expect this freedom to become even more important over the next decade.

The survey also looked into perceptions of emerging vehicle technologies like autonomous and EVs.

Autonomous vehicles were met with mixed feelings; 41 per cent of respondents said they were excited about the technology, citing potential benefits such as making travel easier for those who cannot or prefer not to drive (50 per cent) and allowing people to engage in other activities while travelling (40 per cent).

The survey also noted barriers to widespread EV adoption. While 40 per cent said they would consider driving a fully electric vehicle in the future, the primary motivators are fuel cost savings (44 per cent) and positive environmental impact (34 per cent). However, 68 per cent of respondents believe there is a lack of necessary infrastructure to support widespread EV adoption.

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Image credit: Depositphotos.com

Car seats are a crucial consideration for many parents when purchasing a vehicle, according to a new study.

More than 60 per cent of parents stated that car seat compatibility significantly influences their buying decision, according to the survey conducted by car-shopping marketplace Cars.com.

Some parents are even bringing car seats to dealerships to ensure a proper fit before committing to a purchase. Among those who took this extra step, 84 per cent reported that their questions were answered effectively, making the process smoother and providing greater peace of mind.

In its 2024 Best Cars for Car Seats Report, Cars.com evaluated 52 model-year 2023-2025 vehicles, and only six vehicles, all SUVs, were deemed worthy of top spots on this year’s list. Volkswagen models were particularly prominent, capturing half of the top positions. The top-performing models identified in the report include:

• 2024 Lexus RX 450h+
• 2024 Nissan Pathfinder
• 2024 Subaru Crosstrek
• 2024 Volkswagen Atlas Cross Sport
• 2024 Volkswagen Atlas
• 2024 Volkswagen ID.4

The report also highlights the importance of budget considerations for families. Notably, five of the six top vehicles also appeared on Cars.com’s 2024 American-Made Index, with the Volkswagen ID.4, which ranked third, standing out for its affordability. The ID.4 has recently seen a 21 per cent price drop on Cars Commerce’s New Car Price Index.

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Burnout is a widespread issue affecting nearly half of workers globally, according to a new report from Boston Consulting Group (BCG).

The report, titled Four Keys to Boosting Inclusion and Beating Burnout, revealed that 48 per cent of employees in eight countries are currently experiencing burnout. This study surveyed 11,000 desk-based and frontline workers from Australia, Canada, France, Germany, India, Japan, the UK, and the US.

BCG’s findings highlight a crucial link between workplace inclusion and burnout. The report shows that when employees feel included, their chances of experiencing burnout are cut in half. Inclusion, in this context, means employees feel valued, respected, supported, and that they belong.

The research utilized BCG’s BLISS Index to measure workplace inclusion. This statistically rigorous tool identifies the factors that most strongly influence employees’ feelings of inclusion. The survey pinpointed four key sentiments that significantly impact employees’ sense of inclusion:

1. Good access to resources: When employees have the necessary tools and support, they feel more included and less stressed.
2. Senior managerial support: Employees who receive backing from senior management feel more valued and less likely to experience burnout.
3. Psychological safety with direct managers: A safe and open relationship with direct managers reduces stress and enhances feelings of inclusion.
4. Fair and equal opportunity for success: Ensuring all employees have equal chances for success fosters a more inclusive and less stressful work environment.

Despite the importance of these sentiments, the survey respondents reported low satisfaction levels in these areas. Addressing these issues is critical, as burnout is notably higher among certain subgroups. Women, members of the LGBTQ+ community, people with disabilities, and deskless workers face burnout rates up to 26 per cent higher than their counterparts. These groups also report feeling less included in the workplace.

Building a more inclusive work environment can seem daunting, but focusing on these four key areas provides a clear starting point. Employers need to listen to their employees continuously, addressing their pain points to improve inclusion and reduce burnout.

“Inclusion doesn’t end at recruitment. It requires ongoing dialogue with employees and addressing their daily challenges,” said Gabrielle Novacek, managing director and partner at BCG and co-author of the report. “By focusing on these key areas, companies can identify where to invest and innovate to improve inclusion and reduce burnout. This not only helps in avoiding the costs associated with burnout but also in attracting and retaining talent, ultimately leading to a thriving workforce.”

Image credit: Depositphotos.com

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A recent paper has found that Canadians have little knowledge of data access and control in their vehicles.

Fewer than a third (29 per cent) of drivers say they clearly understand who has access to the data their vehicle produces, while most (63  per cent) want to know who controls that data, according to the study, Data dynamics: Exploring vehicle owners’ data awareness, ownership and sharing, published last week by AIA Canada.

The study highlights the growing awareness of the amount of data consumers leave behind as everyday actions — such as shopping, watching videos online and driving habits — produce data valuable to stakeholders for various purposes.

Through a survey of vehicle owners, AIA Canada, in collaboration with Quorus Consulting Group, explored behaviours, attitudes and preferences related to in-vehicle data, including data ownership preferences and expectations, self-assessed awareness of the types and amount of data produced by their vehicles and data-sharing preferences.

The survey allowed the research team to analyze responses across key demographic categories such as age and gender, region and various vehicle profile variables like type, age and warranty status.

Three-quarters of respondents believe the vehicle owner should own the data. Only 10 per cent said the vehicle manufacturer is entitled to it…

In addition to wanting more clarity on who has access to their vehicle’s data, more than half (51 per cent) of respondents said they want a better understanding of how much data is produced. Meanwhile, 39 per cent said they wouldn’t know where to find their vehicle’s data.

Three-quarters of respondents believe the vehicle owner should own the data. Only 10 per cent said the vehicle manufacturer is entitled to it, and just four per cent said the company that developed the technology collecting the data should have ownership.

More than three quarters (78 per cent) of respondents believe vehicle manufacturers have a responsibility to do more to educate owners about vehicle data ownership.

When it comes to sharing data, 74 per cent said they would wirelessly transmit certain vehicle diagnostics to their regular service provider to help keep them updated on repair and maintenance timelines.

Nearly half (46 percent) said they would send their driving behaviour data to insurance companies to adjust premiums accordingly.

The report acknowledged that knowing how much data is left behind and tracked from everyday actions can be concerning or overwhelming for consumers. While some may embrace data tracking by staying up to date with the latest devices and apps, others may not be aware of the extent of data collection or may be concerned about the privacy of their personal information.

The report is free for AIA Canada members or $199 for non-members.

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With car manufacturers packing more technology into vehicles than ever before, a recent survey highlights which features drivers can’t live without — and which ones they’re willing to pay extra for.

Car manufacturers are increasingly incorporating advanced technology features into modern vehicles to enhance safety and convenience. A recent survey conducted by Uswitch aimed to identify the tech features that car owners find most useful and those that would influence them to pay more for a vehicle.

The survey revealed that parking sensors are the most popular tech feature, with 62 per cent of respondents considering them useful, and more than half (53 per cent) using them regularly. Parking sensors use radar technology to audibly alert drivers of obstacles when parking. Respondents cited safety (82 per cent), convenience (50 per cent) and efficiency (40 per cent) as the main reasons they find parking sensors useful.

Parking cameras are also favoured by nearly three in five (57 per cent) car owners, with respondents highlighting safety (82 per cent), convenience (48 per cent) and security (40 per cent) as key benefits.

Defrosters on sideview mirrors ranked third, with 40 per cent of respondents considering them useful for safety (59 per cent), convenience (59 per cent) and efficiency (38 per cent).

The survey also found that car tech features play a significant role in purchase decisions. Among drivers with built-in tech features, 38 per cent reported that these features influence their decision to buy a vehicle. Specifically, 35 per cent of respondents indicated they would pay more for a car with parking cameras or parking sensors, noting the potential cost savings of having these features pre-installed.

Image credit: Depositphotos.com

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According to a recent survey, the priorities of those working in the automotive aftermarket vary widely by generation.

The Defining Culture Survey shed light on what each generation in the auto care sector prioritizes, what they want to see in the work environment and how they view their peers.

The study was conducted by the Modern Industry Expertise (MiX) Council. It’s a group of industry leaders dedicated to working with the future generation of automotive aftermarket professionals. It was designed to find out how different generations in the industry view the workplace and asked how they view rewards and recognition, diversity and inclusion, technology and more.

Baby Boomers place the highest value on rewards and recognition, and by a wide margin. Almost a quarter (24 per cent) of respondents picked this as their top category, with just 10 per cent of Millennials, 11 per cent of Gen Xers and 4 per cent of Gen Z agreeing.

But Gen Z did put collaboration and teamwork as their top pick (29 per cent) with one in five Gen Xers and 19 per cent of Boomers choosing it. Only 15 per cent of Millennials agreed.

There’s more to come! Stay tuned for a podcast episode dedicated to this topic with Jeff O’Hara, chair of the MiX Council

The Millennials’ top choice was a supportive environment (23 per cent) but even that was lower Gen X (30 per cent) which also picked this as their top category. Even though 19 per cent of Gen Zers picked this category, it was the second highest for them.

But Where Millennials came out ahead of everyone was in the growth and innovation category, though just 13 per cent chose this one. They were followed by Gen Z (10 per cent) and Boomers (5 per cent) No Gen Xers picked this.

Gen Xers were tops for flexibility and adaptability (20 per cent). While 15 per cent of Millennials and 6 per cenf of Gen Zers agreed, no Boomer did at all.

Comments

When asked to comment about the impact other generations have on the workplace, there weren’t many compliments, if any, to go around.

For example, one Boomer comment blasted younger generations’ worth ethic, saying the older cohort is better.

“Seems like younger workers don’t want to get their hands dirty and only want a paycheque,” one Boomer wrote.

Something similar was noted by Gen X. “Younger generation wants the reward but [not] willing to put in the risk and time needed for overall success,” one commented.

Another Gen X noted that hiring bas become difficult because “some younger generations have different thoughts on long-term careers.”

For Millennials, they called out the older generation for being stuck in their ways. It was bought up multiple times that older workers cling to a “things are done this way because this is how we’ve always done it” mentality.

For Gen Z, they noted the need to move towards a different workplace environment. “Getting back to employee-centric is what upcoming generations are trying to do,” one commented.

While another Gen Zer appreciated the in-person work experience, they noted that “Millennials have streamlined the workplace with a heavy focus on technology making work faster and more efficient.”

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The automotive aftermarket will have access to even more electric vehicle experiences, along with the usual industry trend insights at AAPEX this year during Industry Week.

AAPEX 2024 is expanding its EV experience to provide more expert-led training sessions and product spotlights on the show floor, ensuring all segments of the automotive aftermarket are fully prepared for the transition to EVs.

From Nov. 5-7 in Las Vegas, attendees can choose from more from 15 EV-specific training sessions held on the EV Stage in Joe’s Garage, which can be found back on Level 1 of The Venetian Expo. Topics will include profitable servicing of EVs and their batteries, electrified vehicle maintenance, diagnosing the 12V power system, EV and hybrid HVAC systems and upcoming technological advancements that will drive EV adoption rates.

In addition, the session “Joint EV Trends and Outlook Forecast” will showcase new forecasts for growth in electric vehicle sales, the share of vehicles in operation, and predictions for select EV-related parts categories. This session will take place on Nov. 5, from 1:45 p.m. to 3:15 p.m.

Meanwhile, attendees can head to the show floor and check out exhibiting companies highlighting the latest EV advancements, providing access to the products and specialized expertise needed to service the rapidly expanding EV market.

Furthermore, the popular AAPEX General Sessions, “Trends Impacting the North American Aftermarket” and “Aftermarket Outlook 2025,” will return with new data, insights and market research.

Todd Campau, aftermarket practice leader at S&P Global Mobility, will kick off with his annual overview of key industry trends impacting the North American aftermarket and new insights affecting the global aftermarket. He’ll go through how the automotive aftermarket continues to evolve with the changing new vehicle market, the path to electrification and the aging vehicle fleet. You can catch this session will be held on Nov. 5, from 11 a.m. to noon, at The Venetian, Level 1, Galileo Room 901.

At the Aftermarket Outlook 2025 session, Circana’s executive director and industry analyst, Nathan Shipley, will cover trends observed in general retail and the aftermarket over the past two years. He’ll explain why understanding the drivers of sales performance during this period is crucial for predicting the near-term future of the industry. Shipley will also provide perspectives on how macro trends, both industry-specific and general, might influence future results. This session will take place on Nov. 6, from 11 a.m. to noon, at The Venetian, Level 1, Galileo Room 901.

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A recent survey has found that there are deficiencies in Canadian drivers’ understanding of dashboard warning lights.

The survey for Diono, a maker of children’s car seats, found that a significant number of Canadian drivers struggle to understand their vehicle’s dashboard warning lights, a confusion that could lead to dangerous situations on the road.

The study, which surveyed 2,000 Canadian drivers, aimed to assess how well they recognize and react to various dashboard symbols. Participants were asked to identify common warning lights, with some less familiar symbols included to test their knowledge. The findings suggest that as vehicles become more technologically advanced, driver education on dashboard literacy has not kept pace.

“Drivers understanding what the warning signs on their vehicles mean could be the difference between life and death, for you, your passengers or other road users,” said Tim Maule, CEO of Diono, “These warning signs are there for your safety and should never be ignored. If one comes on, don’t ignore it. If you don’t know what a warning sign means, either refer to your car manual … then seek expert mechanical help if appropriate.”

Confidence in dashboard literacy

When asked about their confidence in identifying dashboard warning lights, the survey revealed a wide range of responses, highlighting a notable gap in driver confidence.

Only 21 per cent of drivers felt extremely confident in their ability to recognize these symbols, while 29 per cent felt quite confident. A significant portion, 33 per cent, only felt moderately confident, and 14 per cent were slightly confident. Just 3 per cent of respondents admitted they were not at all confident in their ability to identify warning lights.

Handling of warning lights

The study also examined how drivers would respond if a warning light appeared on their dashboard and they were unsure of its meaning. The results showed a concerning number of drivers who might ignore potentially critical alerts.

Only 26 per cent of drivers said they would stop their vehicle immediately, demonstrating a cautious approach. Meanwhile, 39 per cent would seek help by calling someone or searching for the warning’s meaning online.

However, 25 per cent indicated they would head directly to an auto repair shop. Just 9 per cent said they would continue driving, hoping the issue would resolve itself.

A small fraction, 1 per cent, admitted they would ignore the light altogether unless something else seemed wrong.

Ease of symbol recognition

When asked whether they find the symbols on car dashboards easy to understand, the responses revealed that nearly half of the drivers struggle with symbol recognition.

While 49 per cent of drivers reported finding the symbols easy to understand, 21 per cent admitted they found them confusing, and 30 per cent were unsure whether the symbols were clear or not.

Ignoring warning lights

Regarding the likelihood of ignoring a warning light, a significant portion of drivers admitted they might overlook such alerts.

While 77 per cent of respondents said they were unlikely to ignore a warning light, showing some level of responsibility, 15 per cent admitted they were somewhat likely to do so, and 8 per cent said they were very likely to dismiss it outright.

The survey also revealed that nearly a third of drivers have ignored a warning light at least once. Specifically, 29 per cent of respondents admitted to having ignored a warning light, while 59 per cent claimed they had never done so, and 12 per cent were unsure if they had.

Among those who previously admitted to ignoring a warning light, a significant portion cited fear of repair costs as their primary reason. Specifically, 29 per cent said they ignored the warning light due to concerns about the potential costs involved.

Additionally, 26 per cent of drivers admitted they did not understand what the warning light meant, while 21 per cent said their car was still functioning normally, so they chose to carry on. Meanwhile, 19 per cent of drivers felt confident they knew what the warning meant and believed it was safe to continue driving, and 5 per cent were unsure of why they ignored the warning.

Image credit: Depositphotos.com

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With human error accounting for more than 90 per cent of road traffic accidents, the push toward autonomous vehicles is gaining momentum as a crucial measure to enhance road safety.

Car manufacturers are also feeling compelled to adopt advanced technologies to remain competitive as self-driving technology progresses. A recent report by IDTechEx, “Autonomous Cars, Robotaxis and Sensors 2024-2044,” looked at the future of the market for the next two decades, highlighting where there’s potential for these technologies to revolutionize driving.

It noted that Level 0, no automation, is virtually obsolete. In 2022, more than half of all vehicles in the United States were equipped with Level 2 autonomy, which includes features such as adaptive cruise control and lane-keeping assistance. But most Level 2 systems still require drivers to pay attention and keep their hands on the wheel. The report pointed out that Tesla, General Motors and Ford are at the forefront of this technology, with Tesla producing all of its models with Level 2 capabilities.

Many major automakers now offer these features as either standard or optional, often alongside automatic emergency braking.

The ultimate goal is Level 5 autonomy, where vehicles will operate entirely without human intervention. At this point, the technology would eliminate the need for steering wheels, pedals or any conventional controls, transforming drivers into passengers.

In 2023, Ford received approval to deploy its Level 2-plus BlueCruise hands-free technology on roads in Germany and the U.K., though its use is currently restricted to specific motorway sections. Simultaneously, Volkswagen has been integrating Mobileye’s Road Book technology, which leverages data collected from Mobileye-powered vehicles to create high-definition maps. These maps support more advanced Level 2 advanced driver assistance systems (ADAS) and lay the groundwork for future higher levels of autonomy.

In some parts of Europe, the U.S., and China, Level 3 autonomy is beginning to emerge. This level allows drivers to take their hands off the wheel and focus away from driving under certain conditions. Honda introduced the first Level 3 vehicle in Japan in 2021, and the Mercedes-Benz S-Class with Level 3 features is now available in Germany and select U.S. states. However, safety remains paramount, with these vehicles typically limited to speeds around 40 mph and requiring drivers to reengage with 10 seconds’ notice.

While Level 3 technology represents the cutting edge of consumer automotive tech, some cities have already introduced Level 4 autonomous transportation. Robotaxis, which operate without a human driver, are providing ride-hailing services in select U.S. and Chinese cities. According to IDTechEx, there is now a viable path for the widespread deployment of Level 4 vehicles.

However, IDTechEX noted that Level 4 technology for privately owned vehicles is still far from realization, as both the industry and regulators must first become more comfortable with Level 3 systems.

Autonomous vehicles are making continuous, steady advancements, yet they still encounter obstacles like uncertainty around liability in driver-free operations and reluctance from lawmakers

“But persistence will be rewarded, as autonomous vehicles are expected to bring a newfound safety to roads worldwide, ultimately preventing all collisions caused by driver error,” the group said, noting that it may take 15-20 years for this level of autonomy to become widespread.

Image credit: Depositphotos.com

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June’s automotive retail sales data revealed notable declines across various segments, including those in the aftermarket, raising concerns within the industry.

DesRosiers Automotive Consultants (DAC) reported a “worrying” drop in automotive retail sales for June, with declines observed across multiple segments.

New vehicle dealers led the way with an 8.6 per cent decrease in sales compared to the same month last year, while used vehicle dealers saw a 6.1 per cent decline.

The aftermarket also saw a significant drop-off. Automotive parts, accessories and tire stores reported a 7.6 per cent decrease in sales for June 2024 compared to June 2023. DesRosiers noted that even though monthly data can be volatile, the scale of the decline is alarming, especially considering the impact of the CDK software outage that affected the industry in June.

Despite the troubling June figures, the consultancy noted that the first half of 2024 showed more stability in the automotive retail sector.

Used vehicle dealers recorded a 0.9 per cent increase in sales, while new vehicle dealers saw a slight 0.5 per cent rise. Conversely, gasoline stations experienced a minor 0.4 per cent decrease in retail sales.

Automotive parts, accessories and tire stores fell behind the pack with a 1.1 per cent decline — however, that number comes off the record high sales seen in the first half of 2023.

“Retail sales have remained stable in the first half overall and have maintained high dollar value figures, but June itself has shown notable weakness,” commented Andrew King, Managing Partner at DAC.

Image credit: Depositphotos.com

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If a shop owner considers themselves integral to the daily operation of their business, they will have a tough time finding a buyer, warned an industry advisor.

Hunt Demarest, accountant and business valuator with accounting firm Paar Melis, couldn’t stress this point enough while speaking at a recent conference.

“If you have a day-to-day job in the business — you are a service advisor, you are a technician — there is going to be a group of people looking to buy a shop that will no longer be interested in your shop,” he said during the session Transitioning Your Business at the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo in Kansas City. “Period, end of story.”

Those looking to buy a shop are looking for an investment. They want a turnkey operation. Otherwise, from their point of view, they’re not buying a business. They’re buying a job.

If the shop’s owner is working the front desk, has built a relationship for decades with customers and has decided to retire and sell, that could greatly alter the dynamic of the shop with that person gone. The success of the shop may be heavily tied to the shop owner being in the shop all the time.

After they leave, buyers will wonder if the shop will maintain the same level of excellence.

“So when you leave and you retire, I have to hire someone else or try and find someone on this, is this [level of success] going to be anything similar?” Demarest said, posing as a prospective buyer in this scenario. “You have 30 years of trust. You are probably the most trustworthy person here because these people have been dealing with you coming back here — am I going to have the same value of trust when you leave? Probably not.”

That’s why the owner removing himself from the day-to-day — and even the business entirely — is so important, he added. By not being there, the owner has put the business in a position to be sold. But that doesn’t mean they have to.

“If you get your business to a state where it’s profitable enough and you’re building this business to sell, it doesn’t mean that you have to sell,” Demarest pointed out. “The magic dream is … get your kids to run it, make them make all your profit, and you can just ride off into the sunset and live in Florida or whatever.”

If the kids aren’t an option, apply that thought process to a general manager, he added.

