As I write this column, the MLB All-Star game has just been played (and what a game). Which means it is July, which means it’s hot, which means we are halfway through the year.
We started the year with our annual forecast in January — when it is not so hot — at the Heavy Duty Aftermarket Dialogue (HDAD) Conference in Grapevine, Texas. (Next year’s HDAD is set for Jan. 19, 2026). At that time, we forecasted the aftermarket to be up 3.9% in 2025 compared to 2024, with a price factor of +2.0%.
Our next forecast update will be out in August, and this process includes reviewing a variety of measurements we have from those on the front lines of the aftermarket, as reported in our ongoing reports.
First, let’s explain exactly what has happened with tariffs and what will happen.
Quite frankly, we do not know. If somebody tells you that they do, it’s at best a guess. What we do know is that since Liberation Day on April 2 (still not sure why I had to work that day), not too many deals have been executed nor have consistent tariffs been put in place.
What has happened is a lot of activity related to concerns about the effects of tariffs and the three I’s: advanced purchases of Imports to avoid potential tariffs, buildup of Inventory in some cases, with the goal of avoiding potential future Inflation.
The challenging part — this is business activity driven by concerns of potential government actions, not actual business activity. Like the supply chain issues from the pandemic, this is another issue we can complain about but have to deal with.
From our monthly DataPulse Plus report, which is based on surveys with truck dealers, independent parts distributors and fleets, on average, parts sales are flat year to date. Truck dealers’ parts sales are +0.2% year to date through May and independent parts distributors are at -0.3%. If you take out price, both dealers and distributors are down. Fleets’ revenue miles are also basically flat (+0.4%).
[RELATED: Tariffs? We don't need no stinking tariffs]
Part of what is driving this is service labor sales. Truck dealers report negative year-over-year service labor sales while distributors who offer service remain positive, but averages have begun to decline. Additionally, we have heard some discretionary service is being put on hold.
Evaluating inventory changes can be difficult given the number of driving forces, some related to internal business activities and others to economic conditions.
Tariffs, which are not necessarily related to “normal” business activity, have caused some respondents to pre-buy in an effort to avoid potential tariffs while others have delayed purchases due to uncertainty in the current economic environment. Fleets also have reported reluctancy to replenish inventories at normal rates, relying more on their suppliers to provide parts as needed.
Inventories are influenced by a number of factors, some related to internal business activity and others related to economic factors and the like that are driven by outside influences. Some respondents are holding back on inventories due to concerns of an economic slowdown, some pre-bought parts to avoid potential tariffs, both of which are driven by outside factors, not related to “normal” business activities.
From our quarterly DataPulse Fleet Utilization Report, fleet utilization was up in the first quarter but most likely driven by retailers’ pre-buy activities. The second quarter utilization report will be out soon.
From our new Mexico Heavy Duty Aftermarket Pulse report, based on surveys with truck dealers and independent parts distributors, the results are more positive, but concerns about tariffs also exist in Mexico. Parts and service labor sales for both channels were up in the first quarter compared to the fourth quarter in 2024. Truck dealers performed better than independent distributors on parts sales in Q1 2025 compared to Q1 2024.
So, where are we on a forecast for the balance of 2025? Based on where we are today, I would think our forecast may stay the same; however, the impact of price will be higher and the impact from activity lower.
