Old year 2008 is now a not-so-distant memory and we can begin afresh with 2009. Although I am personally optimistic about the prospects for this new year, I can't discount the bad news that is already beginning to be reported. This afternoon, Ford announced their sales were off by 32% in December. At the end of the week, we'll hear the latest on U.S. unemployment, and it is not likely to be a good report.
That being said, I would like to reiterate some of the good signs we are seeing for the automotive aftermarket for 2009:
- There are still more cars being driven on the road today than at any time in the U.S. history. At some point, they will all need some sort of service - whether it's tires, brakes, air filters, oil changes - at some time this year they will require the expertise of an aftermarket professional.
- New Products are still being developed and brought to market for this industry. I will be at the Mac Tool Fair next weekend and I guarantee there will be dozens of new products to review that were not available as recently as the AAPEX Show.
- Consumers are holding onto their vehicles for longer periods, and need to keep them running for longer periods. This is good for the aftermarket.
- Winter has just begun in some places and has already created quite a bit of "opportunity", due to ice storms, snow storms, and generally messy weather. Thank you Mother Nature.
Again, it's quite early in the new year, just 5 days into it and my first day of work - so... Here's my prediction for 2009:
Expect the first quarter to be down double-digits if you are in the distributing or manufacturing sector. (Here's a plug for advertising - if you want to take market share from your customers, now is the time to advertise your brand, your product, your name - all professors of marketing 101 will tell you this is sound logic, though your accounting department might have a tough time approving the expenditure.) Layoffs will continue into February, then taper off as companies find a new proift equilibrium for their business.
Good independent repair shops should see solid business opportunities throughout the year, as will the auto dealers who pay attention to their market share and bottom line. There is no question that we can expect several hundred car dealerships to close up shop this year. We are "over-inventoried".
By the 2nd quarter, we should start to see the distributors and manufacturers pull up from their dark pit of slow/no sales. Though it will be slow, I believe we will start to see growth again by the 2nd quarter.
And on an entirely random note, Pat Hingle (also known as Commissioner Gordon in the Batman movies) died today at age 84. Why mention him in this blog? Well because his last role was in an automotive-related movie: Talledega Nights: The Ballad of Ricky Bobby. So, he was a friend (0f sorts) of the industry and we will miss him. Sleep well Commissioner Gordon!
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3 comments:
I am shocked that 13 people that this blog was sent to resonded that the government shouldn't bail the auto industry out. This is a loan program, not a gift like the wall street crooks.
Our economy will look much worse if the automakers can't find ways to bring their companies back to life.
Grip a grip people!
Anonymous - thanks for your comment. The response is interesting, considering that the majority of my readers come from within our industry. The last time our government loaned money to the automotive industry, Lee Iococca paid it back with interest. I'm not sure we can expect the same return from Wall Street, Fannie Mae/Freddie Mac, local governments, or any other institution with their hand out. Time will tell.
Forget about getting any returns from Wall street right now... They've already shown us who they really are.
Now the automotive industry..that's different...we're the reason wall street exists. We buy...we pay, we don't just take, we give.
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