Gas or Brake for Automotive Products, Services?

Published in CSP Daily News

Modified driving patterns likely to impact sales

PORT WASHINGTON, N.Y. -- Automotive products and services companies are hoping that falling gasoline prices will lead to increased driving. According to consumer and retail information company The NPD Group, automotive maintenance and repair activities may be less robust in 2007 if miles driven do not rebound.

The increases in miles driven in 2006 are the smallest in more than 25 years. And since consumers base their automotive maintenance intervals on mileage, fewer consumers expect to perform automotive maintenance and repair this year versus last [image-nocss] year.

Some 80% of Americans base their automotive maintenance intervals on mileage, with the average oil change interval occurring at 3,840 miles. Driving fewer miles could mean there would be fewer maintenance intervals each year. NPD reported that only 9% of consumers expect to perform more maintenance and repair this year versus last year, while 10% believe they will perform less maintenance and repair.

In order to weather the storm, manufacturers, retailers and service providers must educate consumers about the need for regular maintenance. While consumers do not appear to be enthusiastic about repair and maintenance in the next year, 12% of consumers report that they will spend more this year on vehicle appearance; only 5% will spend less.

Spending on vehicle appearance could be a real bright spot in the market in 2007, said David Portalatin, director of industry analysis for NPD. Companies might consider offering product bundles and/or service packages that cross-promote appearance and maintenance items to make the most of the appearance-oriented consumer purchase occasion. He further suggested, Another option could be to ensure when consumers visit a retailer or service outlet for repairs, that they are also cross-sold maintenance products/services to capture more unperformed maintenance.

A representative sample of 1,420 consumers were interviewed from NPD's online panel from Oct. 6-12, 2006. NPD's online consumer panel consists of more than three million registered adults and teens who have agreed to participate in surveys, providing NPD and its clients with insight into trends, purchasing, consumption, ownership and usage.