In 1956, there were 81,000 heavy-duty trucks on the road, pulling about 67,000 trailers. About less than half of the trucks were diesels. OEMs back then were mostly White, Mack and International Harvester.
The estimated value of the heavy- duty aftermarket at that time was less than $400 million, according to Stu MacKay, president of MacKay & Company.
Today, there are more than 3 million heavy trucks and the OEMs have doubled. MacKay says there are about 4.8 million trailers, and the estimated value of the aftermarket is about $30 billion.
According to a January presentation made by MacKay’s colleague John Blodgett at Heavy Duty Aftermarket Dialogue, while the sheer size of the heavy duty aftermarket has grown by about $2 billion from 2014 to 2015, dealers picked up about 2 percent of the available work.
That’s about the size of the audience independents lost.
Blodgett says dealership gains come mostly from emissions components where they have the upper hand, but data shows members of heavy-duty distributor groups like VIPAR Heavy Duty and HDA Truck Pride also picked up 2 percent.
If you’re totally independent, that’s 4 percent you’re not getting right off the top.
There is roughly $30.1 billion dollars in the aftermarket up for grabs.
The aftermarket pie is bigger than it has ever been, but there are more seats at the table than ever before. Taking into account tires, fluid and lube changes, hard parts replacement and all those little “uh ohs” that pop up over the life of a truck, the MacKay & Company team say repairs and service cost a fleet, on average, $20,600 each year on each unit.
That’s $7,200 in parts; $2,900 in tires; $600 in oil and lube and $9,900 in service costs. Per truck. Per year. Depending on trade cycle, that could quickly surpass the cost of the truck itself.
The market for Class 8 aftermarket replacement is a $61.5 billion business. The largest slice of that pie — $29.6 billion — is in service. Up next, at $21.5 billion, is parts. At $8.6 billion, tires make up the third largest expense with oil and lube bringing up the rear at $1.8 billion.
The MacKay & Company team also says between years 1 and 3 aftermarket costs settle around $12,000 per year per truck. Years 4 through 6 fl eets can expect that to more than double to around $27,000. Years 7 through 9 are what’s known in the aftermarket as “the sweet spot.”
These trucks have no warranty left, are fraught with teardowns and rebuilds, and their owners have probably long left OEM parts on the shelves. Trucks in this timeframe will set you back just north of $30,000 per year per truck. Years 10 through 12 settle back down to about $22,000 and if you can squeeze three more years out, you’ll save about another $1,000 per year per unit, mostly a savings in parts.
The aftermarket is growing and so are service opportunities, but the dealers and big businesses are carving out bigger slices of a bigger pie.
Opportunities are out there, and they are growing, but the independent guys and gals out there have got to get out and shake the bushes.
Otherwise, all that will be left is a smaller slice of a giant pie.
