In December, PLI was 5.7 percent lower than December 2018 and has been below the same period a year earlier for five consecutive months.
“In the past few months, PLI has gone from signaling slowing parts aftermarket sales growth to signaling a decrease in parts aftermarket sales,” says Chris Brady, CMVC president. “In the short-term, weakening fleet cyclical factors are overwhelming positive vehicle demographic population factors resulting in a decrease in parts aftermarket sales. In addition, fleets corrective actions to weakening cyclical factors will be a drag on parts aftermarket sales in the near term.”
CMVC adds PLI was designed to be a short-term forecasting indicator of U.S. commercial vehicle parts aftermarket sales by signaling peaks/troughs and inflection/turning points in parts aftermarket retail sales due to changes in the fleet business environment as a result of cyclical changes in the fleet business environment. PLI does not measure changes in trend factors, such as vehicle demographics, that have a medium- and/or long-term influence on parts aftermarket sales, since changes in trend factor variables lag the fluctuation and turning points in parts sales related to changes cyclical factors related to the fleet business environment.
Additionally, CMVC notes trend factor variables are not good predictors of changes in parts aftermarket sales related to changes in fleet business conditions. A composite index was constructed to signal fluctuations in CV parts aftermarket retail sales, since the contribution of one data series over time differs from parts sales, so a composite index comprised of multiple data series is a better predictor of fluctuations/turning points in parts sales as the composite index gains better predictive powers from diversification, CMVC says.
