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Canada’s heavy-duty aftermarket transforming

Posted: January 24, 2017

LAS VEGAS, NV – Truck and trailer sales continue to drop in Canada, but the value of the aftermarket that serves them continues to rise, according to statistics released during Heavy Duty Aftermarket Week.

Analysts with MacKay and Company, which produces DataMac reports into part and component sales, expect the aftermarket serving Class 6-8 trucks and trailers to reach $4.9 billion in 2017, up from $4.6 billion last year. By 2021 the aftermarket demand could reach $6 billion.

It isn’t all about higher sales volumes, though. Recent gains in value have been realized through the higher sticker prices associated with a weak Canadian dollar.

Several factors are also transforming the industry as a whole.

North America’s demand for emission-related components is up 254% alone since 2010, and that’s expected to jump another 42% by 2021. Rather than cleaning Diesel Particulate Filters locally, meanwhile, trucking companies are increasingly turning to factory-remanufactured products, the analysts said.

The sales of remanufactured starters and alternators are also losing ground to new products from cost-competitive offshore manufacturers, according to MacKay and Company. And smaller repair shops are finding it tough to meet the shift from copper to aluminum radiators.

“More service work is outsourced by the fleets, and that means more opportunities for the service providers,” added John Blodgett, vice president of MacKay and Company.

Who actually services the vehicles tends to be based on equipment age. When first owners still hold the equipment, 54% of the service work is completed by end users, 27% by dealers, and 11% by garages. Once equipment changes hands, 61% of end users opt to do the work themselves, with 15% completed by Original Equipment dealers and 18% by independent garages.

Then there is a shift in nameplates to consider.

The aftermarket changed dramatically between 2010 and 2015, says Dave Kalvelage, manager of IT and database services at MacKay and Company. Freightliner’s brand share, for example, increased to 38% from 32%. International’s share dropped 13 percentage points, largely because of challenges with its emission strategy. “There’s been some big changes in the engine market,” he adds, referring in part to Paccar reaching 11% of that market, up from 2%.

The stakes for a share of the available aftermarket are significant no matter whose nameplate is involved.

Overall, Canada had 1.1 million Class 6-8 trucks, trailers and container chassis last year, the analysts noted. That added up to 346,600 Class 8 trucks, down 1% from a year ago; 190,900 Class 6 and 7 trucks, down 2%; and 575,900 trailers and container chassis, which was relatively the same as 2016, with a bump of just 0.4%.

Just don’t expect a lot of new equipment to flood the market in the coming year. While MacKay and Company projects Class 6/7 sales to increase 15% this year, Class 8 sales should drop 25%. Trailers sales are projected to be down 21% on their own. 

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