“If you can work yourself out of the business … then you can truly be in a position where someone comes to you” looking to buy rather than you searching for someone, Demarest said. “You can say, ‘Hey, everything’s for sale for the right price.’”

Image credit: Depositphotos.com

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Ford Motor Company announced significant updates to its electrification strategy, aiming to boost consumer adoption and profitability as electric vehicle sales continue to fall short of expectations.

Last month, Ford unveiled a series of strategic updates to its electrification plan, designed to speed up consumer adoption and enhance profitability — all in response to how the market has changed.

What’s happened is, that despite ongoing growth in sales, recent numbers have been underwhelming compared to expectations. That’s made Ford nervous about future growth, particularly in North America where Ford has high exposure but EV adoption rates lag behind Europe and China.

Key changes in Ford’s strategy include introducing an all-new electric commercial van set to begin production in 2026, a medium-size pickup truck based on a new affordable EV platform, and a new truck expected to launch in 2027.

Furthermore, Ford announced it cancelled plans for three-row all-electric SUVs. These will instead be replaced by a suite of three-row SUVs with various propulsion options — not just electric. The company said it will also adjust the timing of product launches and realign how it sources batteries in search of cost reductions.

These changes don’t come without costs, noted ratings agency DBRS Morningstar in an analysis of the announcement. Ford estimated that this pivot would total up to US$1.9 billion.

EV sales at the beginning were propped up by early adopters. DBRS noted that these consumers were gung-ho to embrace new vehicle propulsion technology and were more amenable to EVs’ higher pricing than internal combustion engine vehicles.

“However, with EV sales to early adopters now seemingly significantly exhausted, EVs are struggling to maintain ongoing sales momentum among mainstream consumers,” DBRS noted in its report.

It observed that prospective buyers cited concerns over the higher costs of EVs, even though several manufacturers have reduced prices. And other issues like range, charging reliability and infrastructure are improving.

DBRS also noted that Ford’s EV spending share is set to decrease.

“Ford Model e’s current operating results underscore the current challenges (not only to Ford, but also to several mainstream automotive OEMs) of the EV landscape, which are further exacerbated by uncertainties over the future sales/adoption rates of EVs,” the group noted.

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Artificial intelligence can unlock the future of the automotive aftermarket, transforming business operations and boosting profits, according to an industry advisor.

Neury Freitas, partner at Roland Berger explored how AI can revolutionize automotive aftermarket businesses during the MEMA Aftermarket Suppliers Vision Conference. Highlighting four key areas, he told attendees about how AI can drive revenue growth, cost savings and quality assurance in the industry.

He started with improving revenue. Can it happen with AI? “We think that yes, you can you can gain market share — if your competitors are not doing the same thing,” Freitas observed.

AI tools enable businesses to better identify customer needs and stay abreast of industry trends, he emphasized.

“You can use AI tools and use cases to be really on top of everything that’s happening in the industry. And that will allow you to create personalized aftersales. You can better serve your customers,” Freitas explained. “And in doing so, you can also understand better the end consumer — why are they really wanting? Why did they are looking for?”

Freitas pointed out that many companies are not optimizing their demand forecasting processes.

“When we talk to a lot of few of you in the room, it’s shocking for us. A lot of companies have a very, very simple process of doing the demand forecast,” he said. “A lot of times [they] use historical data, without any real additional steps or machine learning. [There are] tools that are available right now like additional intelligence for demand forecast. So go and deploy those … they are going to help you there.”

Discussing cost savings, Freitas highlighted the potential of AI in commodity procurement during the session, Profitable Deployment of AI in the Automotive Aftermarket, based on insights from MEMA Aftermarket Suppliers 2024 Landmark Study.

“Can we save some money on our costs? Absolutely,” he said. “So the first thing that a lot of companies are deploying right now is commodity procurement. So you will know when to buy, what to buy [and] what’s happening with the trends. You will be able to track more information than a human is able to. And again, use cases they have been developed — it’s something you could go and deploy right now.”

Quality assurance is another critical area where AI can make a significant impact. “When you are producing parts, you can deploy visual AI tools to help make sure that you have the right parts. And then you can go in, identify if there is a problem, what’s the potential root cause and then go back and solve that,” he said. “So you start having issues and you stop having scrapping of production.”

Freitas acknowledged that not all AI use cases will be relevant for every business but urged attendees to look for areas where it can help.

“But off the bat, there will be a few use cases that you can go and deploy and be able to save some money or be able to capture some additional market,” he said.

Image credit: Depositphotos.com

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It’s been a strong run of year-over-year increases in the new vehicle sales market but one industry observer is concerned about how much longer the pace can continue as indicators point to an uncertain future.

June was the only month with a dip in the last 22 months — it’s dead even total in 2024 with 2023 being the only time there wasn’t growth.

But the bar has been fairly low to jump over — pandemic-related issues suppressed sales, so a return to normalcy in supply, demand and consumer confidence easily helped the market rebound.

While numbers rebounded above pandemic stats, they still sit below pre-pandemic data. And while August 2024 new vehicle sales were up compared to the same time last year — DesRosiers Automotive Consultants reported growth of 5.6 per cent, with an estimated 165,000 units sold — we’re still below the pre-pandemic average of over 180,000 units for August.

The seasonally adjusted annual rate (SAAR) for August 2024 reached 1.81 million units, the highest since the first quarter of 2024, when pent-up demand surged.

But will these good times last? Good times, compared to recent data, anyway. The consultancy isn’t quite sure.

Andrew King, DesRosiers’ managing partner, noted that sustaining significant percentage gains will be challenging.

“The final four months of 2023 saw improved inventory and an uptick in sales pace,” King said. “The SAAR consistently exceeded 1.8 million, setting tougher benchmarks for this fall.”

King also highlighted rising unemployment, declining GDP per capita, and high vehicle prices as factors contributing to the uncertain outlook for the coming months. Corporate performances varied widely in August, with some companies facing declines while others set new sales records.

Image credit: Depositphotos.com

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Canadian vehicle owners are facing rising costs for maintenance and repairs as inflation continues to impact the automotive aftermarket.

The J.D. Power 2024 Canada Customer Service Index—Long-Term (CSI-LT) Study found that the average cost of a dealership visit has climbed to $465, up from $432 a year ago, a 7.6 per cent jump. Similarly, visits to independent shops have increased, but at a lower rate to $273 from $262, up 4.2 per cent.

The study observed that macro-economic conditions and higher interest rates are not only driving up costs but also prompting owners to keep their aging vehicles longer. According to the study, 40 per cent of visits to dealerships and 24 per cent of visits to aftermarket shops were for repairs, compared to 31 per cent and 21 per cent, respectively, in 2021.

This trend, J.D. Power noted, indicates that more owners are choosing to invest in repairs rather than purchasing new vehicles.

“With inflation pushing auto repair costs upward and interest rates making larger-ticket items like mortgage payments and new-vehicle purchases more expensive, owners are being hit with a ‘double whammy’ and have to make different decisions in order to balance their budgets,” said J.D. Ney, automotive practice lead at J.D. Power Canada. “As more owners opt to fix their vehicle instead of buying a new one, auto repair shops have an opportunity to attract more lucrative business in this $13 billion market by excelling in the service factors that drive customer satisfaction, mainly saving time and convenience.”

The study also noted that saving time and convenience are key factors affecting customer satisfaction. Completing service within 90 minutes and a speedy send-off, including paperwork and key pick-up, are the two performance indicators that have seen the most significant increase in importance year over year.

Dealerships continue to dominate the auto service and repair market, holding nearly half (48 per cent) of the market share. Independent shops and quick lube locations capture 27 per cent and 11 per cent, respectively. These market shares have remained almost unchanged from 2023, the report noted.

Average annual visits also remain steady, with 1.6 visits per year in the dealership segment and 1.3 in the aftermarket segment, up from 1.2 in 2023.

With an average cost of $465 per visit, dealerships account for 61 per cent of the auto service market’s total revenue, while the aftermarket segment captures the remaining 39 per cent. These proportions have remained consistent since 2023.

On a 1,000-point scale, Great Canadian Oil Change (838) ranked highest among aftermarket service facilities, followed by Jiffy Lube (834) and Midas (813).

Image credit: Depositphotos.com

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The Young Professionals in the Auto care sector is the gathering place for the industry’s youngest professionals.

But there’s plenty of room for it to grow.

YPA chair Kari Hann sat down with Auto Service World Conversations host and YPA committee member Adam Malik to talk about her journey into the aftermarket, into the YPA — or as it was known when she first joined, the Young Executives Society  — and what her goals are as chair.

Hann also dives into what the YPA community means for the aftermarket and its young professionals. She discusses the opportunities that are there and why employers should support their younger staff to join.

But the community needs the support of the industry as well. Aftermarket companies should also rally around the group, Hann urged, to provide not only greater chances to network but also learning opportunities.

Listen in as she dives into the value of the YPA, her goals and what’s possibly ahead for the community.

Tune into the conversation by clicking the banner above or choose your platform of choice below to hear this episode and find the full Auto Service World Conversations library.

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Despite a growing demand for skilled trades, Generation Z remains hesitant to pursue blue-collar careers due to societal stigmas and misconceptions, according to a new report.

As the U.S. grapples with an aging workforce and increasing labor shortages, the report, The Annual Blue-Collar Report: Gen Z and the Trades Need Each Other, reveals that Gen Z is wary of blue-collar careers, even as these jobs offer stability and growth. It looked into how Gen Z navigates education and career decisions, highlighting the need to overcome stigmas associated with blue-collar careers.

According to the report, 76 per cent of Gen Z respondents agreed that a stigma exists around attending vocational schools instead of pursuing a traditional four-year university degree.

The U.S. Bureau of Labor Statistics reports that employment demands in trade industries are often outpacing the 3 per cent average growth rate of all occupations, signaling a widening gap in the workforce. Despite this, the report found that many Gen Z members are interested in blue-collar careers but they just don’t realize it yet.

The traditional and so-called “American Dream” is being reevaluated by Gen Z, especially as concerns about the economy, job stability and the impact of artificial intelligence (AI) grow. One-third of respondents believe white-collar jobs are less stable today compared to their parents’ generation, and 41 per cent worry that AI will reduce future job opportunities.

Despite these concerns, Gen Z identified attributes commonly associated with blue-collar jobs, such as flexible work hours (73 per cent), job stability (61 per cent), and overtime pay (58 per cent), as appealing.

The report also highlights the influence of parents, schools and media on Gen Z’s career choices. More than half (51 per cent) of respondents cited family as the most significant influence on their career decisions, yet 61 per cent said their parents have not discussed vocational school as an option. Furthermore, only 17 per cent reported receiving education on the benefits of vocational training, a figure significantly lower than for bachelor’s degrees, community colleges, military service, and entrepreneurship.

Media portrayals also play a role in shaping perceptions, with 35 per cent of respondents saying television shows and movies influence their career interests. Nearly half (47 per cent) believe that trade professionals are generally depicted negatively in these media portrayals.

The report also noted the need for greater gender balance in blue-collar careers. Nearly half (48 per cent) of respondents agree that women are discouraged from pursuing trade careers from a young age, and 58 per cent believe that women face more discrimination in these fields compared to other professions.

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With a more complex supply chain due to more players and reduced reliance on China, the question was asked of supplier leaders if customers would be willing to pay more if it led to a stronger supply chain that was more reliable.

The question was tackled by Gino Amador, president of Snap-on Equipment, and Eric Sills, CEO of Standard Motor Products during the MEMA Aftermarket Suppliers Vision Conference. They emphasized the critical balance between cost and resilience, highlighting the lingering impacts of past supply chain crises and the evolving expectations of customers during the session The Race to Mexico … and Beyond.

“Nobody will pay for theoretical resilience. But everyone will pay for actual resilience when the other guy can’t show,” Amador asserted, capturing the practical reality of customer expectations.

He then impressed upon the industry to build strong resiliency measures by paraphrasing an old proverb: “The people that are resilient don’t pray for an easier time, they pray for stronger shoulders.”

Sills empathized with consumers, understanding why supply chain resilience is a hot topic.

“I think it’s because there continues to be a certain amount of PTSD still coming out of [how] the supply chain was in the last couple of years,” he said, referring to the pandemic that left the aftermarket with empty shelves at times.

This ongoing concern drives customers to seek assurances from suppliers about their ability to withstand future disruptions, Sills added.

Customers, he further noted, are increasingly wary of relying too heavily on China.

“They’re expecting us to reduce our reliance on China. We’ve been talking a lot about supply chain diversification, the ultimate source of supply, so on and so forth. And so it’s clearly top of mind for them,” he explained.

This presents an opportunity for suppliers to demonstrate their supply chain strategies.

“We do satisfy a lot of what you’re expecting,” Sills said.

However, Sills acknowledged the challenge of balancing resilience with cost competitiveness.

“As the shelves get replenished … they may be willing to pay a little bit more, but not a lot more,” he said.

Customers expect suppliers to remain competitive while mitigating risks associated with low-cost products from China.

“It’s an ongoing dialogue with all of our customers. And I think that there’s receptivity to it. But it’s still going up against the low-cost product and people will take some risks with that,” Sills said.

Image credit: Depositphotos.com

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E-commerce auto parts market has experienced phenomenal growth, with sales exceeding $35 billion in 2023 in the United States — a 50 per cent increase over 2020 and more than triple the 2016 volume, according to Lang Marketing’s report, “E-commerce Auto Parts Sales Triple.”

Lang Marketing’s analysis divides the e-commerce auto parts market into three major categories: do-it-yourself (DIY), business-to-business (B2B), and online-to-offline (o2o).

DIY e-commerce involves auto parts purchases made by individuals rather than professional technicians or businesses. B2B e-commerce includes transactions between businesses such as distributors, retailers and installers. Online-to-Offline e-commerce covers the online purchase of auto parts that are then installed offline by authorized repair shops.

The report found big shifts in the e-commerce shares of these segments. DIY, which dominated nearly three-quarters of the e-commerce market in 2016, has seen its share decline to less than 60 per cent by 2023. In contrast, o2o volume has grown significantly, expanding its share by about two-thirds over the past seven years. Meanwhile, B2B transactions, though still representing the smallest share of the e-commerce auto parts market, have doubled in size since 2016.

Growth dynamics also vary widely among the three categories. While DIY sales captured the largest share of e-commerce product growth over the past seven years, their overall market share has diminished. Transactions in the o2o space, however, have taken a larger share of the total e-commerce aftermarket growth between 2016 and 2023 than their current market share reflects. B2B sales have similarly outpaced their market share in contributing to e-commerce growth during the same period.

The report also noted a shift in the sales channels for e-commerce auto parts, particularly between platforms and e-sellers. The shares of first-party (1P) and third-party (3P) segments of e-commerce auto parts sales have changed over the past seven years, reflecting broader trends in the marketplace.

Image credit: Depositphotos.com

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While many admit to driving dangerously at times, there’s growing support for measures like speed enforcement.

More than half of Ontario motorists confessed to engaging in risky driving behaviours, with younger drivers being the worst offenders, according to a recent study by CAA South Central Ontario.

The study found that more than 55 per cent of Ontario drivers admitted to participating in unsafe driving practices in the past year, a number that jumps to 61 per cent among younger drivers aged 18 to 34.

These statistics highlight the ongoing issue of dangerous driving on Ontario’s roads, with speeding, distracted driving and aggressive driving topping the list of risky behaviors.

“These actions not only endanger the drivers themselves but also put all road users at risk,” said Michael Stewart, community relations consultant for CAA SCO. “We must prioritize road safety by promoting responsible driving habits.”

The study found that the most common dangerous driving behaviors admitted by motorists are:

1. Speeding: 41 per cent
2. Distracted driving: 20 per cent
3. Unsafe lane changes: 9 per cent
4. Aggressive driving: 8 per cent
5. Running red lights: 7 per cent

In contrast, drivers reported witnessing these dangerous behaviours in others far more frequently:

1. Speeding: 84 per cent
2. Unsafe lane changes: 76 per cent
3. Aggressive driving: 76 per cent
4. Distracted driving: 73 per cent
5. Running red lights: 56 per cent

Stewart noted the disconnect between personal admission and observation. “The data tells us that it is far more prevalent for people to see others driving dangerously rather than admitting that they themselves are carrying out the same behaviour.”

Speeding remains a significant concern for Ontario motorists, particularly on highways with higher speed limits. While 86 per cent of drivers feel safe on residential streets, only 68 per cent report feeling secure on highways with posted speeds of 110 kilometers per hour.

“The risk of collision can increase when travelling at higher speeds,” Stewart noted, pointing out that dangerous driving behaviours are more commonly observed on highways.

The study also highlighted Ontario drivers’ support for stricter penalties to combat dangerous driving. This year, 35 per cent of Ontarians reported that fines and penalties for speeding and stunt driving have influenced their driving behavior — a 7 per cent increase from the previous year.

Despite this, the study found that 40 per cent of Ontario drivers actively avoid roads with Automated Speed Enforcement (ASE) cameras, even though 78 per cent believe that ASE can help deter speeding. Furthermore, 84 per cent of drivers support the presence of ASE near schools, and 81 per cent support it near community centers. However, 17 per cent of Ontario drivers — equivalent to more than 1.5 million people — have received a ticket from an ASE camera.

“It is no surprise that Ontario motorists are in favour of stricter penalties as speeding and dangerous driving continue to be an issue,” Stewart said. “What is surprising, however, is that despite the support for ASE, four out of 10 Ontario drivers will actively avoid roads where an ASE is present, an increase from last year.”

Image credit: Depositphotos.com

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Younger generations are leading the way in collector car enthusiasm, a recent survey has found.

The survey from Hagerty, titled Future of Driving 2024 found that Gen Z is fueling a growing interest in classic cars, trucks and motorcycles. It found that 60 per cent of Gen Z respondents expressed a desire to own a classic car, a significant jump compared to 31 per cent of Baby Boomers.

This enthusiasm among the younger generation signals a promising future for the collector car market, the company said.

“The next generation of car enthusiasts is here, creating a vibrant market for us to help enthusiasts protect, buy, sell and enjoy their special vehicles,” said McKeel Hagerty, CEO and chairman of Hagerty. “The data is clear that Gen Z isn’t just playing car video games, watching YouTube or creating social media content; they’re also finding ways to participate in the collector car community.”

The survey polled more than 2,000 Americans. It further found that driving passion persists despite the rise of digital entertainment and alternative transportation methods. More than three-quarters (77 per cent) of Gen Z respondents stated that they either loved or liked driving, suggesting that the joy of driving is very much alive among the younger generation.

They have a strong desire for classic vehicles. Gen Z and Millennials are nearly neck and neck when it comes to owning or wanting to own a classic vehicle, with 32 per cent and 30 per cent, respectively, reporting current or previous ownership.

And while SUVs dominate, luxury vehicles attract Gen Z: While SUVs remain the most popular vehicle type among respondents (38 per cent), Gen Z shows a notable affinity for luxury cars, with 23 per cent showing interest in owning one, just behind the 26 per cent who favor SUVs.

They also showed an emotional connection to driving: Half of the respondents who drive reported feeling a sense of freedom behind the wheel, with adventurous (28 per cent) and calm (24 per cent) being other top emotions associated with driving.

The survey also found that DIY repairs are popular among Millennials: While most car owners prefer taking their vehicles to dealerships or service centers for maintenance (55 per cent), 27 per cent reported performing DIY repairs. Millennials, in particular, are leading the charge in this area, with 34 per cent of them opting to handle repairs themselves.

Hagerty’s findings also suggested that younger car enthusiasts are diversifying their interests, focusing on a broad range of vehicles from the past four decades. This trend is driven in part by social media and the accessibility of online and in-person car events, which serve as critical entry points into the hobby.

According to the survey, 40 per cent of respondents said their first exposure to classic and enthusiast cars came from attending car shows, which Hagarty said highlights the importance of these events in fostering a new generation of collectors.

Platforms like YouTube (39 per cent) and Instagram (38 per cent) are playing significant roles in how Gen Z interacts with classic vehicles, often serving as their first point of contact with the hobby. Additionally, driving itself remains a key way for these young enthusiasts to engage with classic cars, with 35 per cent citing it as a primary method of interaction.

Image credit: Depositphotos.com

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With the rising prices of new vehicles, car owners are placing greater emphasis on maintaining their current vehicles. To help, they’re reaching for premium brand products, according to a recent survey.

A survey of 2,000 American car owners, conducted by Talker Research on behalf of Pennzoil, found that 73 percent of respondents are taking better care of their vehicles as new car prices continue to climb. This trend is driving a significant preference for brand-name products in vehicle maintenance, with 57 per cent of car owners opting for well-known brands over private-label alternatives, which only garnered 34 per cent of the preference.

Nathan Shipley, executive director of industry analysis in automotive at Circana, showed data at AAPEX 2023 from the last three years and it all suggested that numbers are flat in the private label area.

“But there’s not some major shift to private label like I think a lot of us would expect as we have gotten into a little bit tougher economic times this year,” he said during his session, Aftermarket Outlook 2024.

He noted that higher-income consumers are frequenting the aftermarket more often. Retailers, he said, need to account for that when thinking about their product offerings.

The survey noted that vehicle maintenance products are among the most regretted private-label purchases, ranking in the top three across all product categories in the past month. This finding further underscores the importance consumers place on trusted, high-quality brands for maintaining their vehicles.

Motor oil, in particular, is a key focus for many car owners, especially those who rely on professionals for maintenance services, known as DIFM (do-it-for-me) consumers. Nearly two-thirds of these consumers are willing to spend more on motor oil to protect their vehicle’s value over time. Brand familiarity plays a critical role in their decisions, with nearly 60 percent of DIFM consumers stating that it influences their purchasing choices.

