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Canada’s heavy-duty aftermarket worth $4.2 billion

Posted: January 24, 2018 by John G. Smith

LAS VEGAS, NV – Repairing trucks and trailers is big business in Canada, and it’s getting bigger.

The nation’s aftermarket serving Class 6-8 trucks and trailers was worth $4.2 billion in 2017, and is projected to reach $4.4 billion this year, according to analysts at MacKay and Company.

Parts prices are expected to rise 3.7% because of factors including the Canada-U.S. exchange rate.

“Everything looks fairly positive,” says John Blodgett, vice president – sales and marketing, referring to growth in oil activity, the Gross Domestic Product, and international trade. “Obviously if the U.S. screws up NAFTA and provides some issues there … that could potentially have a negative impact. Hopefully level heads will figure that out and we won’t have too much impact from that.”

Like most other analysts, the team at MacKay and Company was surprised by the 2017 market for equipment sales. In a good way.

The Canadian market purchased about 8,800 Class 6 and 7s, 25,700 Class 8s, and 35,200 trailers. That’s in line with the 20-year averages of 8,300, 26,100, and 36,200, respectively. This time last year, the sales were expected to lag behind. By March, though, it was clear the negative projections were going to be wrong.

The analysts predict sales of 8,500 Class 6 and 7s, 27,600 Class 8s, and 38,200 trailers in 2018.

Last year, the U.S. market purchased 133,000 Class 6 and 7 trucks, 192,000 Class 8s, and 286,000 trailers. Its 20-year average is 135,000 Class 6 and 7s, 186,000 Class 8s, and 217,000 trailers.

“Retail sales is important because it impacts the operating population on the aftermarket,” says Ken Griswold, director – market strategy and sales, referring to the importance of comparing the figures.

Overall, Canada now has 41,000 Class 6 trucks, 148,000 Class 7s, 344,000 Class 8s, and 543,000 trailers, MacKay and Company says. By 2022 it expects the fleet to shrink somewhat, down to 37,000, 144,000, 342,000 and 533,000, respectively.

Any change in the age of the fleet would have an undeniable effect on aftermarket sales.

Trucks in the range of seven to nine years old are in the “sweet spot” for aftermarket demand, Blodgett said. Each amounts to about $8,000 a year in parts, outside of warranty items.

The nature of parts being sold continues to change as well.

Aerodynamic enhancements require fewer parts in the form of fenders and flat brackets, he said. Should electric vehicles become the norm, thousands of moving parts on a truck could be replaced by fewer than 200. Bodies are also incorporating new materials like carbon fiber that will require a new level of training for technicians.

“Technology can only move as fast as people,” Griswold added.

Collision mitigation systems could have their own impact on the aftermarket. Fewer collisions, after all, require fewer replacement parts. Telematics and the Internet of Things also promise to determine when parts are failing or wearing out, affecting purchasing strategies.

Emerging electric truck suppliers like Tesla, Thor, and Nikola are also exploring new distribution channels altogether, Griswold warned.

“They may not follow our traditional channels.”

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