OEC Blog

Good news for your collision parts business

Good news for your collision parts business

Here are just a few statistics that may impact your dealership’s parts sales. Overall, it’s a bright outlook for the industry as a whole, which means the demand for parts should be strong.

  • According to CollisionWeek, over 275 billion vehicle miles were driven in June 2015, an almost 4% increase year over year with 2014 and the largest ever volume recorded for the month of June
  • The U.S. length of rental (LOR) increased in the second quarter of 2015, according to stats from Enterprise Rent-a-Car. Average LOR was 11 days overall. Is this a good number or a bad number for the industry? It shows that more lengthy repairs are taking place … is there an opportunity here for you to cut down on shop repair times by providing shops with quality collision parts?
  • In 2014, collision claim frequency for private passenger auto insurance in the U.S. has increased for the first time since 2005. CCC Information Services Crash Course attributes this to improved employment rates, as well as falling gas prices which in turn led to more miles driven.
  • 2014’s Polar Vortex also led to more collision claims, according to CCC. Continuous snow and ice across many parts of the country caused pile-ups and fender benders due to the treacherous road conditions. With an El Nino predicted for this coming season, the rainy conditions across some parts of the country may cause some additional trouble for motorists.
  • New vehicle sales on the increase in 2014 (6%, according to CCC) mean more newer cars on the road – which will lead to more repairs than with older vehicles that might be declared a total loss. We should see a similar number at the end of 2015 due to favorable economic conditions, as well as lower gas prices.
    • This had a positive effect on OE parts purchases vs. aftermarket, with OE gaining some market share.
    • OEM model redesigns and continued OE price matching also played a part in the increase
    • Import and luxury vehicle sales also saw growth in 2014, leading to more parts selling opportunities for dealerships representing those manufacturers.
    • Advances in electronics in vehicles has led to more parts needed per repair. CCC reports that the average number of parts on a 2003-2007 model year Honda Accord collision loss has risen from 10 parts to 12.5 for a 2013 model year.
  • The Body Shop Business 2015 industry report notes that 40% of shops choose OEM parts when making collision repairs. Shops also report that 93% of OEM parts provide an acceptable fit for the repairs being made, compared to 54% of certified aftermarket parts.
  • Shops would prefer to use fewer parts suppliers, also according to BSB. Be sure you are one of their preferred suppliers by providing competitive pricing and, if applicable, access to the automaker program discounts!
  • Health-wise, a majority of shops feel their business is financially better off today than it was five years ago, and they also predict growth for their business in the next five years. That’s great news for all involved!