The survey also found that consumers believe premium brands perform better over time and are more trustworthy compared to private-label products.

“Consumers are recognizing the long-term benefits of investing in premium products for their vehicles,” said Amanda Luce, Pennzoil Brand Manager. “This survey underscores that consumers see the tangible benefits of choosing premium brands … knowing that their investment will help to drive value for their vehicle over time.”

Image credit: Depositphotos.com

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A dramatic shift in the vehicle market has seen domestic nameplates plummet, making way for the dominance of foreign models, according to Lang Marketing.

There were nearly eight million fewer domestic nameplates in operation during 2023 than 10 years earlier.

“This was caused by the combination of weak new vehicle sales of domestic nameplates and their disproportionate share of the car and light truck annual scrappage,” Lang said in its report, Foreign Nameplates Dominate the Aftermarket.

As the vehicles in operation (VIO) increased by about 15 per cent between 2013-2023 in the United States, domestic nameplates suffered a sharp decline in share. Domestic nameplate cars were hit hard as their VIO share fell from about 20 per cent to less than 12 per cent between 2013-2022, Lang reported.

“The population of domestic nameplate light trucks increased, but their growth did not offset the plunging number of domestic nameplate cars,” Lang observed.

By 2023, domestic nameplates held less than half of the VIO share, down from more than 60 per cent in 2013.

Conversely, foreign nameplates have surged in the past decade. While the domestic nameplate VIO plunged by 8 million between 2013-2023, foreign nameplates jumped by about 44 million. Never has such a sharp and profound shift occurred in the nation’s nameplate mix of vehicles on the road, according to Lang.

“The light vehicle aftermarket has been rocked by the dramatic shift in the VIO’s nameplates from domestic to foreign models,” Lang’s report said. “This change had a direct and significant impact on the nameplate mix of aftermarket product sales.”

Foreign nameplates topped 5.5 per cent annual product volume growth between 2013-2023, while domestic nameplates fell by 0.1 per cent in annual product sales.

Lang pointed to the market-leading sales growth of repair specialists and foreign specialists to exemplify the rapid expansion of the foreign nameplate aftermarket.

“These two major outlet groups generate a preponderance of their business from foreign nameplates and, as a result, their combined growth has greatly outpaced the overall do-it-for-me (DIFM) market over the past 10 years,” Lang said.

Following COVID-19, the aftermarket has rebounded from the historic decline it suffered in 2020. Foreign nameplates have led the recovery and generated virtually all aftermarket product volume growth between 2021-2023, Lang observed. It projected that foreign nameplate product sales will climb at more than double the yearly pace recorded by the overall light vehicle aftermarket during 2024 and 2025.

“DIFM and DIY aftermarket product growth, the strength of five major types of brands sold in the aftermarket, and other aftermarket sectors have been impacted significantly by the historic migration of the VIO’s nameplate mix from domestic to foreign models,” Lang said. “The aftermarket impact of this nameplate shift will continue and even intensify in the coming years.”

Image credit: Depositphotos.com

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As e-commerce heats up, a new study shows that high delivery costs and complicated checkout processes are driving shoppers to abandon their carts, underscoring the critical need for retailers to perfect their delivery game.

A new consumer study conducted by Retail Week in partnership with nShift highlighted the critical role of delivery in the success of e-commerce retailers. The study, Shopper Unlocked: Inside the Minds of 1,000 Consumers, found that 95 per cent of shoppers have abandoned a shopping basket at some point. High delivery costs are the leading cause, with 62 per cent of shoppers citing this as their reason.

Complicated checkout processes were blamed by nearly a quarter (23 per cent) of shoppers, while around 20 per cent pointed to poor delivery timeframes and unsatisfactory return policies as key issues.

Customers highly value convenience in their shopping experience, with nearly two-thirds (63 per cent) of respondents indicating that the ability to choose the time and date of delivery is very important. Additionally, 62 per cent of shoppers stated they would not purchase again from a retailer after a single bad delivery experience.

David Carey, senior vice president of customer experience at nShift, emphasized the importance of flawless delivery experiences.

“These results hammer home just how little patience most consumers have for bad delivery experiences — and how important it is for retailers to get deliveries right every time,” he said in the announcement about the survey findings. “As we move into the second half of the year and the peak shopping season, the most successful retailers are likely going to be those that focus on delivery and experience management as a business-critical point of difference.”

To help retailers prepare, nShift offered five key tips:

1. Offer a broad range of delivery choices: Retailers must provide a variety of fulfillment options, including different delivery costs, times, and locations. Doing so can increase conversions by 20 per cent.
2. Clearly communicate on returns: While free returns are popular among shoppers, they may not be feasible for all retailers. Regardless of the policy, it must be clearly communicated and prominently displayed on the website.
3. Use returns to your advantage: Returns are inevitable during peak periods, but with efficient processes, retailers can convert up to 30 per cent of returns-related refunds into exchanges and repeat business.
4. Take ownership of the post-purchase experience: The relationship with the customer does not end at checkout. Personalized communications, branded messaging, and real-time tracking can enhance the post-purchase experience, fostering customer loyalty and repeat purchases.
5. Ensure your core delivery management capability is up to scratch: Retailers need multi-carrier capabilities to ensure transport capacity during busy periods and offer the range of delivery options that shoppers seek, including local pick-up points.

“Customers expect delivery to be sculpted around their lifestyle,” Carey said. “It will be no different as peak season draws near. Being match-fit for peak season depends on taking the right steps now, so retailers can truly differentiate through deliveries.”

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Used car prices continue to decline as availability increases and new car prices have stabilized in the Canadian automotive market, according to analysis from AutoTrader.

The Canadian automotive market has experienced notable shifts in both the used and new car segments as used car prices continue to soften and new car prices eased their upward trend over the last few months.

Starting in the third quarter of 2023, the demand for used cars began to soften year-over-year, the AutoTrader Price Index for June reported. Along with the decrease in demand, an increase in used car supply — credited to strong new car sales and trade-ins — has led to a decline in used car prices. In June 2024, the average used car price dipped by 1.1 per cent from the previous month, settling at $36,342, an 8.3 per cent decrease compared to the same period last year.

That’s a higher decrease than reported by DesRosiers Automotive Consultants, which reported a 4.5 per cent drop in purchase price of passenger vehicles in June 2024 compared to June 2023.

New car prices, meanwhile, have shown stability since the beginning of the second quarter of 2024. Average new car prices in June were $66,807, a 0.8 per cent increase year-over-year.

AutoTrader noted that the stabilization of new car prices is thanks to manufacturers bringing back incentives, including more competitive interest rates, making new vehicles more affordable. In June, AutoTrader reported, interest rates on new car loans dropped to 5.3 per cent, down from 6.2 per cent in November 2023.

And interest rate cuts have helped as well. As more cuts are expected — two or three more before the end of the year — AutoTrader expects to see a boost in sales in the second half of 2024.

Demand for new vehicles should be met by adequate supply, AutoTrader expects. The group noted that ongoing pent-up demand from the pandemic will lead to gains in subsequent months.

AutoTrader’s Vehicle Affordability Index, which measures affordability in relation to average weekly wages, showed improvements in both new and used car segments. As of June 2024, it takes 29 weeks of average earnings to purchase a used vehicle and 54 weeks for a new one. It noted that these figures are higher than what was seen pre-pandemic, they’re down from 34 weeks for used cars and 56 weeks for new vehicles

BEV update

Prices for battery electric vehicles (BEVs) continued to drop, down year-over-year 14.7 per cent for new BEVs and 13.7 per cent for used ones.

That’s being driven by greater BEV inventory — AutoTrader reported that its website has seen a combined 109.4 per cent year-over-year growth for new and used BEVs. But there’s been a decline in demand, with EV purchase consideration dropping from 68 per cent in 2022 to 46 per cent in 2024.

Looking forward, used car prices are expected to continue normalizing, while new car prices are likely to remain stable, AutoTrader reported. The group believes vehicle prices for both new and used cars likely peaked in 2023 and a return to pre-pandemic levels is not anticipated in the near future due to various factors.

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For the first time in two years, dealer inventory of new vehicles saw a decline.

Cloud Theory, a provider of real-time automotive data insights for manufacturers, agencies and affiliates, reported a decrease for August. This marks the first pullback — excluding typical seasonal declines from December to January — that the industry has seen in two years.

The report also highlights a range-bound demand picture, with diagnostic numbers indicating that turn rates have remained steady in the mid-to-high 30s for the past seven months. Average marketed pricing has held steady for three consecutive months, but market adjustments, which measure consumer-visible discounts and incentives, continue to increase.

“Our numbers have been pointing to a slowdown in supply growth, and it was inevitable that the industry would eventually reach a ceiling,” said Rick Wainschel, vice president of data science and analytics at Cloud Theory. “

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It will be a long time until electric vehicles equal the number of internal combustion engine ones on our roads but a recent industry expert gave his best guess to try and narrow down a window.

With about 1 per cent of the share of vehicles in operation, EVs don’t make up too many vehicles on roads today. So the automotive aftermarket doesn’t need to worry too much about them just yet, noted Todd Campau, aftermarket practice lead at S&P Global Mobility.

“EV sales have slowed. I would not say they’re shrinking, but they are not growing at the rate that we’ve been used to,” he said during the Three Dragons session at this year’s MEMA Aftermarket Suppliers Conference in Detroit. “They’re still coming. This is normal. Don’t get too concerned about it just yet, but it certainly slowed a little bit.”

Beyond the fact that there’s a relatively small share of EVs, they’re also very young.

So to answer the question of how long until both vehicle types are on a level playing field, he looked at another automotive trend that has taken place over the last couple of decades.

“So I compare this to the shift from passenger cars to light trucks. Twenty years ago, passenger cars dominated the vehicle fleet at a rate of about 57 to 43 [per cent],” he explained.

Over the next few years, the gap narrowed and got closer to 50-50. It was around 2012 when we reached the point where light trucks took off and now passenger cars make up only a third of the vehicle fleet.

Bottom line: It’s going to take a long time for EVs with 1 per cent market share to get to about half.

“Even if you’re going to sell all EVs tomorrow, it will take us a decade or more to get to 50 per cent,” Campau said. “We’re not selling 100 per cent of these tomorrow. So there’s a long time for your internal combustion parts to [satisfy] the market.”

When pressed for a year, Campau pointed to 2045 as the earliest date for parity. That’s 21 years away. There are 300 million vehicles in the U.S. right now — that means 150 million vehicles or more will be sold in the next 20 years.

What’s stopping it from happening sooner? Prices are a major stumbling block.

“With the price of an EV, we already know that the majority of new vehicle purchases … are purchased by upper-income households. That’s only going to get worse with electric vehicles,” Campau said.

However, prices are also going up for new ICE vehicles. So if prices stay out of reach, that’s continued good news for the aftermarket.

“So you’ve got a whole segment of the marketplace that literally cannot afford some of these prices,” he said. “And so I think we could see elongation of the lifecycle in the ICE fleet. So I think we’re probably 20 years away [from EV parity].”

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A new report found that job candidates are frustrated with long waiting times and poor communication in the hiring processes.

Insights from Cronofy’s annual Candidate Expectations report revealed the increasing psychological burdens candidates face due to prolonged interview scheduling and lack of communication.

Cronofy, an embedded scheduler for teams, surveyed 12,000 candidates across seven countries in Europe and North America, to gain insights into what candidates want out of the hiring experience.

Candidates from the U.K., France, Germany, USA, Spain, Canada and the Netherlands shared that long wait times to schedule interviews, ghosting and a lack of communication are placing higher psychological burdens on candidates than ever before.

The most frustrating issue in recruiting, according to 28 per cent of candidates, is lack of responsiveness and poor communication. Neurodiverse candidates feel the effects of inefficient interview processes even more keenly, reporting higher levels of stress at 56 per cent, compared to the global population’s 38 per cent.

Amidst layoffs, candidates reported feeling that the market is starkly less stable compared to previous years. In 2024, a higher proportion (36 per cent) of candidates are waiting a month or more before disengaging from an interview scheduling process, up 12 per cent from last year. Just 12 per cent of candidates would disengage after one week, which is less than half compared to 2023.

The percentage of candidates expecting to wait a month or more for their first interview has nearly tripled from last year, rising from 5 per cent to 14 per cent. The largest proportion of candidates (31 per cent) report that their first interview took as long as 2-3 weeks to schedule, presenting a missed opportunity for recruiters looking to recruit top candidates, the company observed.

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Mitchell’s quarterly report highlights the rising costs and repair challenges for electric and hybrid vehicles in Canada, with claims data showing significant differences compared to gasoline-powered vehicles.

As hybrid and electric vehicles gain popularity in Canada, new data from Mitchell’s Q2 2024 Plugged-In: EV Collision Insights report found that repair costs for these vehicles continue to exceed those of traditional gasoline-powered cars, particularly in the Canadian market.

The latest report from Mitchell shed light on the complexities and costs associated with repairing battery electric vehicles (BEVs), mild hybrid electric vehicles (MHEVs), and plug-in hybrid electric vehicles (PHEVs) in Canada and the U.S.

According to the report, Canadian repair costs for MHEVs average $5,302 per claim, compared to $4,958 for vehicles with internal combustion engines (ICEs). The gap widens significantly when looking at PHEVs and BEVs, with average repair costs of $5,665 and $6,534, respectively.

In the U.S., the gap between MHEVs and ICEs was much smaller with repair costs coming in at $4,726 for hybrids, compared to $4,806 for ICE. PHEVs came in at $5,059 and BEVs at $5,753.

“Like BEVs, [PHEVs] can be costlier to repair after a collision when compared to their internal combustion engine, or ICE, counterparts,” observed Ryan Mandell, Mitchell’s director of claims performance. “However, with both an ICE and small electric battery, mild hybrids are remarkably similar to gasoline-only powered automobiles when it comes to claims severity.”

As seen above, repair costs for hybrids and electric vehicles in Canada are notably higher than in the United States. For example, while the average repair cost for a BEV in the U.S. stands at $5,753, Canadian BEV repairs average $6,534 — a difference of nearly $800.

Looking at total loss frequency, BEVs and 2021 and newer gasoline-powered vehicles in Canada show similar numbers, with BEVs at 7.24 per cent and ICE vehicles at 8.52 per cent. This is slightly lower than the U.S. figures, where BEVs and ICE vehicles have total loss frequencies of 9.16 per cent and 9.45 per cent, respectively.

The report also found that BEVs require a higher average number of mechanical labour hours in collision-damage estimates (8.18 per cent) compared to ICE vehicles (5.21 per cent). However, BEVs are less likely to need frame labour, indicating that their design may be more effective in preventing structural damage during collisions.

Original equipment manufacturer parts are used significantly more in BEV repairs, accounting for 89 per cent of the parts dollars on repairable BEVs, compared to 65 per cent for ICE vehicles, Mitchell found.

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The transition to electrification is taking shape at different rates across North America.

In an IMR survey that interviewed 5,000 independent repair shops across the U.S., nearly all (96 per cent) of those automotive shops had seen an increase in EV servicing over the past two years. More than half (54.6 per cent) of those shops also indicated that a portion of their business was from servicing battery electric vehicles. In Canada specifically, zero-emission vehicles account for one in nine new vehicles registered.

Although shops are seeing an upward trend in EV servicing needs, about three in five (59 per cent) of shops have not invested in training that focuses on EVs, and only 43 per cent of shops surveyed have invested in the tools and equipment needed to specifically service electric and hybrid vehicles. Larger shops have made more investments in tools, equipment and training (57 per cent) than smaller shops have (10 per cent).

Shops that provide EV training and certification opportunities to their technicians and invest in the necessary equipment and tools to provide quality EV service will have greater business and profit potential as EVs continue to grow in popularity over the next decade.

EV education and training

Providing EV training and further education opportunities for shop staff is a crucial step to remain competitive in an ever-changing market. Younger generations of shop technicians will especially benefit from further EV education, as skills related to EV will prove essential to their careers.

Shops should immerse themselves in the diagnostic and repair techniques required to properly service EVs and gain hands-on experience to expand their skill sets. This can include inviting a professional trainer to the shop to discuss the fundamentals of electric vehicles, electric motor concepts, power electronics, maintenance and other troubleshooting topics.

When it comes to EVs, proper safety training is also important considering the higher voltage compared to ICE vehicles. To ensure shop owners are properly training their technicians in a safe environment, they should invest in training programs that offer virtual and in-person courses where attendees have access to specific training tools.

Once a shop’s staff is fully trained, it’s important the shop communicates and markets its EV service capabilities and certifications to returning and potential customers.

Providing EV training and further education opportunities for shop staff is a crucial step to remain competitive in an ever-changing market.

Tools and equipment

As shops begin to invest in EV equipment and tools, investing in safety equipment — like zero isolation gloves, warning signs and other protective gear — should be prioritized first. EVs bring new safety challenges that have not historically existed when servicing ICE vehicles, and it’s imperative that technicians and shops are equipped with the right tools and equipment to safely address customer needs.

Investing in the proper tools and equipment needed to diagnose and troubleshoot EVs is the next essential step toward growing a shop’s EV servicing capabilities. The most modern EVs have fully integrated software and control systems. Rather than individual controllers for each function, there may be one computer or zone controller that manages multiple systems.

Diagnostic scan tools that offer a wide range of vehicle coverage and scan for codes, read live vehicle data, run tests, view wiring diagrams and check battery charge are crucial to diagnosing issues in EVs — especially when considering the enhanced software.

Other essential pieces of equipment include ADAS calibration equipment, EV charging stations, CAT III or CAT IV Safety Rated Multimeters for working on high-voltage vehicles and a battery tester for checking on a vehicle’s battery and charging systems. For more advanced EV service, shops can invest in an insulation tester to perform insulation and high-voltage electrical tests.

There is a much higher level of powertrain integration in most EVs, with many powertrain components integrated into a single assembly. For servicing and changing integrated components, the full powertrain and suspension must be dropped. Powertrain lifts, easy rollers, car dollies and rescue hooks will be essential for expert EV service.

It’s important to remember that, at the end of the day, it’s still a vehicle. Filters are filters, brakes are brakes, so on and so forth. There is plenty of overlap between ICE and EV service, lowering the barrier to entry for shops interested in expanding into EV coverage.

Shop owners who are skeptical may have reservations about making large investments when they aren’t seeing enough EVs to make it worthwhile. That said, savvy shop owners can get ahead of the trend while limiting their risk by prioritizing what they can now.

Now is the time to invest for success

While provinces like British Columbia and Quebec host some of the highest numbers of vehicle registrations, EV sentiment and adoption have increased across the country. In fact, a recent study has revealed that 80 per cent of EV skeptics will consider purchasing an EV in the next ten years.

However, like many vehicle service trends and innovations, rural areas will be slower to adopt compared to major population centers. Shop owners who are skeptical may have reservations about making large investments when they aren’t seeing enough EVs to make it worthwhile. That said, savvy shop owners can get ahead of the trend while limiting their risk by prioritizing what they can now.

EVs have arrived — and are only becoming more prevalent. Investing in tools and equipment now that can be used when servicing both ICE and EVs will prepare shops for the inevitable influx of EVs in the future and offer a competitive edge in terms of service capabilities. Training is essential, yet only 3 per cent of technicians say they’re trained on servicing EVs.

Shops that prioritize training and preparation now will be in a better position to effectively and successfully address EV service needs in the long run.

Jeff Hudnut and Jennifer Grabowski are product managers at Bosch Mobility Aftermarket. The Bosch EV Training Tour features multiple training devices — including a training aid car that simulates diagnosing and repairing an EV battery and motor without exposure to a live, high-voltage battery.

This article originally appeared in the Summer 2024 issue of EV World

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The future of the relatively new trade agreement in North America is in question as trade concerns and the shadow of China relations loom large, an industry government relations expert warned.

Ann Wilson, senior vice president of government affairs for MEMA, shed light on the impending renegotiation of the United States-Mexico-Canada Agreement and its potential implications for the automotive aftermarket. During the Advocacy Town Hall during the MEMA Aftermarket Suppliers Vision Conference in Detroit this year, she highlighted the intertwined issues of USMCA renegotiation and the growing presence of Chinese suppliers in Mexico, emphasizing the complex dynamics at play.

The North American Free Trade Agreement (NAFTA) was renegotiated and transformed into the USMCA, which came into effect on July 1, 2020. The USMCA was designed to include updated provisions to address modern trade issues, ranging from digital trade to intellectual property to labour standards.

The deal is up for renegotiation in 2026.

However, Wilson noted the critical intersection of this renegotiation with the increasing number of Chinese suppliers in Mexico. “You see how these two issues are going to be interwoven. And how this government — the Biden administration, the Trump administration, Congress — is going to find lots of different ways not just to tariff products from China, but potentially prohibit the importation of those products overall,” she said.

While the content dispute resolution that the U.S. lost to Canada and Mexico early last year was primarily an OE issue, it has broader implications for the automotive sector, Wilson explained.

“Canada, the United States and Mexico had to have a dispute resolution [last] year, where they talked about the amount of content that would be considered USMCA content so you don’t have to pay tariffs on it. And this was for motor vehicles. The United States lost that battle because they wanted more U.S. content,” she explained in a simplified version of the conflict.

There is growing sentiment in the U.S. political landscape that trade might not be beneficial for the country, Wilson noted.

“And what we’re trying to say is, we’re pro-North America,” Wilson emphasized.

