Automotive Aftermarket Industry Update Q2 2025

• Navigating through the various market challenges of 2025, the U.S. automotive aftermarket continues to demonstrate notable momentum. The light duty aftermarket in the U.S. is poised for substantial expansion, expected to reach $435 billion in market size by the end of the year and exceed $500 billion by 2028⁽¹⁾, outpacing pre-pandemic growth rates
• A key factor fueling this growth is the increasing vehicle age due to sustained general inflation, high new and used vehicle prices, and increased borrowing costs. In 2025, the average age of vehicles in the U.S. rose to 12.8 years⁽²⁾, marking the second consecutive year of a two-month age increase
• While new car registrations saw a recovery in 2024, a steady 4.5% scrap rate demonstrates car owners’ interest in retaining older vehicles for extended periods⁽²⁾. This trend is a significant growth driver for aftermarket parts and repair services
• Moreover, the recent hike in U.S. tariffs on imported steel and aluminum to 50% is expected to increase production costs for vehicles. Expected to be passed through to consumers, these added costs would provide additional incentive to retain existing vehicles
• The tariffs also extend to auto components and replacement parts made from impacted metals such as steel and aluminum. As input costs rise, businesses are likely to increase retail prices to customers, leading to elevated repair and maintenance charges
• With wallets shrinking, aftermarket consumers are increasingly turning to cost-effective solutions such do-it-yourself (DIY). This shift is boosting sales for DIY product categories, including motor oil and filters, as well as budget-friendly brands of tires, cleaning products, and wiper blades

― According to Circana⁽³⁾, nearly one-third of car owners now change their vehicle's oil themselves to save money, rather than use professional services

• Independent repair shops are also expecting intensified competition from dealerships, which are shifting focus to servicing older and used vehicles in response to dampened new vehicle sales. Dealerships are leveraging their brand, OEM parts access, and advanced infrastructure to become a viable option for specialized services
• Meanwhile, mechanical repair shops are experiencing rapid growth in ADAS (Advanced Driver Assistance Systems) calibration services. As more ADAS-equipped vehicles move beyond their warranty period and others increasingly integrate such technologies, there is significant demand for skilled services and updated tools
• In this shifting landscape, M&A investors continue to pursue top-tier assets which are receiving high valuations and considerable interest from acquirors. Notably, businesses focused on aftermarket services, which tend to be trade policy-agnostic and less impacted by tariffs, have become very attractive acquisition targets

Footnote: ⁽¹⁾ 2025 Joint Channel Forecast report from the Auto Care Association, MEMA Aftermarket Suppliers and S&P Global Market Intelligence; ⁽²⁾ S&P Global Mobility; ⁽³⁾ February 2025 Circana consumer survey;