She argued that the North American auto industry is vital for competing globally against regions like Europe and Asia, including China.

A contentious renegotiation process for USMCA in 2026 can be anticipated, according to Wilson, and it may involve complex political agendas from all three countries.

“It’s going to be a fight. It’s going to be a fight within the United States. The ambassador from Canada, they have their own political agenda here, too,” she said.

Wilson noted that the renegotiation could potentially open up significant changes, especially for Canada. “So I think all three countries are preparing for a massive new look at USMCA in 2026.”

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Consumers have many concerns about electric vehicles. After the high cost to purchase, range and public charging infrastructure are the main holdbacks according to various surveys.

One of the most recent ones comes from the 2024 Mobility Trend Report from Volvo Car Canada. It reported that even though 64 per cent of Canadians are looking at an EV for their next vehicle purchase, 65 per cent are worried they will get stranded if they run out of charge. Furthermore, 59 per cent say there are not enough places to charge an EV.

On top of that, nearly four in five (78 per cent) agree there currently isn’t enough publicly available charging infrastructure to make EVs a good option for them.

As a result, industry leaders have repeatedly urged would-be shoppers to consider their daily use case — if they use a vehicle for their commute to work or short trips around town, an EV can generally fit seamlessly into their lives. But for those who prefer road trips of long distances, having a gas-powered vehicle at least as a secondary option is still recommended.

But can road trips still be done with an EV? EV World editor Adam Malik had the chance to find out. Vehicle sharing company Turo offered him the opportunity to use its services to try out an EV. He browsed through its offerings and found a Tesla Model Y. He booked it and had the vehicle delivered to him at his house.

He shared his experience of being on the road with an EV, what he encountered and what he learned.

EVW: Tell us about the trip you took

AM: I was heading to Detroit, Michigan, for the MEMA Aftermarket Suppliers Vision Conference. Being in Toronto, it’s a relatively close trip — a 400-km drive. When Turo approached me to try out its service and vehicles, I thought this was a perfect opportunity to take an EV on an extended trip. I write a lot about the EV market. I talk a lot about EV trends. But other than test drives, I’ve never actually driven an EV for an extended period of time.

I ended up choosing a Tesla because it’s the most popular brand out there today. So I decided to give them a shot.

I got the vehicle early in the morning of the day of my trip. I took it for a short drive around my neighbourhood just to get used to it, especially the braking because that is a major difference from using an internal combustion engine vehicle. You take your foot off the pedal and it’s just the same as hitting the brakes. So, I got used to the feel of it and then I hit the road.

So I was mentally prepared for all scenarios. I didn’t know where I’d be stopping off to recharge, if the chargers would work, how long I’d wait.

EVW: Were you nervous about taking a road trip in an EV?

AM: Definitely. You hear both sides. You hear about the people who do it regularly without issue and how much they love the experience. I know people who’ve driven from Ottawa to Toronto regularly without a problem, which is about as far as Toronto to Detroit. Then you hear about those who are frustrated with having to stop to charge and the waiting around. You hear about broken charging stations. All of that.

So I was mentally prepared for all scenarios. I didn’t know where I’d be stopping to recharge, if the chargers would work, how long I’d wait.

But I have to hand it to my Turo host — he showed me how to navigate the system and put me at ease. I can only speak to the Tesla experience as well — but it was good at showing me where I needed to stop to charge up.

EVW: What were your first impressions?

AM: I had two main first impressions. One was just being in an electric vehicle and one was being in a Tesla. Being in an EV, it was cool. It really was a great experience. It was a fun car to drive. The feel of it is different. You don’t have the changing of the gears, which wasn’t new since I’ve noticed that in test drives, so I knew that was coming — but just having that constantly during my drive was interesting. Other than that, it was really just like driving a regular vehicle. You’re still turning a steering wheel. That doesn’t change.

The second impression was being in a Tesla, a non-traditional automaker, versus an EV that is built by a car company. It felt like being in a Tesla was being in something that was technology-focused with a car wrapped around it. And I wonder if being in say, a Ford Mach-E or a Hyundai Ionic 5, if it would feel like a car wrapped around technology, if that makes sense. It felt like the technology came first and the car was second in a Tesla, which led to some quirky user experiences.

EVW: What was the driving experience like?

AM: It was very fun, perhaps not dissimilar to a high-end sports car with the handling and the power, the speed. With the way the EVs hug a corner, the low centre of gravity, you do feel that when you’re taking those tight turns. You realize you can take them a little more aggressively than you would in a typical combustion engine vehicle.

Beyond that, it’s just like an ICE vehicle. There’s still a steering wheel, there’s still a switch for the blinker, there’s a ‘gas’ pedal.

But being a Tesla, the full self-driving was an option. And I got to use that and that really to me was the biggest eye-opener of being in a Tesla — not in an EV, but in a Tesla specifically.

It was incredibly cool but also incredibly scary at the same time when thinking about where the technology is at with self-driving. It was good in the sense that it acted like a very cautious driver. It took those turns very carefully. I tried it at a stoplight. I was turning left and the car coming in the other direction was also turning left with no other vehicles. Under normal circumstances with human drivers, I would go left, the other driver would go left at the same time and we go on our way. What the Tesla did was make sure that car turned left and then it proceeded to make the left turn. So it was very careful. It was an interesting experience.

EVW: You mentioned quirky Tesla interactions. What were those?

AM: Like I said, a Tesla felt like technology wrapped around a car. Like the wipers — they were completely not in tune with the weather most of the time. It was sprinkling rain and the auto-sensor thought it was a hurricane. The wipers were just going back and forth so fast.

How a typical car puts your vehicle info in the dashboard in front of you, Tesla puts it in the centre. So you have to look away from the road to see their giant tablet of info. With the self-driving mode, it would ask you to tug on the wheel slightly so that it knows you’re there. But to see the notification, you have to turn your head slightly. There are also cameras inside the car to make sure you’re not falling asleep. So look away at the screen long enough and it sends a warning that you’re not looking at the road. So what is it? What do you want from me? You’re in this circle of trying to look at the road while also trying to peek at the notification, only to be told to pay attention to the road.

So quirky things like that of being in the Tesla where I wonder how it is in other EVs by traditional automakers who have a long history of making cars and know what drivers like.

The second impression was being in a Tesla, a non-traditional automaker, versus an EV that is built by a car company.

EVW: What was the charging experience like?

AM: I had no issues with charging. That was obviously my biggest fear because that’s all everybody seems to be scared about — is there charging infrastructure, what if I can’t find a charger, what if chargers are broken?

But I had no issues at all. I put my destination in as I went from Toronto to The Henry in Dearborn, Michigan. It gave me my route and said, ‘Here’s the route we’re going to take along the way. You’re going to stop off in London, Ontario, to recharge.” It showed me how long the charge would take. I could charge up enough to make it to my destination or I could do a full charge. Since I didn’t expect the hotel to have a charging station, I charged up as much as I could.

All three times I stopped to charge, the stations were in a plaza or mall parking lots. It took about a half hour each time to take the battery from a low state to that 80-90  per cent state. And a half-hour stop on a four-hour drive each way isn’t all that inconvenient. I stopped off, stretched my legs, grabbed a snack and away I went. I can see how on a multi-day trip, stopping every couple of hours can add a bunch of extra time to the journey. But a four-hour trip becoming four-and-a-half hours isn’t that big a deal.

Chargers were available and worked when the vehicle needed to be charged

EVW: Were the charging stations accommodating?

AM: Absolutely. Like I said, the stations were in centres where there was something to do. Funny enough, I think every other person who was charging was just hanging out in their cars, scrolling through their phones. Me being in the car for a couple of hours, I wanted to move around and so having the fast food restaurant, grocery store or coffee shop was great.

It makes me wonder about turning gas stations into charging stations. If someone is stopping for a half hour or even 15 minutes for a top-up, there needs to be something there to keep them or the kids entertained. Because that half hour can feel like an eternity with cranky kids in the back seat.

But for me, the stations were conveniently placed. I could see where maybe if you went to a remote area — I’m not sure how the charging infrastructure is if you’re going to northern Ontario or northern Michigan, or wherever it may be, how the infrastructure is up there. So I see how it could be tougher if that’s the case. But we certainly need more public infrastructure for those remote areas and those who don’t have charging at their home or in their condo buildings.

Home charging is also such an important piece of the discussion.

But the importance of home charging can’t be ignored. That way there’s less reliance on public infrastructure. If you have a house with a driveway, you should have a charger.

EVW: Why is home charging important?

AM: It ties into public charging. There’s talk of urging more grocery retailers, for example, to install charging stations because many people take their car there and they can charge up while shopping. But if you live in a condo or for whatever reason can’t install a home charger, those public stations being conveniently placed is essential.

For me, my trip could have been quicker if I had a charger at home. And cheaper — I spent probably $80 for all charging I think that will be essential going forward. If you want to have an EV but not a home charger, you’re depending on these public chargers to do the job for you. When you want to get home, you don’t want to worry about having to stop somewhere for however long to charge up — and pay a higher rate — and then go home.

But the importance of home charging can’t be ignored. That way there’s less reliance on public infrastructure. If you have a house with a driveway, you should have a charger. You don’t need to worry about finding a place to charge on your way home so you don’t have to find a spot the next time you head out.

But what about people in apartments and condos? They need a “home” charger. If not in their building, there needs to be a central spot close by where people can recharge. If you’re a daily commuter, you’re not going to need the charger every day. But you need easy access.

EVW: What do you see for the future of the EV discussion?

AM: I think the negative histrionics around EVs need to tone down. People are absolutely right — EVs in their current state are not ready for the mass market. But it certainly works for a solid portion. And the current costs of a new EV are hard to justify for most.

Still, it feels like many people are expecting EVs to be everything to all people and perfectly operational out of the womb. Nothing in the history of mankind has ever been produced like that. As with everything — microwaves, DVD players, smartphones — the costs, the user-friendliness, the capabilities are limited in the early stages. As time goes on, technology improves, costs calm down and more options become available.

I love a line someone used to describe EVs: Toddlers. We’re in the young stage of the evolution of EVs. There’s much room for improvement. Hopefully, as we get closer to the EV mandate years, we’ve improved a lot. Yeah, they’re not great for all kinds of road trips. But they do work for some, like the one I just took. It was extremely convenient. They’re good for your daily trips but not cross-country ones. And if you don’t have a convenient place to charge, then it’s not a great fit.

I think there’s reason to be excited for it. But we have to temper expectations and manage those expectations and see where we are now and match it to our needs. It’s still early.

This article originally appeared in the Summer 2024 issue of EV World

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Canadians saw a spike in automotive-related costs over the last few years, perhaps mostly in the used vehicle market. But those are starting to normalize — for the most part.

New vehicle supply shortages are mostly in the rearview mirror and the Bank of Canada has started to cut interest rates and that, according to DesRosiers Automotive Consultants, has dramatically changed the picture.

“To be sure, pockets of inflation persist,”  it noted in a recent analysis, noting the 8.1 per cent increase in passenger vehicle insurance premiums in June 2024 compared to June 2023, calling it “a key source of price growth.”

Passenger vehicle parts and maintenance also saw an increase, going up 3.5 per cent. It further noted that maintenance and repair services alone are seeing a 4.2 per cent increase, while parts inflation saw 2.9 per cent growth.

But the ‘repair vs replace’ gap might be narrowing, at least when looking at used vehicles. In this area, purchase prices have gone in the opposite direction, down 4.5 per cent compared to June 2023.

New vehicle prices are still up 1.8 per cent as more people buy SUVs and zero-emission vehicles, which cost more.

“It is clear that the automotive market is seeing countervailing forces at play,” said DesRosiers’ managing partner Andrew King. “The new and used markets are heading in different directions as industry dynamics reshuffle the landscape and the market works toward a new equilibrium.”

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A cheeky new ad campaign from Midas is warning vehicle owners about bad service (B.S.) from their auto repair professionals.

The Don’t Put Up With B.S. — the B.S. meaning ‘bad service’ — campaign comes after the company surveyed 2,000 people across North America and half of the respondents saying they’ve experienced bad service in auto care. Two-thirds reported that they’ve been mistreated in a repair shop at least once — they felt pushed into unneeded services, that they were being ripped off or pressured.

“We know that consumers are fed up with the bad service they experience in the auto care industry, and we’re not shying away from this problem, we’re tackling it head-on,” said Lenny Valentino, Jr., president and chief operating officer of Midas, which has nearly 2,100 franchised and licensed locations in 20 countries. About 1,200 of those locations are in Canada and the U.S.

The company recently rolled out a new training program for franchisees and their employees, outlining how shops can be better partners with customers, provide straightforward information — like what needs fixing now and what can wait — and work together to problem-solve car care solutions.

It’s new campaign will include a series of ads across streaming services, digital channels and social media. Out-of-home-boards in Toronto, Vancouver and other U.S. cities will also feature the campaign.

“The campaign conveys examples of the bad service consumers have faced in the auto repair industry, like being talked down to or forced to urgently make a decision, with humour and a call to inspire real change,” the announcement from Midas said.

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After a lackluster performance in June, July light vehicle sales in Canada bounced back.

Sales were up 11 per cent compared to 2023 levels during the same month. The gain was anticipated given the weak performance in July 2023 and a flat June 2024 due to a software outage, noted DesRosiers Automotive Consultants. The recovery is seen as a positive indicator for the market, it noted.

Despite the boost, overall sales for July 2024 were estimated at 161,000 units, which is still below the 170,000-185,000 units typically seen in pre-pandemic Julys.

Andrew King, managing partner at DesRosiers, noted the varied performance among automakers.

“What was of note in July was that performance varied widely by vehicle company, with some players recording sales declines while others enjoyed truly remarkable sales success,” he said.

The seasonally adjusted annual rate (SAAR) for July came in at 1.77 million — higher than any month in the second quarter but lower than all months in the first quarter. The back-and-forth, the consultancy noted, highlights the ongoing instability in the market. Analysts will be keeping an eye on how August will perform to gauge if stability will return.

This performance comes off a flat June performance, a disappointment after several months of strong gains. The optimism for July was partially fueled by the expectation of deferred sales due to the June software outage and a weaker comparative month in 2023.

Automakers have faced numerous challenges, including supply chain disruptions and fluctuating demand tis year. However, the July sales boost suggests a potential turning point. Notably, the report emphasized that while some manufacturers struggled, others capitalized on the market conditions to achieve significant sales increases.

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As distracted and drug-impaired driving fatalities climb, the Traffic Injury Research Foundation (TIRF) is sounding the alarm on urgent road safety challenges in two revealing new reports.

In Distraction-Related Fatal Collisions, 2000-2021 and Drug Use in Fatal Collisions, 2000-2021, funded by Desjardins Insurance, findings from TIRF’s National Fatality Database emphasize the urgent need to tackle these road safety issues.

“Although distracted driving-related fatalities have declined over the years, the percentage of all fatalities attributed to distraction has increased,” said Steve Brown, TIRF research associate. “The data also highlights a troubling rise in drug-related road deaths, with a significant increase in fatalities where at least one driver tested positive for drugs.”

The data showed that distraction-related fatalities rose to 28.8 per cent in 2021 from 19.1 per cent in 2000. Younger drivers (16-19 years old) and older drivers (65 and older) were the most likely to have been distracted, with percentages at 20.6 per cent and 20.4 per cent, respectively. During the same period, commercial vehicle drivers were nearly twice as likely to be distracted compared to motorcyclists (25.6 per cent vs. 13.1 per cent) and more so than drivers of automobiles (16.5 per cent) and light trucks (17.5 per cent).

In 2021, there were 359 fatalities in crashes where at least one driver was distracted, down from 458 in 2000. Despite the decrease in absolute numbers, the proportion of road fatalities due to distraction rose to 28.8 per cent in 2021 from 19.1 per cent in 2000. This indicates that while overall road safety may have improved, distracted driving remains a persistent issue, requiring targeted interventions.

Drug-related fatalities have also seen a dramatic increase. In 2021, there were 496 fatalities in crashes where at least one driver tested positive for drugs, compared to 230 in 2000. The percentage of drug-related traffic fatalities jumped to 37 per cent in 2021 from 10.7 per cent in 2000. Since 2013, collisions involving a drug-impaired driver have surpassed those involving alcohol, distraction, or other factors. Drivers aged 20-34 had the highest percentage of positive drug tests at 61.1 per cent, highlighting the need for focused education and enforcement among this demographic.

Interestingly, drug-related fatalities were less common in vehicles with multiple occupants than those with a single occupant, suggesting that drivers with passengers might feel more responsible for their safety. Conversely, distraction-related fatalities were higher in crashes involving vehicles with multiple occupants, indicating a need for increased passenger education about the dangers of riding with distracted drivers.

“Understanding the nuances of distracted and drug-impaired driving can help tailor enforcement and education efforts to better reach target audiences,” says Ward Vanlaar, TIRF’s chief operating officer. “General messages may not be effective, especially if people don’t recognize their distraction or impairment. Additionally, educating passengers about the risks of riding with distracted or impaired drivers needs more emphasis and reinforcement.”

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Improperly valuing how much rent you charge to yourself as the landowner and shop owner can mistakenly impact your financials when looking to sell your business.

Rent considerations are essential when looking to either buy or sell an auto repair shop. It could be the make or break of a deal.

A shop owner who also owns the land is likely giving themselves a large break on rent. This can cause significant issues, warned Hunt Demarest, accountant and business valuator with accounting firm Paar Melis, which deals exclusively with the automotive aftermarket.

The shop owner could be charging rent at a land value that was done 10, 20 or 30 years ago. When was the last time the shop owner had an appraisal done? Land values have shot up in recent times so that rental payment that was figured out decades years ago may be out of whack today.

Because if a shop owner is serious about selling, they need to figure out the fair market value of renting that property if they keep the land in the transaction. The buyer’s rental payment could double. So that information needs to be in the financial documents, Demarest said during the session Transitioning Your Business at the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo in Kansas City.

“So even though it looks like his business was profitable … it was severely, severely diminished” once the proper rent calculations are added in, he explained.

If it ends up that rent should be doubled, the buyer will now be paying that new amount. The shop’s profitability going forward isn’t what was thought to be believed from the onset of negotiations.

“From a tax perspective, nine times out of 10, how much you pay yourself in rent does not save money on taxes, does not make you money on taxes, it has no bearing in mind,” Demarest said. “You are literally taking money out of your right pocket, putting it in your left pocket.”

What a shop owner should be doing is paying rent at fair market value at all times. This is more attractive to the buyer because they see what the rent’s been for the last five years and have a good idea of what their expenses will be.

Furthermore, shop owners typically build their businesses to make enough money to cover their expenses. So if a shop marks down its rent as $150,000 when it should be $300,000, there’s a gap that’s not being covered.

And if the rent is kept low for the new buyer, the seller isn’t getting proper value for their shop.

“So if I’m a new person, I’m coming into the shop, I’m buying a shop that does $1.5 million a year that I have to commit $300,000 of that to rent, [that’s] 20 per cent,” Demarest said.

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Electric vehicle news has been bleak in early 2024, with reports of a market downturn and OEMs scaling back plans. This might suggest EVs are beyond their hype, but a closer look from IDTechEx might point to a different story.

From 2015 to 2023, electric car sales showed robust growth, even during the COVID-19 pandemic. James Edmondson, research director at IDTechEx, noted that his group’s research found that EV sales have averaged 50 per cent growth annually, with a 38 per cent increase from 2022 to 2023.

The International Energy Agency (IEA) reported a 20 per cent decrease in EV sales in Q1 2024 compared to Q4 2023, but this is part of a consistent trend of lower Q1 sales each year.

Notably, Q1 sales have increased year-on-year, with a 30 per cent rise in Q1 2024 compared to Q1 2023. Electric car sales have also increased in all regions compared to the same period last year.

While EV sales growth has slowed, this is expected as the market matures, Edmonson pointed out.

“It is not possible to have exponential growth forever; the sales of EVs are growing into an existing (and limited) automotive market,” he said.

Despite strong growth, media reports often highlight the downturn, making failure seem more newsworthy than continued success, Edmonson observed. Some production and component scalebacks are due to overinvestment and slower-than-expected growth rates, coupled with automakers striving to make their EV platforms more profitable.

That said, he pointed out that legitimate concerns remain about further EV adoption. One major limitation is the lack of affordable EV models. Although some EVs are available at or below the average car price, electric versions are often more expensive than their combustion counterparts, with few options below $35,000 in western markets.

Charging infrastructure also plays a critical role in consumer adoption, Edmonson noted. Most EV owners charge at home overnight, but the sight of closed public chargers can be off-putting. Innovations like chargers in lamp posts and parking garages are emerging, but widespread adoption depends on housing providers, authorities, and charging network providers to install and maintain these systems. Consumers without access to a driveway or garage face significant hurdles and are more likely to need lower-priced vehicles, which are still scarce, he said.

“Despite the above concerns, EV sales continue to grow, and impending combustion engine bans are unlikely to be pushed further back,” Edmonson explained. “Demand is still present, but lower upfront cost models need to be available to fully address the automotive market’s potential.”

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With the rising cost of living impacting Canadians’ ability to afford transportation, a recent survey found significant shifts in consumer behaviour and preferences in the automotive market.

A recent Léger survey commissioned by Toyota Canada found that 59 per cent of Canadians find vehicle ownership less financially achievable today compared to their parents’ generation. This sentiment is even stronger in British Columbia, where over two-thirds of respondents feel the financial pressure acutely.

As a result, 66 per cent of Canadians have changed their approach to vehicle ownership in the past year, opting to delay purchasing new vehicles (31 per cent) or choosing used vehicles instead (27 per cent). Younger drivers, aged 18-34, are particularly impacted, with 31 per cent preferring used vehicles, compared to 23 per cent of those aged 55 and older.

“At a time when Canadians are grappling with financial pressures, how to best spend their automotive dollars for long-term value becomes even more important,” said Stephen Beatty, vice president of corporate at Toyota Canada. “This decision goes beyond the new car purchase to consider operating and maintenance costs as well as resale value down the road.”

In response to these findings, Beatty emphasizes the importance of automakers focusing on delivering high value throughout the ownership lifecycle.

Furthermore, most (56 per cent) of Canadians are addressing affordability concerns by either cancelling or delaying at least one major purchase. The most affected areas include travel (34 per cent), personal vehicles (21 per cent), and home renovations (20 per cent). Alberta (66 per cent), Manitoba and Saskatchewan (61 per cent), and British Columbia (58 per cent), report the highest percentages of delayed purchases.

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If there’s one issue that’s going to change the automotive aftermarket more than anything, it’s the economic and political relationship between the United States and China, an industry advocate predicted.

At the MEMA Aftermarket Suppliers Vision Conference in Detroit, Ann Wilson, senior vice president of government affairs for MEMA, delivered a critical analysis of the evolving economic relationship between the two countries and underscored the significant implications of ongoing and potential future tariffs, as well as the challenges posed by tariff evasion and the increasing presence of Chinese suppliers in North America.

In short, it’s a complex landscape to navigate and aftermarket suppliers must be prepared to respond to these geopolitical and economic developments.

Wilson emphasized the likely continuation and expansion of the Section 301 tariffs under the Biden administration. These tariffs are trade sanctions imposed by the U.S. on various Chinese goods in response to Chinese trade practices, including intellectual property theft and forced technology transfer. They kicked in under then-president Donald Trump in 2018, affecting a wide range of products and aimed to pressure China into making trade policy changes beneficial to the U.S.

It wouldn’t surprise Murray to not only see the tariffs continue but possibly expand should Democrats win the November election. “President Trump has already said that, if he’s in office, he’s going to expand some of those tariffs to 50 per cent,” she added.

Steel and aluminum tariffs are currently at 25 per cent.

Wilson highlighted the problem of tariff evasion, describing a practice where parts are shipped from China to Thailand, repackaged and then imported into the United States.

“Folks, that is not substantial transformational of a part. That’s fraud and it’s against the law. And we’ve seen the Department of Justice really hone in on that,” she stated.

‘Substantial transformation’ is a concept to determine a product’s country of origin for tariff purposes. Substantial transformation is considered to have taken place when a product, such as an automotive part, goes through significant manufacturing or processing in a country, changing its name, character or use. For example, auto parts from various countries assembled into a functional vehicle in another country might be considered substantially transformed. This would alter its origin for tariff classification. But, as Wilson pointed out, simply changing the box it comes in does not qualify.

Furthermore, the shifting landscape includes a notable increase in Chinese suppliers setting up operations in Mexico. “We have some members who are vehemently opposed to this and want us to do something — that something has yet to be defined, but they want us to do something,” Wilson noted.

She added, however, that other members are more accepting as long as the competition remains fair and everyone plays by the same rules.

Wilson pointed out that the U.S. government is considering a more stringent approach beyond tariffs. “What the government is really looking at is, we’re not just going to tariff goods coming from China, either through Mexico, Thailand or anyplace else — we’re going to prohibit them,” she explained.

This could have far-reaching consequences, particularly in areas involving advanced automotive technologies.

“So what they’re saying on information technology is, ‘If you’re part of this list, we’re going to prohibit the ability to bring that technology into the United States,’” Wilson said.

She highlighted that this prohibition could affect a wide range of automotive technologies, not just fully automated vehicles.

“Keep in mind, in that list of things like (automated emergency braking), lane keeping devices, backup cameras,” Wilson said, noting the political pressure to ban the importation of Chinese electric vehicles as a driving factor.

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After years of soaring auto theft rates, Canada is finally seeing a decline. The latest report from Équité Association, the national group for insurance crime, found a 17 per cent drop in auto theft during the first half of 2024 compared to the same period in 2023.

The group credited the significant decrease in thefts as being the result of the combined efforts of the insurance industry, federal and provincial governments, law enforcement agencies and the Canada Border Services Agency (CBSA). Despite this early success, the association emphasize the need for continued vigilance to sustain this downward trend.

“We’re seeing some early signs of progress in cracking down on auto theft thanks to the measures implemented, but there’s no room for complacency,” said Bryan Gast, vice president of investigative services at Équité Association. “The momentum established in the first half of 2024 has been critical in identifying impactful solutions.”

Public Safety Canada’s National Summit on Combatting Auto Theft and the subsequent National Action Plan have played pivotal roles in these positive developments, the group highlighted. However, it noted that ongoing efforts are necessary to ensure the safety of Canadian communities and prevent future vehicle thefts.

Regional Trends

• Ontario and Quebec: Both provinces reported the most substantial declines, with Ontario down 14 per cent and Quebec down 36 per cent. SUVs remain the most targeted vehicles.
• Alberta: Experienced a 5 per cent decrease in auto thefts, with trucks being the primary targets.
• Atlantic Canada: Saw an 11 per cent increase, likely due to heightened anti-theft measures in Ontario and Quebec pushing thieves to other regions. Cars from model years 2010-2016 are the most stolen category.

The regions with historically high theft rates have seen the most significant improvements, the report highlighted. The reduction in Ontario and Quebec has created a ripple effect, leading to declines in other provinces as well, the group said.

Focus on Prevention

“To continue the national decrease in auto theft, there must be a shift from recovering stolen vehicles to preventing vehicles from being stolen in the first place,” said Terri O’Brien, president and CEO of Équité Association. She highlighted the role of auto manufacturers in utilizing existing anti-theft technologies to enhance vehicle security.

New standards, such as the UL Standards & Engagement’s (ULSE) updated Standard for Automobile Theft Deterrent Equipment and Systems, offer a roadmap for manufacturers to incorporate effective anti-theft devices in all new vehicles.

While the early 2024 decline in auto theft is encouraging, Équité Association stressed that continued collaboration and innovation are essential to maintain and build on this progress.

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A sense of normalcy is returning to the Canadian market and the automotive sector stands to benefit, according to an industry observer.

Speaking at AIA Canada’s National Conference in April, Todd Campau gave an optimistic yet cautious outlook on the Canadian economy and its impact on the automotive aftermarket sector.

The aftermarket practice lead at S&P Global Mobility noted that Canada is gradually emerging from the challenges brought on by the pandemic.

“In general, Canada is starting to come out of a lot of the pandemic-era issues. It’s not back to normal. But we’re starting to see normal factors are beginning to drive the business again,” Campau said.

The supply chain is showing signs of recovery. While issues such as unemployment persist, Campau suggested that Canada might be slightly ahead of the U.S. in overcoming these economic hurdles.

“We’re starting to see inflation in Canada softening. We’re starting to see the GDP return part of normal. All in all, I think it’s good,” he added.

Canada has seen two interest rate cuts recently, dropping the lending rate to 4.5 per cent. The improving economic conditions have positive implications for the aftermarket sector but Campau warned that the labour market continues to be tight.

“But it seems like we’re getting back towards normal behaviour. And so I think that’s good for the aftermarket,” Campau said.

However, he acknowledged that inflation and high costs remain ongoing concerns. That said, these factors can benefit the aftermarket by delaying new vehicle purchases, leading consumers to repair their existing vehicles.

“If they’re delayed in vehicle purchases, people have to repair the vehicles in their driveway now,” Campau explained. “We are happy to help with that as the aftermarket.”

Turning to new vehicle sales in Canada, Campau observed a slow but steady progress toward pre-pandemic levels. “We’re not back to the pre-2020 models, but we are moving in the right direction,” he said.

Campau expressed confidence that Canada could surpass the two million unit sales threshold again in three to four years. In a follow-up after the conference, he was what would be key factors to driving new vehicle sales back to a point not seen since 2017.

“I think it is the confluence of all the factors: More of a return to normal market drivers, lowering exchange rates, reduction in inflation and interest rate costs reducing,” he told Auto Service World. “I think all of those factors combined will serve as the catalyst for the return toward two million sales, potentially additional acceptance of EVs too and some lower cost options coming to market.

Campau doesn’t think pent-up demand will be a driving force behind increased sales, “but rather a return to a more ‘friendly’ economic environment for new vehicle sales.”

Yet, this recovery is not without its challenges.

“It has been a little bit slow in coming. This is not unique to Canada. This is the story across the board,” Campau noted during the session, referring to similar trends in the U.S.

Campau emphasized the delicate balance of factors that influence the aftermarket.

“One of the things that I think I personally learned is that it’s such a confluence of factors that drive the aftermarket. And maybe uniquely so because we repair the vehicle for its whole life cycle,” he said.

The current trajectory is promising, but the situation remains fragile, Campau warned. “If we see big inflation, if we see big unemployment happening again, if costs stay high, this could get muted.”

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As the world increasingly embraces e-commerce, a research and advisory firm is predicting a sharp rise in global online retail sales by 2028, emphasizing the need for retailers to refine their omnichannel strategies.

But Canada may not grow as quickly due to some bigger hurdles than other countries, specifically the U.S.

Forrester predicted that total global online retail sales will grow from USD$4.4 trillion in 2023 to $6.8 trillion by 2028, reflecting an 8.9 per cent compound annual growth rate (CAGR). The report, Global Retail E-Commerce Forecast, 2024 To 2028, provided a five-year forecast for total, online and offline retail sales across 40 countries around the world.

Despite the substantial growth in e-commerce, the report indicates that 76 per cent (or $21.9 trillion) of global retail sales will still occur offline in 2028. Consequently, retailers must continue investing in omnichannel strategies to ensure a seamless shopping experience both online and offline.

The report further highlights the varying maturity levels of retail e-commerce globally. Advanced economies like the U.S., the U.K. and South Korea exhibit more maturity due to higher internet penetration and digital literacy. However, as smartphone adoption and mobile commerce become more widespread, emerging markets in Asia Pacific, Eastern Europe, and Latin America are rapidly catching up.

This swift adaptation is reshaping the global e-commerce landscape, offering new opportunities for businesses and consumers alike.

Looking ahead to 2024 and beyond, Forrester anticipates continued growth momentum for online retail sales worldwide. In the Americas specifically, online retail sales in the U.S. are projected to reach $1.6 trillion by 2028, accounting for 28 per cent of total retail sales in the country.

However, e-commerce is more mature in the U.S. compared to Canada, where online retail sales are expected to reach $83 billion by 2028. Forrester’s announcement noted that Canada lags behind the U.S. in e-commerce penetration due to lower population density, a smaller market size, and slower consumer adoption.

In Latin America, online retail sales in the top six countries — Brazil, Mexico, Argentina, Colombia, Peru and Chile — are expected to grow from $109 billion in 2023 to $192 billion by 2028.

“The growth of online marketplaces, social commerce, livestream selling, and direct-to-consumer commerce will accelerate global online retail sales growth over the next five years,” said Jitender Miglani, principal forecast analyst at Forrester. “However, e-commerce maturity and growth opportunities vary vastly by region. Retailers and brands must therefore have a thorough understanding of the key drivers of retail and e-commerce growth in their priority markets and tailor their strategies appropriately to succeed.”

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If the trends in built-to-order vehicles are any indication, Canadians are willing to wait for the vehicles they want.

Amid the semiconductor shortage of 2021-23, a significant trend emerged in the Canadian automotive market: build-to-order (BTO) vehicle purchases. This trend, already popularized by new entrants like Tesla, gained traction as dealer inventories dwindled.

So what’s the area like these days? DesRosiers Automotive Consultants surveyed dealers and consumers to find out.

The group found that Canadian consumers are open to waiting for their vehicles. Only 10.1 per cent of respondents are willing to wait less than a week, while 55.7 per cent are prepared to wait over a month. Notably, 22.6 per cent are willing to wait more than three months. Dealers also see a lasting role for BTO, predicting that by 2030, 45.3 per cent of vehicle sales will be build-to-order, with traditional inventory sales comprising 54.7 per cent.

This shift towards BTO reflects a significant change in consumer behavior and dealer strategy, suggesting a new era in the automotive market.

“Consumers are clearly willing to wait a reasonable amount of time to take delivery of their desired vehicle,” said Andrew King, Managing Partner at DAC. He emphasized that, given efficient supply chains and timely deliveries, extensive on-ground inventory is not essential for meeting consumer demand.

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Retail sales of automotive aftermarket products are up 2 per cent through the first five months of the year but unit demand remained flat.

That said, erratic weather patterns led to a strong January, complicating year-to-date performance as a reliable indicator for the rest of the year, according to Circana’s latest Future of Auto report. As a result, industry performance is expected to slow, resulting in generally flat sales compared to 2023.

“Fundamental consumer behaviour shifts took root at the macro level in 2020 and 2021 and they are still benefitting the retail automotive aftermarket,” said Nathan Shipley, automotive industry analyst for Circana. “While the aftermarket continues to be one of the strongest performing industries tracked by Circana, demand is softening a bit as macroeconomic factors impact consumers across the board.”

He pointed to food prices as being more than 30 per cent higher than in 20019.

“These kinds of dynamics are impacting spending and maintenance behaviour among vehicle owners, particularly the lower income consumers that are more likely to drive older cars and conduct their own maintenance,” he added.

There is minimal growth in average selling prices expected for the auto care sector this year, estimated at just 0.4% in the U.S. This will be driven by both deepening promotional activity and consumer trade-down at the shelf, Circana’s report said. Coupled with flat unit demand, the overall sales revenue of the industry will be impacted.

The largest source of volume growth in the year ahead is projected to be in chemicals, additives, and fluids, which will generate a 2 per cent increase in dollar gains in 2024. Discretionary categories, including products meant to accessorize or clean the vehicle, will be among the worst performers this year.

“The direction of work-from-home trends and new car sales are the two largest factors for the auto aftermarket to watch over the next year,” Shipley said. “The potential for shifts in these trends, combined with softening prices across retail, will make it critical for aftermarket manufacturers and retailers to emphasize their value with consumers as competition heats up for their still financially challenged budgets.”

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Vehicles are getting older but the pace it’s happening is expected to slow down soon enough. Sedans are fading into the sunset. Electric vehicle sedans could also follow the same path.

Those are some of the trends taking place in the automotive sector. And while the demise of sedans has been an ongoing trend for some time, Todd Campau, aftermarket practice lead at S&P Global Mobility, pointed out that light trucks could be the next area of growth in the electric market.

Speaking during the Three Dragons session at the MEMA Aftermarket Suppliers Conference in Detroit, he noted that after average vehicle age’s jump this year, there may be one more increase left next year.

“And then it may start to plateau as we get back into normal cadence,” he predicted.

He also highlighted the demise of the passenger vehicle. In Canada, DesRosiers reported 86 per cent of new vehicle sales in 2023 were light trucks. In the U.S., it’s about 75 per cent.

“We’re really seeing the disappearance of the sedan,” Campau said.

However, he added, that’s not bad news for the automotive aftermarket.

“A lot more of these crossover utility vehicles do have all-wheel drive and other features that probably increase the overall ticket for repairing those vehicles and keep them on the road,” he observed. “So that probably is good news for the aftermarket in the long run.”

And this is a trend he expects to see take place in the electric vehicle market. Until recently, there haven’t been many options outside of passenger vehicles for EV customers. Even as more start becoming available these days, there are still not as many option as on the internal combustion engine side. But that will change soon enough.

“As we’re seeing light truck electric vehicles come into play, that’s what people are choosing on the EV side too,” Campau said.

The rate with EVs is about two light trucks for every passenger vehicle sold now.

“So as we’re seeing more [Tesla] Model X, Model Y, [Ford] Mach-E, Lightning [options], people are choosing EVs a little bit more,” Campau said.

And that means greater repair opportunities just as on the ICE vehicle side of things.

“On the EV side, I think they’re also actually demonstrating that they do need maintenance and repair. I think the news was a little bit early to say that EVs are not going to need any service and maintenance. We’re seeing that plug-in hybrids and EVs both require maintenance,” Campau said.

“So the biggest thing I think we’re going to see is more and more parts proliferation. We’re going to need more capability to repair diverse vehicles.”

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Recent data revealed that Canada is coming out ahead of its southern neighbour in the transition to battery electric vehicles (BEVs).

This trend is particularly evident in the early months of 2024, where provincial incentives and national policies have significantly boosted BEV registrations in Canada.

“Though it has been well reported that buyers in Europe and China have adopted BEVs more quickly than U.S. buyers, the same is true when looking at the U.S. versus Canada,” wrote Stephanie Brinley, associate director of AutoIntelligence at S&P Global Mobility, in an analysis posted online.

She pointed to the provincial incentives in Quebec and British Columbia helping propel a more rapid adoption of BEVs compared to the U.S., where state-level incentives have a less pronounced impact.

From January to April 2024, BEV registrations in Canada surged by 57 per cent compared to the same period in 2023, while plug-in hybrid electric vehicle (PHEV) registrations climbed by 75 per cent. In contrast, the U.S. saw a mere incremental increase of 25,000 more BEVs registered in the first four months of 2024 compared to the same period in 2023, a stark slowdown from the 137,000 unit increase observed from 2022 to 2023.

Canada’s national Incentive for Zero-Emission Vehicles (iZEV) provides a rebate of up to CA$5,000 for eligible EVs. This, combined with provincial incentives in B.C. and Quebec can reduce costs further, with Quebec providing up to CA$7,000 and British Columbia up to CA$4,000 for BEVs, depending on the buyer’s income and vehicle price. Ontario, however, does not offer additional incentives, relying solely on the national program.

However, changes are afoot. Quebec announced it will phase out rebates by reducing the amount offered and fully eliminating them by 2027. In B.C., changes to its rebate program mean 75 per cent of EVs won’t qualify for rebates, dealers said.

Yet, the impact of these incentives is evident, Brinly pointed out. Quebec alone accounted for 50.6 per cent of Canadian BEV registrations through April 2024, while British Columbia contributed 20.6 per cent. Ontario, with no additional incentives, captured only 22.5 per cent despite being the largest vehicle market in Canada.

The situation is quite different in the U.S., where state-level incentives vary significantly. California leads the charge with 34 per cent of U.S. BEV registrations from January to April 2024, thanks to its robust incentive programs and early adoption of stringent vehicle emission rules. Florida, without state-level incentives, still managed to secure 8 per cent of BEV registrations, while Texas, with a modest $2,500 incentive, accounted for 7 per cent.

“In the U.S., the states which offer incentives also have more varied programs, which presumably creates more variability in impact,” Brinley wrote.

California’s BEV registrations represent 21.4 per cent of total vehicle registrations in the state, far exceeding the national average of about 7 per cent. In comparison, Florida’s BEV registrations are closer to the national figure at 6.6 per cent, while Texas lags slightly at 5.2 per cent.

“There are a total of 15 states in the US offering some level of incentive on top of federal incentives, but BEV distribution in the US does still generally see the highest volume states in overall registrations also being the top BEV states,” Brinley wrote.

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The transition to electric vehicles can be done but the timeframe mandated by governments around the world may not make it possible to be done right, an automotive leader recently warned.

It’s all about creating a sustainable transition, Leila Afas, director of global public policy at Toyota Motor North America, said during the recent MEMA Aftermarket Suppliers Global Summit in Florida.

“We need to make sure we have the sourcing, we need to make sure we have the consumer adoption and we need to make sure that our supply base is able to transition,” she said.

The timing feels almost equivalent to a transition being made overnight to much of the public. What happens to parts makers when the average age of a vehicle in the U.S. is nearly 13 years and nearly 15 years in sub-Saharan Africa?

“So we still need to make these parts,” Afas said. “That’s a humanitarian issue — being able to replace and update these cars that are already there.”

Most people can’t afford the price of a new vehicle, or even a used one. EVs are generally priced higher than comparable ICE vehicles.

“It shows that it’s not [usually] by choice somebody drives a 25-year-old Toyota Corolla,” Afas pointed out. “So that’s the thing — we need to make sure that it’s sustainable.”

An attendee asked what would be a more realistic goal for electrification and if delaying it a handful of years would make a difference. Afas didn’t give a specific timeline but noted a change is likely necessary.

“The direction is there,” she said. “Let’s bend that slope a little more towards reality.”

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Canada’s run of 19 straight months of year-over-year increases in new vehicle sales came to an end in June. But industry observers at DesRosiers Automotive Consultants aren’t all that put off.

The 169,000 sales in June 2024 — dead even with the same time last year — probably could have come in higher if not for the devastating breach of CDK Global’s software, crippling dealerships from across North America from competing sales.

With dealers back online following the outage, interest rates cut and appearing to continue heading down and better OE incentives, there’s market momentum, DesRosiers’ analysis outlined. June’s seasonally adjusted annual rate came in at 1.72 million, a tick ahead of May, a “definitive positive,” said Andrew King, the consultancy’s managing partner.

“However, sales figures are still far below industry highs, with June sales exceeding 200,000 units in both 2018 and 2017,” he pointed out.

Year to date, the market is up 10.4 per cent compared to the first six months of 2023 with an estimated 924,000 vehicles sold. General Motors leads the market overall in volume with sales of close to 141,000 units during the first six months of the year. Volkswagen led the larger volume brands for percentage gain with sales up 54 per cent.

“Hopefully July will see a rebound from the software-related issues — with delayed sales being recovered quickly,” DesRosiers’ analysis said. “With interest rates starting a downward cycle and the inventory issues behind us, we will be watching closely to see how much momentum the market can hold on to as pent-up demand starts to wane.”

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Automotive technicians can expect plenty of opportunities to learn about advanced driver assistance systems, turbocharging, electrification and software diagnostics in the near future.

Those were the key topics Bob Cushing, president of Worldpac, highlighted as growing areas of specialized training as the automotive aftermarket rapidly evolves. These types of classes will be crucial in the coming years, he said during a question and answer session with members of the media at the Worldpac Supplier and Training Expo in Nashville.

Cushing highlighted the importance of adapting to new technologies that will be paramount for the future of automotive repair ad will be a focus for attendees.

“I would tell you there’s going to be plenty more classes on ADAS, for sure, as that continues to permeate basically [through] all the new cars that are being sold,” Cushing said.

ADAS, a critical component in modern vehicles, requires precise calibration and understanding to ensure driver safety, making it a vital area for continued education. He noted that some shop owners have already recognized the value of investing in ADAS training, considering it the best investment they ever made.

From left, Bob Cushing, Worldpac, and Shane O’Kelly, Advance Auto Parts, speak to the media at the 2024 Wordlpac STX event in Nashville

Turbocharging, another key area, will also see increased focus. As smaller engines become more prevalent, the ability to enhance performance through turbocharging becomes increasingly important, he noted.

“Turbocharging, that’s obviously key, as far as on what you’ll be able to do to boost horsepower [and be able to] do a lot of things on small engines,” Cushing explained.

Electrification of vehicles is another significant trend that will continue to shape future training programs. “You’ll see that electrification is clearly going to be there, for sure,” Cushing said.

He anticipated more car-line-specific classes on electric vehicles, in addition to general training. The high voltage systems in EVs pose significant risks, making it essential for technicians to understand how to safely work with these systems, Cushing noted.

Software-driven classes will be crucial as well, particularly for EVs.

“The No. 1 issue you have on EVs is software. I think that’s going to be another critically important part of dealing with diagnostics and software,” Cushing said.

With software being integral to the operation and maintenance of modern vehicles, proficiency in this area is essential, he added.

Cushing further emphasized the importance of calibration training.

“It’s all about teaching how to calibrate. So when we think about what classes, we’re going to have, oh boy, that’s one great particular topic to know about — calibration. How to look at it, how to get it right, and do all that,” he said.

The hesitancy of some shops to adopt these new technologies and training methods stems from the potential risks and costs involved. However, Cushing believes that as the industry evolves, more shops will recognize the necessity of these investments especially with the recognition of the importance of proper calibration to have accurate, functioning ADAS .

“The concern there is: A mistake could be costly,” he said.

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If you thought parts proliferation was bad now, it’s about to get a lot worse, an industry expert warned.

As average vehicle age climbs and a wider range of vehicles are on the roads, jobbers are already seeing issues with keeping track of all the parts these vehicles need — and stocking them.

But as electric vehicles now begin to proliferate at a quicker pace — Canada finished with a new high in ZEV adoption at the end of 2023 and Stats Canada reported a further surge to start 2024 — there will be even more parts coming through to service those vehicles.

It will take time to make a large-scale impact, but it will happen, according to Todd Campau, aftermarket practice leader at S&P Global Mobility.

“We’re seeing the same thing with EVs that we’ve seen with all other vehicles: Consumers prefer to buy EVs that are of the light truck body style,” he said at AAPEX 2023 during his presentation, Trends Impacting the North American Aftermarket.

And as carmakers add more SUVs, crossovers and pickups, the belief is that more consumers will start buying EVs. Eventually, the market will move closer to what we see with internal combustion engines — in Canada, DesRosiers reported, 85 per cent of vehicles sold are light trucks.

Yes, EVs make up a small percentage of vehicles on roads today so there’s a long way to go for them to make a meaningful impact, Campau acknowledged.

“As they say, Rome wasn’t built in a day — [the U.S.] vehicle fleet of 285-plus million vehicles wasn’t built in a day and we won’t change it over in a day,” he said.

But changes are on the way. For example, Tesla is the current market leader by far but their hold won’t be as strong in the coming years. Consumer options are going to go from a handful of brands building EVs to upwards of 60.

“And so we’re going from a few brands to a lot of brands,” Campau said, adding that the market will jump from 26 models today to hundreds of models over the next few years.

That’s 300 more vehicles “that you now have to understand the products to maintain the repair. You have to add parts to your line for 300 additional vehicles, all the while continuing to maintain what you do for the ICE vehicles that are on the road today,” he said.

Yes, EVs have fewer parts. “I think in the short term, the proliferation of parts could get worse for a while because you’re going to have to have parts for EVs that are starting to grow — and there’s a lot of brands and a lot of nameplates, a lot of models — and you’re going to have to continue to maintain the already proliferation of parts for the vehicles that are in the fleet today,” Campau said.

Eventually, he predicted, companies will merge and the pressure will lessen.

“But some of the some of the new entrants may not last forever. So that picture will clarify. But in the meantime, there’s going to be some degree of chaos around that,” Campau said.

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Vehicles are far more durable today thanks to improved manufacturing techniques, advanced technology, electronic component replacement of mechanical parts and corrosion-resistant body parts.

As a result, Lang Marketing reported that vehicles have likely had at least five years added to their life expectancy over the last two decades.

It pointed out that vehicle scrappage remains moderate.

“The growing number of vehicles 12 years and older should have driven scrappage rates higher, but this has not materialized,” Lang reported.

Part of that is because people are choosing not to dump their older vehicles. With higher prices of new vehicles (up 40 per cent in the last seven years) and a 35 per cent increase in used vehicle prices over the same time, consumers are keeping their vehicles longer.

“Both developments have put downward pressure on the scrappage rates of older vehicles,” Lang said.

Vehicle life and scrappage have moved in opposite directions, it observed.

“The number of years that vehicles remain on the road has increased, and scrappage has been lower than expected, given the expanding population of older vehicles in operation,” Lang’s report, Vehicle Life & Scrappage Boost Aftermarket, said.

Longer vehicle life is also helping keep average vehicle age on the increase.

“Since older vehicles use more aftermarket parts per mile than newer models, these developments helped the rate of aftermarket product volume to grow faster than the total increase in miles driven during this period,” Lang said.

It also noted that virtually all vehicles five years and older are internal combustion engine ones.

“As vehicles remain in operation longer and the number of older vehicles increases, the size and growth of the ICE vehicle aftermarket will benefit significantly,” Lang said, adding that the ICE aftermarket will remain strong through the end of the decade.

However, having more older vehicles has a downside, impacting inventory demands and parts proliferation.

“The growth of older vehicles in operation will increase the need for aftermarket distribution channels to carry vehicle parts for more years than historically has been necessary,” Lang reported. “This will expand the problems of parts proliferation and inventory management demands at all levels of the car and light truck aftermarket.”

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Electric vehicles are becoming more common on Canadian roads, partly thanks to reduced purchase prices. But their increasing prevalence is bringing new challenges, particularly in terms of collision repairs, according to Mitchell.

The technology and information provider for the property and casualty claims and collision repair industries found a notable increase in the total loss frequency for EVs in its Q1 2024 trends report, Plugged-In: EV Collision Insights.

In Canada, the total loss rate for EVs reached 7.48 per cent in the first quarter of 2024. That’s an 8 per cent increase from Q4 2023 and a 30 per cent increase from Q3 2023. This comes even as the total loss frequency for EVs remained comparable to that of 2021 and newer internal combustion engine (ICE) vehicles, which ended the quarter with a total loss rate of 7.44 per cent.

“Slowing new sales, manufacturer price reductions and changing consumer sentiment are impacting the value of used EVs,” explained Ryan Mandell, Mitchell’s director of claims performance, explained the trends. “As a result, the total loss frequency for collision-damaged EVs is increasing. However, it is also increasing for new gasoline-powered vehicles, which are comparable to EVs in terms of their complexity and cost to repair.”

The report also underscored the challenges faced by repair shops dealing with EVs. The average number of mechanical labour hours required for repairable EVs was nearly double that of ICE vehicles, with EVs requiring 3.04 hours compared to 1.66 hours for ICE vehicles. This substantial difference contributes to higher repair costs for EVs, Mitchell reported.

Moreover, although average claims severity decreased in Q1, the cost remains significantly higher for EVs compared to ICE vehicles. In Canada, the severity difference was $1,700 CAD, or 33 per cent, with EVs averaging CAD$6,810 versus CAD$5,110 for ICE vehicles. This trend is echoed in the United States, where the severity difference was $1,363, or 29 per cent, with EVs averaging $6,066 versus $4,703 for ICE vehicles.

Claims frequency for EVs is also on the rise — in Canada, it grew to 3.41 per cent in Q1 2024, a 38 per cent increase compared to Q1 2023. In the U.S., the claims frequency reached 2.26 per cent, representing a 40 per cent increase over the same period.

Parts utilization and repair practices further illustrate the challenges of EV collision repairs. Without a robust inventory of aftermarket and recycled parts, EV collision repairs are more likely to involve OEM parts — with 89.29 per cent of EV repairs said they use OEM parts compared to 65.14 per cent for ICE vehicles. Additionally, EV parts, which are often designed to be lighter to offset the heavier battery, are more challenging to repair. In Q1, 13 per cent of EV parts were repaired versus replaced; in ICE vehicles, it was 15 per cent.

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The electric Hummer on display at the 2024 Canadian International AutoShow

As the automotive industry shifts towards electric vehicles, dealers are expressing significant concerns about the transition, according to a recent report by CDK Global.

Dealers Face the EV Transition highlighted growing pessimism among dealers regarding the EV market’s impact on their business models with 65 per cent of respondents saying so. Fewer than one in five (19 per cent) were optimistic.

That said, feelings vary depending on where these dealers are located and the markets they serve, the report noted.

“Yet, the EV market is said to be inevitable even as headwinds build. Many challenger brands not named Tesla are hurting. Traditional automakers are seen scaling back or rethinking their EV strategy mid-flight,” the report said. “In this tumultuous atmosphere, dealers serve not as a canary in a coal mine but heralds of an unwelcome truth on the ground.”

Dealers are particularly worried about the high costs associated with EV infrastructure and training as well as the uncertain consumer demand. Over half of the surveyed dealers doubt their ability to achieve profitability with EVs, citing the substantial investment required for charging stations and specialized technician training.

Most (45 per cent) said the industry would be at EV parity, with at least half of all sales being all electric, in five to 15 years, but a quarter (25 per cent) said they don’t see parity taking place for “several decades at least.” The rest (30 per cent) said it would be more than 15 years.

Dealers cite similar reasons as consumers as to why there’s a lack of buy-in on EVs: 62 per cent said range doesn’t meet their needs; 47 per cent said charging is too difficult or takes too long; and 34 per cent cite the high purchase prices.

The report also noted that 60 per cent of dealers feel unprepared for the EV transition, with many fearing a loss of business if they cannot adapt quickly. Despite the industry’s push towards electrification, dealers are hesitant to fully embrace EVs without clearer pathways to financial viability and stronger consumer incentives.

As the automotive landscape evolves, dealers are calling for more support and guidance to navigate the challenges posed by the EV revolution, emphasizing the need for comprehensive strategies to ensure their continued success in a rapidly changing market.

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While interest rates have hopefully begun their long-term descent, the consumer price index (CPI) data for key sectors of the automotive industry continued to show increases in April.

But there was one notable exception, according to DesRosiers Automotive Consultants (DAC).

In the maintenance category, prices increased by 4.2 per cent, and automotive parts saw a 2.9 per cent uptick, indicating ongoing price gains in the aftermarket.

Leading the gains were insurance premiums, which surged by 6.8 per cent compared to April 2023. Gasoline prices also saw a significant rise of 6.1 per cent.

However, the trend changes when examining vehicle prices. The CPI for new passenger vehicle purchases increased by a modest 1.4 per cent compared to April 2023. In contrast, used passenger vehicles, which had experienced sharp price hikes during the semiconductor shortage, saw a CPI decline of 2.3 per cent as of April 2024.

“While consumers have seen some easing in the price growth for vehicles themselves, the costs in the aftermarket as well as gas and insurance continued to climb,” said Andrew King, managing partner at DAC. “Hopefully price pressures will continue to ameliorate, and interest rates fall further, as the automotive market enters a somewhat unsteady period.”

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The auto industry is at a three-way crossroads. On one hand, the climate crisis has shown no signs of abating. Conversely, global legislatures are exploring or have enacted environmental policies establishing decarbonization and net zero emission goals for various industries, including insurance. Lastly, the consumer appetite for sustainability and environmental responsibility from businesses, particularly auto insurers’ repair process, is genuine.

In fact, a 2023 PwC survey noted that 77 percent of consumers are willing to pay more for recycled, sustainable or eco-friendly products. A recent World Economic Forum report stated that 65 percent of consumers align their spending with brands committed to a healthier, more sustainable planet.

This situation allows the auto industry to embrace environmental goals, such as achieving net zero emissions. These efforts can yield positive results, such as attracting and retaining eco-friendly consumers, reducing operating costs, and enhancing business reputation. While the path to a net zero emission repair process may have been difficult in the past, current technologies, guidelines, and frameworks have made it a much more achievable goal.

Although progress has been made, the industry still needs to work on balancing net zero targets with profitability, mainly due to the lack of comprehensive data on indirect emissions activities from vendors and suppliers in the claims and repairs process, known as Scope 3. In fact, the World Economic Forum’s Net Zero tracker indicates 40 percent of emissions come from activities in the broader automotive industries. This highlights the need for better data analytics capabilities and collaboration across value chains to meet net-zero goals.

Using estimatics for understanding data’s role in achieving net zero repairs

Despite this, 70 percent of automotive organizations plan to reduce emissions across the entire value chain. While this is encouraging, it may not be enough for today’s eco-friendly consumers who view the climate crisis as an urgent issue that the world’s largest industries cannot wait to address. They want to see real progress through meaningful actions, and the best way to make this progress through action lies within your data.

To achieve net zero emissions, technical and non-technical teams need to understand their data, and groundbreaking solutions can make sense of hard-to-measure Scope 3 CO2e emissions data in the repair workflow. Such solutions include estimatics tools – which help insurers and repair shops assess and calculate repair costs, as we as track emissions activity. Estimatics also encourages more efficient collaboration across a repair shop’s vendors, helping to identify where more sustainable approaches should be made during a repair.

In short, the role of data and estimatics in the claims and repair workflow is central to addressing these challenges and realizing net zero emissions targets.

Strong data analytics capabilities can help your teams achieve their sustainability goals by helping them understand how emissions within a supply chain impact net-zero strategies. This can include assessing sustainable practices among repair shops and their suppliers, OEMs and transportation partners.

Additionally, knowing which parts can be repaired or reused, such as radiators, A/C condensers, wheels and like-new alternators, can reduce emissions and the costs of sourcing new parts. It also prevents the old part from being sent to landfills — which requires additional emissions from transportation. This newfound efficiency helps teams repair vehicles more effectively, resulting in fewer backlogs and quickly returning fixed vehicles to customers.

Finally, regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD) or California’s SB 253 and 261 — which require reporting Scope 1 (direct emissions from owned or controlled sources), Scope 2 (indirect emissions from purchased sources) and Scope 3 emissions data – continue to serve global policy models. Understanding the role data plays in your path to net zero is becoming a requirement.

How pursuing net zero emissions can help repair shops save time and money

This shift in consumers’ sustainability priorities and global net zero and sustainability regulations necessitate new strategies from auto insurers and their repair shops. For example, they can reassess and improve the sustainability data within their value chains. Yet, some still believe prioritizing sustainability or net zero initiatives means sacrificing profitability to some degree.

For example, refurbishing a serviceable engine would not only reduce emissions by up to 85 percent, but it would also save the repair shop time and money waiting for a new engine to be delivered, installed and tested to ensure it works as intended. Although this is a single example, it demonstrates how net-zero initiatives can satisfy profitability demands while meeting the sustainability requirements of the eco-friendly consumer.

In short, aligning net-zero emission practices with profitability becomes an opportunity for cost-effective but environmentally responsible practices. By reframing net-zero, and sustainability more broadly, as an integral part of the business rather than a checklist of to-do’s, insurers can navigate the dual priorities successfully. This approach mitigates the perceived clash and presents a desirable solution where sustainable practices drive financial gain and environmental impact.

The future of the auto industry is becoming increasingly intertwined with sustainability initiatives. And, as consumers and governments demand more environmental responsibility, insurers and their repair shops have a golden opportunity to cash in on their pursuit of net zero emissions.

Bill Brower is senior vice president of industry relations and North America claims at Solera. Paul Prochilo is chief executive officer of Simplicity Car Care.

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Political strife and economic realities are pushing automotive aftermarket suppliers to find lower-cost options and reduced political tensions in countries other than China.

Indeed, companies there are recognizing the challenges ahead and are moving their operations out to the likes of Vietnam, Malaysia, Morocco and Hungary, observed Paul McCarthy, president of the MEMA Aftermarket Suppliers Association.

And, he highlighted during the MEMA Aftermarket Suppliers Global Summit in Florida, they’re moving into Mexico as well.

“This is a different stage, a different type of competition for the global industry coming from China,” he noted.

But that doesn’t mean the industry will stop doing business outright with China.

Much has changed over the years, McCarthy observed. China used to compete on cost thanks to low wages. That’s not the case anymore. For example, a generation ago, China’s wages were half of Mexico’s. Now it’s more than double. Suddenly, China isn’t as affordable an option.

“This trend is not new,” McCarthy said. “And it was inevitable as China re-took its place as one of the world’s largest and most prosperous economies.”

But even as wages increased, China sold itself on the expertise it offered over anyone else.

“The best Chinese companies, their advantage is based on expertise. It’s based on scale, in terms of aftermarket products. And increasingly, it’s based on EVs and EV technology,” McCarthy said.

Furthermore, China saw its exports increase five-fold from 2020-2023. That’s creating excess capacity, leading to China sending that off to its neighbouring countries.

So as business moves to other nations, there will be an increasing need for aftermarket leaders who can tackle global complexities. Trade will always happen and find a way, McCarthy noted, pointing to how much more aftermarket business is coming from countries like Turkey and the United Arab Emirates.

“So our point of view is that the international aftermarket expertise to this world we’re describing, it just becomes more important,” McCarthy told attendees. “A more complicated world increases the need for professionals who can navigate that complexity. And it’s even more important to know who you can trust across borders to have those relationships and an uncertain world.”

The rules of doing business and what the aftermarket needs to adapt to have changed in the last 30 years. Those who can navigate those waters will come out ahead, he added.

Take a look at issues in the Red Sea. The region typically handles 10 per cent of global trade. When conflict began, that number dropped to 3 per cent.

“It’s amazing this decline that you see of the trade going into the Red Sea,” McCarthy said. “So a very concrete example of how volatility is impacting our business and we’re seeing it in our shipping prices and elsewhere.”

It all leads to the industry “trying to execute the biggest shift in the aftermarket footprint that we have had in generations.”

The pandemic accelerated disruption in supply chains, the biggest since World War Two, McCarthy noted. “It impacted everything.”

The aftermarket leaned into profitability by ushing in ultra-lean global supply chains following the fall of the Berlin Wall.

“That’s where the margin was,” McCarthy explained. However, he later observed, “That may never return.”

Business forebearers had a “period of great moderation” where they had global stability and could find efficiencies, he added. “Our world seems to have changed.”

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Despite the growing momentum in electric vehicle (EV) sales in Canada, significant hurdles remain on the road to mass adoption, observed a new report by DBRS Morningstar.

“The Transition to an Electric-Powered Vehicle Fleet” highlighted the challenges and outlines the necessary steps to achieve the federal government’s ambitious targets for zero-emission vehicles (ZEVs). The Canadian federal government set a goal for 100% of light vehicle sales to be ZEVs by 2035, with interim targets of 20% by 2026 and 60% by 2030.

However, the transition to an electric-powered vehicle fleet is not without its difficulties. In 2023, ZEVs accounted for 10.8% of new light vehicle registrations in Canada, with battery-electric vehicles (BEVs) making up 8.1% and plug-in hybrid electric vehicles (PHEVs) 2.6%. While this marks progress, the report emphasized several significant challenges that need to be addressed to achieve mass adoption.

Still, one of the most critical barriers to mass adoption is the lack of sufficient charging infrastructure. As of March 2024, Canada had 11,223 public charging stations with 27,612 charging ports. This is far below the estimated need of 442,000 public charging ports by 2035 to support a fully electric vehicle fleet. The federal government, along with the Canada Infrastructure Bank, plans to finance and deploy 83,500 public charging ports by 2030, leaving a substantial gap to be filled by provincial governments and the private sector.

Range anxiety remains a significant concern for consumers, exacerbated by the inconsistent availability of fast and reliable charging stations, the report noted. Even with improvements in charging technology, the time required to charge an EV, especially at Level 3 stations, is still significantly longer than refuelling a traditional internal combustion engine vehicle.

Furthermore, the high cost of EVs compared to ICE vehicles is another major obstacle. Despite recent price reductions by some OEMs, EVs remain more expensive to manufacture and purchase. The report noted that the price gap is expected to narrow as battery technology advances and production scales up, but for now, affordability continues to be a significant barrier for many potential buyers.

The lack of substantial subsidies and incentives across Canada further complicates the issue. In contrast, countries with high ZEV penetration rates, such as Norway and Sweden, have benefitted from generous government incentives that have made EVs more economically attractive to consumers.

To achieve the ambitious targets set by the federal government, continued efforts are needed to address these challenges, DBRS observed. Expanding the charging infrastructure, improving affordability through technological advancements and incentives, and increasing consumer confidence are crucial steps.

“Over the longer term, countries like Norway, Sweden, and Iceland have shown that ambitious ZEV penetration rates are possible,” said Simba Murahwi, vice president of Canadian structured Finance ratings at DBRS. “With such high penetration rates, ZEVs would become the dominant force in the Canadian vehicle fleet. This will ultimately result in weaker value retention for ICE vehicles relative to comparable ZEVs.”

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In an ongoing effort to attract more older vehicles — typically those in the aftermarket sweet spot — dealers are getting more creative in their pricing, according to a recent report.

In a strategy that it says has “gained momentum” since the Great Recession of 2008 and the COVID-19 pandemic, dealers are embracing their ‘all-makes, all-models’ strategy, and offering alternatives to OE parts

“This allows dealers to be more price competitive with independent (non-dealer) service outlets in the rapidly expanding do-it-for-me (DIFM) market,” Lang Marketing said in its report, Dealers Tweak Repair Pricing to Up Bay Biz.

This comes as the average vehicle age in Canada and the U.S. has increased in recent years. In Canada, average age has grown from 9.7 years in 2020 to 10.5 in 2024. In the U.S. over the same time, average age moved from 11.9 to 12.6.

This shift also aims to support a broader range of vehicle nameplates in service bays.

To appeal to a diverse customer base, dealers are adopting a ‘good, better, best’ parts selection strategy, as the aftermarket does. But here’s how they break down each category:

• Best Parts: OE brands used for newer models and dealer-sold nameplates.
• Better Parts: OE-supplier brands, often matching OE quality, used selectively for competitive pricing.
• Good Parts: Aftermarket brands, offering affordability for older vehicles and different nameplates.

Additionally, some dealers are offering lower labour rates for servicing older vehicles, making their services more competitive with independent repair shops.

As the used vehicle market is significantly larger than the new vehicle market, dealers are increasingly using non-OE brands to refurbish used vehicles. This strategy has contributed to dealers gaining a larger share of the DIFM market over the past five years, often at the expense of independent repair shops.

Looking ahead, Lang noted, these adaptations present growing opportunities for manufacturers and distributors of OE-supplier and aftermarket brands. As dealers continue to expand their use of non-OE brands, they offer a promising customer base, potentially offsetting declining sales in the independent repair sector.

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Car dealerships across North America are grappling with significant disruptions following cyberattacks on a major software provider, CDK Global, which serves thousands of auto dealers in the U.S. and Canada.

On June 19, CDK Global experienced two consecutive cyberattacks targeting dealer management systames, resulting in a prolonged outage that continues to affect dealership operations. This has led to delays for prospective car buyers. Orders are being processed manually, with pen and paper. Some media reports indicate that repair orders can’t be completed because it has to run through the computer system to be closed.

The company is calling the cyberattack “a ransom event” with Bloomberg reporting the attack being linked to a group called BlackSuit. Bloomberg also reported that the ransom was set at tens of millions of dollars and that CDK was planning to pay.

“When you see an attack of this kind, it almost always ends up being a ransomware attack,” Cliff Steinhauer, director of information security and engagement at the National Cybersecurity Alliance, told the Associated Press. “We see it time and time again unfortunately, [particularly in] the last couple of years. No industry and no organization or software company is immune.”

CDK anticipates the restoration process to not happen earlier than the end of June, according to a memo sent to dealers and seen by Reuters. The company has asked dealers to make alternate plans for their month-end financial closing processes.

Illinois-based CDK is in about 15,000 dealerships across Canada and the U.S., according to the company. It’s a crucial player in the auto sales industry, providing software for daily operations such as vehicle sales, financing, insurance, and repairs. According to Reuters, the cyber attack has impacted about half of Volkswagen dealers and around 60 per cent of Audi’s dealers in the U.S.

In response to the cyberattacks, the Associated Press reported that CDK shut down all its systems as a precautionary measure and has since begun the restoration process. The company has launched an investigation with third-party experts and notified law enforcement. CDK has also warned customers of potential phishing attempts by bad actors posing as CDK affiliates.

Major auto companies like Stellantis, Ford, and BMW confirmed to The Associated Press that the CDK outage has impacted some of their dealers, but sales operations continue. Stellantis noted that many dealerships have reverted to manual processes, including writing up orders by hand.

A Florida man is now suing CDK in a potential class action lawsuit, saying the company neglected to safeguard his private information and claims that his private information — including his Social Security number, financial details, credit card numbers and bank account information — was impacted in the breach. He further claims the software company should have been better prepared for the cyberattack, given the prevalence of such risks.

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New vehicle prices remained lower year-over-year for the eighth consecutive month in the U.S. as of May, as higher inventory levels continued to exert downward pressure on transaction prices.

According to Kelley Blue Book, the average transaction price (ATP) for a new vehicle in the U.S. was $48,389, a 0.9 per cent decrease, approximately $442, from May 2023.

Increased incentives played a significant role in making new vehicles more affordable, according to the group. The average incentive package, which includes discounts and rebates, rose to 6.7 per cent of the ATP, the highest level since May 2021. Incentives in May averaged around $3,200, an increase from one year ago when they were 4 per cent of ATP.

“In May, we saw some positive news on the sales front,” said Erin Keating, executive analyst for Cox Automotive. “Higher incentives and lower prices have been beneficial for consumers, especially those concerned about inflation. While many vehicles are still selling at high prices, there are excellent, affordable options, particularly in the compact segments.”

Higher inventory levels are a key factor in the current pricing trends. At the beginning of May, new vehicle inventory was to be at a 51 per cent increase year-over-year and the highest level since late 2020, according to vAuto Live Market View. Many brands had more than 100 days’ supply, with only Toyota, Lexus, and Honda having less than 60 days’ supply.

This abundance of inventory is keeping prices in check and driving higher incentives as dealers compete for customer, according to KBB.

In May, four of the top 10 best-selling vehicles were full-size pickup trucks, each with ATPs above $60,000. Despite these high-priced trucks, five of the top 10 most popular vehicles had transaction prices below $40,000, significantly below the industry average of $48,389. For instance, the Toyota RAV4, the third most popular vehicle, averaged $37,608, and the Honda CR-V, ranked fourth, averaged $37,364, nearly 23 per cent below the national average.

The share of vehicles selling for less than $40,000 increased in May compared to the previous year, suggesting a shift towards more affordable models. Vehicles priced below $40,000 accounted for 41.2 per cent of new-vehicle sales, up from 36.8 per cent in May 2023.

In the electric vehicle (EV) market, prices have seen volatility. Tesla’s average transaction price rose by 3.1 per cent month-over-month to $57,369 in May and was up 1.5 per cent year-over-year. Since January, Tesla’s ATP has increased by more than 10 per cent, partly due to growing Cybertruck sales, which averaged $108,667. Overall, EV prices increased in May, with the average EV selling for $56,648, up 2.6 per cent from April but down 4.1 per cent year-over-year.

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Zero-emission vehicles from Stellantis on display at the 2024 Canadian International AutoShow

A move by the British Columbia government to reduce the level of qualifying electric and hybrid vehicles from its rebate program is drawing the ire of leaders of the Canadian auto industry.

The CleanBC Go Electric rebate provides up to $4,000 to qualifying zero-emission vehicles. The province dropped the maximum cost of qualifying vehicles on Tuesday to $50,000 — from the previous $55,000.

Groups say three-quarters of battery electric, plug-in hybrids and fuel cell-powered cars no longer qualify for the rebate.

“In the past 24 hours, I have been inundated with calls from new car dealers, expressing grave concern about changes to the program and, in some cases, suggesting they may cancel orders for vehicles they don’t feel they will be able to sell in the new environment,” said Blair Qualey, president and CEO of the New Car Dealers Association of B.C. in a statement.

“We are astonished and extremely disappointed by the announced changes to BC’s ZEV rebate program,” said a statement from Tim Reuss, president and CEO of the Canadian Automobile Dealers Association.

He further added the move was “decided in great haste and without any consultation with the industry, but it contradicts the province’s own ZEV ambitions” and that cutting out so many vehicles from qualifying “makes absolutely no sense.”

There’s about a double-digit price gap between ZEVs and their internal combustion engine counterparts.

“We’ve never suggested incentives should be in place forever, but they need to be in place until price parity with ICE vehicles is achieved — and we are not close to that,” said David Adams, president and CEO of the Global Automakers of Canada.

The leaders called on the government to reconsider the changes. Otherwise, meeting the federal government’s goal of 90 per cent ZEV sales by 2030 becomes “essentially insurmountable,” Adams added.

Prices overall for vehicles are at risk of spiking should there be added difficulty in selling ZEVs as a result of this rule change.

“Unless government adopts a flexible approach, manufacturers will be hard-pressed to meet targets, leading them to restrict the supply of all vehicles for sale in the province to avoid penalties — which in turn will drive up all new and used vehicle prices, as we saw during the pandemic,” Qualey warned.

He also added that some manufacturers could reduce prices to fall within the threshold.

“We anticipate some manufacturers may reduce the cost of some models so they fall within the new threshold, but we believe the overall impact on consumers will be significant,” Qualey said.

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Robert Kras won the 2024 MazTech Service Skills Competition

Robert Kras is the top Mazda Canada technician, beating out nine other competitors from across the country.

At the MazTech Service Skills Competition, technicians were given two hours to run through a repair order, diagnose the issues and solve them on a 2024 CX-30 all-wheel drive.

When the horn blew and the marks were tallied, Kras of Westowne Mazda in Toronto came out on top.

The issues he solved best among his peers were:

• Customer states ignition will only turn on if remote is near the push button.
• Customer states ignition shuts off when attempting to crank/start the engine.
• Customer states engine runs rough and Check Engine Light ON.
• Customer states Oil Monitoring Malfunction message on Instrument Cluster when engine running.
• Customer states Front Passenger Window one touch up doesn’t work.
• Customer states rear hatch doesn’t work from front switch.
• Customer states wipers hit the car and make noise.

And there were a few bonus ones added in as well by the organizers.

 

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Nicolas Germain from Laurier Mazda in Quebec City came second, while Ghislain Cote of Mazda Victoriaville in Victoriaville, Quebec came third.

For winning, Kras will head to an international recognition event hosted by Mazda Japan in Japan, along with the 2025 winner, to be determined next year.

The 10 competitors of the MazTech Service Skills Competition

The other competitors taking part in the competition were:

• Ryan McDougall, August Mazda (Kelowna, B.C.)
• Brian Logan, Sundance Mazda (Edmonton)
• Matthew Wallace, Barrhaven Mazda (Ottawa)
• Christopher Dill, Carling Motors Mazda (Ottawa)
• Sylvain Messier, Mazda Drummondville (Drummondville, Quebec)
• Eric Duval, Barnabé Mazda (Broussard, Quebec)
•  Cristopher Puckering, Western Mazda (Cornerbrook, Newfoundland)

You can see photos from the competition below…

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It seems pent-up demand for new vehicles is dissipating and new vehicle sales numbers are reaching a level of concern.

Canadian new light vehicle sales in May 2024 reached 169,000 units, according to DesRosiers Automotive Consultants. On one hand, that’s a notable improvement over the previous two years — almost 6 per cent better than 2023 and 20 per cent higher than “the pitiful” numbers of 2022 when supply shortages hurt inventories. On the other, that’s still well behind the 200,000 mark last seen in May 2019.

The seasonally adjusted annual rate (SAAR) for May 2024 was 1.63 million units, marking the lowest SAAR recorded so far this year. Despite this, the automotive market continues to show some level of growth, now marking 19 straight months of year-over-year gains.

“It is somewhat concerning (if not unexpected) that the SAAR appears to be trailing off from the levels hit in January and February when pent-up demand fuelled the market to lofty heights,” said Andrew King, managing partner at Desrosier. “However, we have now seen 19 consecutive months of year-over-year gains, and the market continues to move forward, albeit supported by an increasing range of sub-vented interest rates and other incentives.”

What may work in the industry’s favour is a reduction in interest rates. In a widely expected move, the Bank of Canada cut the number to 4.75 per cent, the first cut since March 2020. With inflation easing, more cuts can be expected. Speculation is there could be two or three more cuts by the end of the year.

However, Bank governor Tiff Macklem warned against moving the interest rate down too quickly and jeopardizing progress.

In the U.S., though, it’s a different story where the economy is said to be still too hot to move rates down. Job numbers in June came in with nearly 90,000 new jobs added than expected in May

“Inflation appears to be stuck in a range and there will need to be several consecutive months of undeniable proof that it is finally moving down at a clip, rather than a crawl, before any action is taken,” said Nigel Green, the chief executive of financial advisory firm deVere Group. “This is simply not happening at the moment and there’s no reason to suggest it will next month or the month after that.”

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A new wave of electric vehicle buyers is expected to enter the market in the second half of the decade, according to the latest 2024 Path to EV Adoption Study by Cox Automotive.

The study reported that while nearly half of current vehicle shoppers are not considering an EV, a significant shift is anticipated as technological advancements and improved infrastructure address their concerns.

Currently, 45 per cent of in-market vehicle shoppers are considering an EV, down from 51 per cent last year. However, the study suggested that within three to five years, 54 per cent of today’s skeptics — those currently only considering traditional internal combustion engines — will start considering EVs. By 2033, 90 per cent of all vehicle shoppers are expected to have EVs on their lists.

“While we’ve seen EV sales growth slow and consideration dip, we believe this is part of a normal growth curve and not the end of the story,” said Isabelle Helms, vice president of research and market intelligence at Cox Automotive. “With more infrastructure, education, and technological innovation, we believe electric vehicle sales will continue to grow in the long term.”

The study indicated that high EV prices and a lack of charging stations are the main barriers for skeptics, who emphasized the absence of sufficient charging infrastructure as their primary concern. Many are waiting for better range, longer battery life and overall technological advancements before making the switch. In contrast, those already considering EVs cite price as the top obstacle.

The demographic landscape of EV buyers is also shifting. The market, once dominated by luxury and high-income households, is now attracting a more diverse group of buyers, including Gen Z, multicultural, and less affluent shoppers. This broader appeal is partly due to the increasing consideration of used EVs. The study found that 77 per cent of EV considerers are now looking at used models, a significant rise from 62 per cent in 2021.

Moreover, mainstream brands like Toyota, Hyundai and Kia are gaining traction in the EV market, though Tesla remains the most-considered EV maker. The study highlighted that many consumers are still unaware of EV offerings from other major automakers, such as Nissan, despite the Leaf being available in North America since 2011.

The relationship between dealers and automakers regarding EV sales has improved since 2019, becoming more strategic and balanced. Dealerships report increased support in marketing, sales and service, but they also seek additional resources such as more EV incentives and advertising funds.

Despite feeling pressure from automakers to meet EV sales targets, 86 per cent of franchised dealers are likely to continue investing in EV infrastructure, signalling a collaborative effort to accelerate EV adoption.

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The average age of vehicles in Canada is more than two years lower than American vehicles and the gap has a fairly simple answer: It’s all thanks to a pipeline of vehicles exiting Canada and heading to the U.S.

Canada’s average vehicle age is 10.5 years. In the U.S., it’s more than two years higher at 12.6 years. During this year’s AIA Canada National Conference in Toronto, Todd Campau, aftermarket practice lead at S&P Global Mobility, explained why there’s such a gap.

He noted that the number of vehicles in operation in Canada is steady at 26.7 million. Campau pointed out that even though new vehicle sales are not what they used to be, there is still growth. The data left him curious. So he investigated why vehicle age wasn’t the same or closer for both sides of the border.

During the session, The Impact of the Evolving Vehicle Fleet on Vehicles in Operation and Vehicle Kilometres Travelled, he explained what he found. He told the audience that there’s some correlation between the Canadian dollar and vehicle exports to the U.S. When the dollar is low, it’s cheaper for Americans to import vehicles — and that’s exactly been the case for several years.

“And one of the things that is definitely impacting your fleet are exports going into the U.S.,” he explained.

He checked out federal databases, which showed what was taking place.

S&P Global Mobility’s Todd Campau speaks at the AIA Canada 2024 National Conference

In particular, the third quarter of 2020 and second quarter of 2022 each saw about 180,000 vehicles shipped from Canada south of the border. That wasn’t tied to the exchange rate, however — it was because there was a dearth of vehicles in the U.S. marketplace and eyes turned to Canada to fill the gap.

Since that later date, quarterly exports to the U.S. have been around at least 50,000 vehicles.

“There’s been a stronger dollar, there’s the high demand for vehicles in the U.S. And so importers in the U.S. have been very successful grabbing vehicles here and selling them there for profit,” Campau observed.

Furthermore, the vehicles crossing the border have been on the younger side of the spectrum, meaning U.S. importers are specifically targeting low-age cars and light trucks.

Back in 2016, the average age of a vehicle going to the U.S. was approaching nine years old. Today, they’re no more than seven on average. That has Campau concerned about the Canadian aftermarket.

“For me, that’s one of the big yellow flags for the market here,” he said.

If older vehicles nearing end-of-life are the ones being exported, that’s one thing. But vehicles just entering the aftermarket sweet spot being shipped down south creates a problem in the Canadian market.

“That’s taking real aftermarket opportunity away because that’s right in that sweet spot of aftermarket repair,” Campau explained. “So this is something that I think is very important for the marketplace to be sensitive of.”

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The Canadian automotive market has grappled with a significant lack of new vehicle inventory since early 2021. While these shortages have largely eased and inventory levels are beginning to normalize, the full story is more nuanced.

Specifically, dealers say they have too many zero-emission vehicles and not enough internal combustion engine ones, according to a survey of Canadian Automobile Dealers Association members by DesRosiers Automotive Consultants.

When surveyed about ICE vehicle inventory, 43.1% of dealers reported insufficient inventory. Meanwhile, 32.6% indicated that they had the right amount of inventory, and 24.3% stated that they had too much ICE inventory.

In contrast, 31.4% of dealers reported sufficient ZEV inventory, but a larger group, 44.4%, felt they had too much ZEV inventory. Only 24.3% cited a lack of ZEVs.

“While dealer inventory is not the sole determinant of sales success, the opinions on ZEV and ICE stock levels are certainly revealing,” said Andrew King, Managing Partner at DesRosiers. “Consumers are increasingly resistant to higher-priced vehicles. As the market focus shifts from early adopters to a more hesitant general public, the road ahead for ZEVs will be challenging.”

Overall, dealers reported an average inventory level at 88.4% of their normal pre-pandemic baseline.

However, reaching 100% of pre-pandemic inventory levels may not be the goal going forward. Many automakers have expressed a preference for maintaining lower inventory levels compared to pre-pandemic practices. Whether they can sustain this approach as the market dynamics shift remains uncertain, DesRosiers noted.

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The U.S. automotive aftermarket is poised for continued growth, according to new research.

The Joint Forecast Model, a comprehensive analysis prepared by S&P Global and released by the Auto Care Association and MEMA Aftermarket Suppliers, revealed that total aftermarket sales grew by 8.6 per cent to reach $391 billion. Dealers’ service centres, auto parts stores, and general auto repair sectors all saw significant growth, surpassing initial estimates.

The model, the announcement explained, provides an in-depth review of the market’s size, growth projections through 2027, and the trends influencing this trajectory. It also highlighted that, despite challenges such as persistent inflation, the U.S. automotive aftermarket showed resilience in 2023.

Several key trends are shaping the aftermarket industry. Rising wages and a strong labour market are boosting consumer spending despite inflationary pressures. The industry’s ability to charge more for services and parts has helped counteract inflation, which is expected to return to the Federal Reserve’s target range by late 2025.

Although consumer sentiment remains low, spending levels have been resilient. However, ongoing pessimism could pose risks to future spending patterns. New vehicle sales are projected to stabilize, contributing to the expansion of the U.S. vehicle fleet. Additionally, there is a continued rise in e-commerce purchases of DIY parts, reflecting changing consumer preferences and the increasing convenience of online shopping.

In 2023, the aftermarket faced similar influences as in 2022, with high inflation and a resilient consumer base driving spending. Despite high inflation hindering potential federal rate cuts, the strong labour market and rising wages kept consumer spending robust, benefitting the aftermarket.

The model predicted that U.S. automotive aftermarket sales will grow by 5.9 per cent in 2024. From 2025 to 2027, the market is expected to see average growth rates of 4.5 per cent, with the aftermarket expanding to $472 billion as inflationary effects retreat.

“Despite inflationary pressures, vehicle owners are investing more in their cars, with an aging vehicle fleet and significant growth in both service and retail sectors supporting our industry’s trajectory,” said Paul McCarthy, president and CEO of MEMA Aftermarket Suppliers. “The report’s analysis on how these factors are shaping our market provide essential clarity for our members as they strategize for the future.”

Bill Hanvey, president and CEO of the Auto Care Association, also noted the industry’s promising growth prospects.

“As we navigate the evolving market dynamics, industry stakeholders can expect a wealth of opportunities to emerge, driven by consumer demand, the aging vehicle population and technological advancements,” he said.

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The do-it-for-me (DIFM) automotive service and repair market has experienced significant shifts over the past decade, with a growing demand for vehicle repairs but a declining number of repair outlets.

According to data from Lang Marketing, while the volume of products installed by automotive technicians increased by more than 25 per cent from 2013 to 2023, the number of repair outlets fell by 10 per cent.

The COVID-19 pandemic had a profound impact on the DIFM market in recent years. In 2020, the market saw a double-digit decline in light vehicle repairs across the United States, coupled with a sharp reduction in the number of repair outlets. Although the DIFM market regained its product volume over the next three years, the total number of repair outlets did not recover, indicating a lasting effect of the pandemic on service infrastructure.

However, while many repair outlets struggled, repair specialists — outlets focusing on a limited range of vehicle services — showed resilience. Although Lang reported a decline in outlets in 2020, they rebounded from 2021 to 2023. Similarly, foreign specialists, which concentrate on the repair of foreign nameplates, recorded the fastest increase among DIFM outlet groups, particularly between 2021 and 2023.

Tire stores that also do vehicle repairs saw modest growth between 2013 and 2018 but faced a decline during the pandemic, which has continued slowly. Conversely, vehicle dealers, which lost about 3,000 outlets between 2008 and 2013, began to recover by 2018. Despite a reduction in 2020, they added locations between 2021 and 2023, Lang reported.

Aftermarket Implications

The changing landscape of repair outlets has substantial implications for the automotive aftermarket, Lang noted.

With fewer service stations and garages, there is increased pressure on the remaining outlets to meet the rising demand for repairs. This shift affects the competitive strength of distribution channels supplying the DIFM market and impacts the volume of aftermarket brands and the share of product volume captured by both dealers and independent repair outlets.

Going forward, Lang observed, repair specialists and foreign specialists are expected to increase their population counts and market shares. In contrast, service stations and garages will likely see the largest declines. Vehicle dealers will continue to expand their share, further reducing the market share of independent repair shops.

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A lack of good data is hurting the automotive aftermarket. But artificial intelligence can help the industry in this area.

Industries like healthcare have rich datasets, noted Tilak Kasturi, founder and CEO of Predii, an AI solutions provider for the aftermarket. This industry isn’t in the same spot.

“In the automotive world, it’s much more complex. We don’t have that rich dataset. But there’s a good opportunity for bringing in the data ecosystem, and in a way that would benefit the organization,” he said at last fall’s  MEMA Aftermarket Suppliers Aftermarket Technology Conference.

Complicating things is how much learning AI can do when you’re broaching intellectual property concerns as well as data privacy, noted David Brondstetter, CEO of SureCritic, a reputation management platform that caters to the aftermarket.

“What are the boundaries of the protective nature with only for copyright purposes, but also your own competitive-related information?” Kasturi asked during the session, ChatGPT & AI Applications for the Aftermarket. “And that is pretty hard to grasp. But maybe there are some datasets that are shareable, that would benefit all of the vendors.”

Scott Brown, industry ambassador with Diagnostic Network, sees a big opportunity for the service information companies. Sometimes when a service technician is tasked with solving a problem, they have to go to six different points within the service information system to collect specific bits of data needed to address the vehicle properly.

“Why not use the AI to help understand the problem that the technician has … and it brings that information to him so that they’re more efficient?” he said.

Brondstetter noted that he’d like to see the cream rise to the top in this area and have several companies offer AI services to the aftermarket rather than one large conglomerate. With a smaller, tighter-knit community of service information providers, he sees greater opportunities for innovation as they compete with each other.

“A big, large conglomerate, in my opinion, probably would be a negative for the industry overall because of the lack of innovation that it might house,” he warmed.

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Consumers are finding dealers more convenient, lower priced, fairer and with greater technical expertise than before, a recent report found.

A recent Lang Marketing iReport revealed significant changes in consumer perceptions of service stations and garages versus dealers from 2018 to 2023, with notable shifts across key factors such as convenience, technical repair capacity and price.

Convenience of repair

Service stations and garages have historically received high consumer ratings for convenience, attributed to their widespread locations. The COVID-19 pandemic severely impacted the number of outlets available to consumers, leading to a significant decline in their numbers. This reduction has decreased the perceived convenience of using service stations and garages for many consumers.

Technical repair capacity

Dealers are perceived to have superior technical repair capacity compared to service stations and garages. This perception is particularly strong among owners of foreign nameplate vehicles and newer models. Consumers believe dealers possess greater technical expertise, especially for complex repairs, which has widened the perceived gap in technical repair capacity between sealers and service stations and garages.

Low price

Consumers continue to see service stations and garages as offering lower prices for repairs compared to dealers. This perception is the most pronounced among the four factors measured. However, dealers have been making efforts to become more price competitive, particularly for routine repair jobs like oil changes and brake work. By offering aftermarket brands for older vehicles, dealers have narrowed the price gap, making them more appealing to cost-conscious consumers.

Fairness of price

Service stations and garages are still viewed as offering fairer prices than Dealers. This perception is less pronounced among consumers with foreign nameplates and newer vehicles. Nevertheless, Dealers are working to improve their image by emphasizing convenience and technical expertise, which helps position their pricing as fairer in the eyes of consumers.

Changing perceptions and market impact

Over the past five years, consumer perceptions of service stations and garages and dealers have evolved, influenced by both external factors like COVID-19 and strategic actions by dealers. Dealers have enhanced their services by introducing quick lube services, quick-service lanes and extended business hours, aiming to improve convenience and capture a larger share of the do-it-for-me (DIFM) market.

These efforts appear to be paying off. Consumers now perceive dealer repairs as more convenient, lower-priced, and fairer than they did five years ago. Meanwhile, the perceived technical gap between dealers and service stations and garages has grown, reinforcing dealers’ advantages in complex repairs.

As a result, Lang reported, dealers have significantly increased their share of the DIFM market between 2018 and 2023, while service stations and garages have seen a decline. With many dealers focusing on expanding their service bay business, this trend is expected to continue, leading to a greater share of total DIFM volume being captured by dealers and a reduction in the share held by independent outlets.

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Canadian drivers are increasingly prioritizing efficiency and range amid high fuel prices and a growing electric vehicle market, according to a recent survey from the Tire and Rubber Association of Canada (TRAC).

The survey reveals that 77 per cent of motorists understand that properly inflated tires improve fuel economy, reduce vehicle emissions and protect the environment. Additionally, 62 per cent recognize the role of proper tire inflation in optimizing EV range.

The survey also indicates a rising interest in EVs, with 36 per cent of drivers considering an EV for their next purchase. This figure rises to 48 per cent among drivers aged 18 to 34.

High fuel prices and the cost-of-living crisis are affecting summer driving plans, with 58 per cent of drivers likely to cancel or limit road trips due to financial pressures. This concern is more pronounced among younger drivers, with 66 per cent of those aged 18 to 34 and 62 per cent of those aged 35 to 54 feeling the pinch.

“Canadian motorists are well aware of the crucial role tire maintenance plays in optimizing efficiency and EV range,” said Carol Hochu, president of TRAC. “However, our findings reveal a pressing need for more education about how to do tire care right. This is especially true among younger drivers, who show a heightened interest in EVs but lack essential tire maintenance knowledge.”

Here are other key findings from the TRAC study:

• 81 per cent believe that high living costs make proper tire inflation more important than ever
• 95 per cent understand that proper tire inflation is essential to vehicle safety

Despite high awareness, there are significant gaps in knowledge about proper tire inflation, particularly among younger drivers:

• Only 24 per cent of drivers check tire inflation pressures monthly as recommended, dropping to 18 per cent among drivers aged 18 to 34.
• 62 per cent are unaware that inflation pressures should be measured when tires are cold, increasing to 69 per cent among younger drivers.
• 32 per cent mistakenly refer to the air pressure stamped on the tire’s sidewall, which is the maximum pressure, not the recommended level.
• 12 per cent rely on visual inspections or do not know how to determine proper tire inflation, rising to 19 per cent among younger drivers.

Industry studies, TRAC noted, show that properly inflated tires can improve gas mileage by 0.6 per cent on average, with potential increases up to 3 per cent. Underinflated tires can lower gas mileage by 0.2 per cent for each 1 PSI drop in pressure.

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A recent study by the World Employment Confederation (WEC) revealed that more than eight in 10 business leaders (81%) believe advancements in artificial intelligence (AI) will necessitate new skills and innovative work methods.

Despite this recognition, 78% of leaders express concern about their ability to train employees quickly enough to keep up with technological developments over the next three years.

The research, part of “The Work We Want” global initiative commissioned by WEC, includes insights from its first installment, “Agile Talent in the Age of AI.” This report highlights how generative AI is set to significantly transform workforces, emphasizing the need for both soft and technical skills to harness the potential of AI.

“It is clear that advances in AI have the potential to transform the workplace at an unprecedented pace, yet the growing technical and soft skills gap is a critical hurdle businesses must overcome,” said Jonas Prising, chairman and CEO of ManpowerGroup, a member of the WEC.

“While Gen AI will revolutionize many aspects of work, there are elements of jobs that are, and will remain, quintessentially human: collaboration, communication, creative problem-solving, and empathy towards others. Organizations must cultivate these uniquely human traits and invest in upskilling their workforce to succeed in this new digital era.”

Key findings from the report include:

• 80% of business leaders find it more challenging than ever to plan for future talent requirements.
• 92% of senior executives anticipate the need for a more flexible workforce within the next two years.
• To build this flexibility, organizations are adopting various strategies such as establishing sectoral talent pools (91%), implementing a skills-based hiring approach (89%), using online talent platforms (89%), increasing the use of contingent workers (88%), offering internal flexibility through job rotations (88%), and hiring talent from abroad (88%).
• Employing contingent workers is increasingly seen as a way to access rare digital skills, with 79% of senior executives noting that workers familiar with new technology can help spread knowledge to permanent employees.

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After a quarter of downward movement, new vehicle prices in the U.S. headed up in April.

In March 2024, new-vehicle transaction prices in pretty much held steady at an average of $47,218, a slight 1% decrease from February, according to Kelley Blue Book. Compared to March 2023, this marks another 1% drop, and a 5.4% decline from the peak in December 2022.

Incentive spending by manufacturers increased significantly, up 11% to an average of $3,121, constituting 6.6% of the average transaction price. This marks the highest level of incentives since May 2021. Luxury vehicle incentives were notably higher, averaging 7.5% of ATP, while non-luxury incentives were at 6.4%. However, affordable vehicle options remain limited, with only eight models priced below $25,000 and just two under $20,000.

“A healthy 15.5 million new car SAAR is welcome as consumers enjoy lower prices thanks to significant supply recovery and a doubling of incentive spend compared to last March,” said Erin Keating, executive analyst for Cox Automotive. “However, it bears repeating that historically high interest rates and associated inflation combined with an ever-widening deficit of available vehicles at lower price points will continue to challenge affordability for most car buyers.”

But April 2024 saw a reversal in the downward price trend, with ATPs rising by 2.2% to $48,510 — the highest since December 2023. Despite this monthly increase, year-over-year prices were down 0.5%. Sales volume decreased month-over-month, but the seasonally adjusted annual rate (SAAR) of sales was 15.7 million, slightly higher than in March and flat compared to the previous year. New-vehicle inventory levels were up 46% year-over-year but mostly unchanged from March.

Keating noted that the price increase in April likely reflects a pullback on incentives compared to the end of Q1.

“Affordability challenges continue to lurk, and as inventory builds, we can expect to see incentives grow through the remainder of 2024 to maintain sales momentum,” Keating said during April’s update.

Luxury vehicles significantly influenced the overall increase in ATPs. Luxury brand sales accounted for 18.4% of new-vehicle sales in April, with prices rising by 2.4% from March. Tesla, the leader in the luxury market, saw a 5.7% increase in ATPs, while Volvo posted above-average increases. Despite these gains, luxury prices were down 2.1% year-over-year.

Non-luxury vehicle prices also saw an increase in April, rising to $44,989 from $44,078 in March, a 2.1% increase. Year-over-year, non-luxury vehicle prices were nearly flat, down by just 0.2%. Pickup trucks significantly influenced the increase in non-luxury vehicle prices, with full-size pickup truck prices up 2.8% year-over-year to $66,631.

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Volvo’s Matt Girgis stands in front of the newly unveiled EX90 at the 2024 Canadian International AutoShow

Despite challenges, 64 per cent of Canadians looking to purchase a new vehicle within the next five years are considering a hybrid, plug-in hybrid, or fully electric vehicle, according new report.

The 2024 Mobility Trend Report by Volvo Car Canada highlighted mixed sentiments toward electric vehicles (EVs) amid economic headwinds. Three-quarters (76 per cent) of those not considering an EV cited high costs as the main barrier. Concerns over infrastructure are also prominent, with 78 per cent agreeing that there isn’t enough publicly available charging infrastructure, and 65 per cent worried about getting stranded due to running out of charge.

Additional findings from the report include:

• Only 15 per cent of Canadians believe EVs are more cost-effective than gas vehicles when considering purchase price, fuel/charging costs, maintenance, and insurance.
• 64 per cent feel the environmental benefits of EVs are over-hyped.
• 46 per cent of respondents said a longer maximum range would make EVs more appealing, while 42 per cent called for more easily accessible charging stations and 38 per cent desired better government incentives.

Volvo Car Canada noted in its announcement about the finding that it is working to improve charging infrastructure. In 2023, the company secured additional charging access through the North American Charging Standard (NACS), enabling use of Tesla’s Supercharger network, which adds 12,000 fast-charge points.

Additionally, Volvo recently launched the EX30, its smallest and most affordable SUV, designed to have the smallest CO2 footprint of any Volvo car to date.

“Understanding that early adopters have already transitioned to electric vehicles, we’re focusing on the broader base of potential EV owners who are deterred by cost and infrastructure concerns,” said Matt Girgis, Managing Director at Volvo Car Canada.

The report also found that the most likely to consider an EV are from British Columbia (74 per cent) and between the ages of 18 and 34 (76 per cent).

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With thousands of technician positions needing to be filled, there is an urgent need for the automotive aftermarket to find ways to tackle the problem.

Enter AIA Canada’s Labour Market Report, released late last year. The report found that the labour gap is expected to worsen in the coming years, exacerbated by the growing trend towards vehicle electrification.

Alana Baker, vice president of government relations and research at AIA Canada, joined Auto Service World Conversations to speak about the study, what they found, what the challenges are, how the industry can approach the issues and more.

She pointed to the high staff turnover shops in the mechanical and collision repair space are facing — many of whom are going to other trades and taking their transferrable skills elsewhere.

“It also indicated that 46 per cent of those technicians left for higher paying jobs or for other reasons, including poor public perception of the industry, or a lack of career development opportunities, and even improved working conditions elsewhere,” Baker said of the report’s findings.

Furthermore, she pointed out, auto dealers are a more appealing destination than the auto care sector.

They discussed challenges like advancing vehicle technology and electric vehicles requiring new technical skills from technicians. Low wages in the auto care sector compared to other trades were also an issue. Baker suggested adjusting employment programs to attract younger workers by offering better work-life balance, such as flexible hours.

Baker identified collaboration between industry, government and training institutions to address challenges.

Baker dives into where the industry goes from here, where large gaps exist and factors for improvement.

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Image credit: Depositphotos.com

Vehicles south of the border are continuing to get older. New data puts the number at 12.6 years, up two months from 2023.

That’s a generally slower pace of growth compared to recent years and more normalized growth, S&P Global Mobility noted in its findings. In 2020, the average age of a U.S. vehicle was 11.9 years.

Furthermore, the group observed that the continued upward trend means continued opportunities for the automotive aftermarket. The aftermarket sweet spot has traditionally been considered to be the 6-12 age group. But as average age has grown, the window has expanded to 14 years.

That means many more vehicles are contributing to industry business now and will in the future, noted Todd Campau, aftermarket practice lead at S&P Global Mobility.

“With more than 110 million vehicles in that sweet spot — reflecting nearly 38 percent of the fleet on the road — we expect continued growth in the volume of vehicles in that age range to rise to an estimated 40 percent through 2028.”

In April at AIA Canada’s National Conference, Campau confirmed that Canada’s average vehicle age is 10.5 years, up from 9.7 in 2020. Canada’s numbers haven’t grown as rapidly as in the U.S. mostly because many older Canadian vehicles have recently been exported to the U.S. In 2023, about a quarter million vehicles were exported across the border, keeping average age lower in Canada and higher in the U.S. (Auto Service World will have more details on this in future news coverage.)

The rise in average age in the U.S. comes even though more vehicles are being added to the fleet as new vehicle inventory returns to more normal levels. S&P Global Mobility reported two million more vehicles in operation (VIO) in the U.S. this year to 286 million in total. However, there are still fewer newer vehicles on the road today than just a few years ago.

Vehicles under the age of six made up 98 million vehicles in 2019, or about 35 percent of VIO. Today they represent fewer than 90 million vehicles. It’s not expected that newer vehicles will hit that mark until 2028, according to S&P Global Mobility.

Instead, older vehicles will drive VIO growth as consumers will hang on to their older vehicles. Indeed, vehicles aged between 6-14 years will make up about 70% or more of VIO for the next five years, serving as a tailwind for auto care opportunities.

Looking at electric vehicles, they too will see growing average age. EVs on U.S. roads reached 3.2 million in January 2023, with registrations surpassing one million units for the first time — a 52% increase from 2022. However, the growth rate was slower than some automakers had expected. As consumer adoption slows, the average age of EVs is likely to rise in the short term.

Currently, the average age of EVs in the U.S. is 3.5 years, a figure that has remained steady since 2019 due to a high number of new registrations.

“We started to see headwinds in EV sales growth in late 2023, and though there will be some challenges on the road to EV adoption that could drive EV average age up, we still expect significant growth in share of electric vehicles in operation over the next decade,” Campau said.

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Image credit: Depositphotos.com

Employment levels in the auto repair sector are higher than pre-pandemic levels, according to data from DesRosiers Automotive Consultants.

The automotive aftermarket showed robust growth in 2023, with the automotive repair and maintenance sector reaching 121,000 employees by December, surpassing 2019 levels by 4.8 per cent. Similarly, employment in automotive parts and accessories stores came in at about 5 per cent above pre-pandemic figures.

However, other sectors lagged behind. Motor vehicle manufacturing remained 11% below 2019 levels, while automobile dealers were still slightly short of returning to pre-pandemic employment numbers.

“The overall employment picture in the automotive space was positive by the end of last year,” commented Andrew King, managing partner at DesRosiers. “With the manufacturing side of the industry transforming, the retail aftermarket led in employment growth.”

The broader automotive sector saw continued employment growth throughout 2023, nearly reaching pre-pandemic levels with 604,000 recorded employees by December, just 0.7% below December 2019.

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With average age rapidly growing, the types of vehicles that the aftermarket is servicing are expanding just as quickly.

What was once considered anything in the six-12-year-old range has now expanded to well beyond that, explained Todd Campau, aftermarket practice leader at S&P Global Mobility.

A major driving force is passenger cars, he said at AAPEX 2023 during his presentation, Trends Impacting the North American Aftermarket.

“The passenger car average age is growing nearly out of control at this point because we’re basically, when you think about it, we’re putting 20 per cent of all new sales into passenger cars. They maintain about 40 per cent market share,” he said.

The average age of a passenger car in the U.S. was 13.8 years. Until passenger car market share drops to around 20 per cent, average age is going to continue to run up.

Light trucks, by comparison, are at 11.8 years now after they sat at about 11.5 consistently for some time.

“We’re beginning to see critical mass reached in that crossover utility space. And it’s been holding that high market share for a few years,” Campau observed. “So we’re going to start to see it climb a little bit on the light truck side, too.”

But that’s only part of the story for Campau. More interesting is how these vehicles are moving through their lifecycles.Over the next 10 years, the U.S. is expected to add 19 million vehicles to its fleet that are over the age of eight years.

“This tells me that the sweet spot is going to continue to grow and elongate,” Campau said. “If we have almost 100 million vehicles in 2033 that are over 16 years of age, No.1, average age is going to continue to climb because of this. And, No. 2, we’re going to be seeing a lot more repairs for a lot older vehicles for a longer period of time.”

This is the cumulative effect of vehicle sales during the Great Recession that started in about 2008 and the supply chain impacts of the COVID-19 pandemic and the economic uncertainty since.

In other words, years in which the vehicles in operation numbers would have been replenished and were not — vehicles that would have been typically replace were not. So older vehicle remained on the road and were delayed until later, if at all. About half of all vehicles in the vehicle fleet are going to be older.

“So really good news for us because almost all those repairs … to our channel,” Campau pointed out.

But that means non-traditional players will be coming after traditional business as they see growth opportunities.

“You are seeing more probably OEs trying to get into repairing older vehicles for sure. And this is why. They’ve discovered that this work can be positive to the bottom line. And it’s better than the warranty work they get stuck doing for all the recalls and things like that,” Campau said. “And so they’re going to continue to push into trying to repair more of these old vehicles. But in general, right now, that’s our sweet spot. That’s where we do the best work. And it’s going to grow rapidly.”

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April’s automotive sales in Canada displayed a mild rebound.

DesRosiers Automotive Consultants reported sales up 14 per cent to approximately 164,000 units. However, this improvement pales in comparison to the robust sales figures exceeding 180,000 units typically seen in pre-pandemic Aprils.

Last month’s seasonally adjusted annual rate (SAAR) of sales stood at a “somewhat tepid” 1.68 million, showing a slight uptick from the previous year but still lagging behind the over two-million high set in the earlier months of this year. April’s performance aligns with March’s results but indicates a downturn from the high pace experienced at the year’s start.

“April was far from memorable, registering as the weakest month this year from a sales perspective,” noted Andrew King, managing partner at DesRosiers. “Corporate performance varied significantly across the board. While some companies posted strong gains, others found the going tough. The market has enjoyed 18 consecutive months of year-over-year gains, yet there’s a clear slowdown in momentum, and sales are receding from the rapid pace seen earlier.”

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