While automotive aftermarket executives do not have high expectations for the United States economy in the next 12 months, they do overwhelmingly (80%) expect to see growth for their businesses. According to Grant Thornton's 2005 Automotive Aftermarket Survey, conducted in cooperation with SEMA and the Automotive Aftermarket Industry Association (AAIA), 84% of the respondents anticipate an increase in their 2006 revenue over the 2005 numbers, compared to 72% that expect their 2005 revenues to increase over 2004.
Most survey respondents report that all cost categories have increased in the past year; with 94% reporting increased energy/fuel costs, 86% have seen an increase in material/product costs, and 83% an increase in insurance and labor costs.
On the labor front, more than half (52%) of the respondents have increased the number of full-time employees in the last year and 56% expect to see an increase in 2006. While 21% report a decrease in the number of full-time employees, only 11% expect to have to decrease staff in 2006. Turnover in the industry is good, with half of the executives reporting a 5% or lower turnover rate.
Other findings from the survey:
12% report being an industry leader; 26% have made significant progress toward becoming an industry leader; 48% have made some progress; and 14% have made no progress.
48% have increased spending on capital equipment, while 33% have decreased spending.
43% have increased spending on information technology, while 27% have decreased spending.
55% report no change in spending for prototype tooling, while 31% have increased spending and 15% have decreased spending in that area.
50% report no change in spending for production tooling, while 39% have increased spending and 11% have decreased spending.
95% consider innovation/product development important to their company's growth and 16% consider it a top corporate priority; however, only 4% received more than half of 2005 sales from new products or services.
For more information, access www.GrantThorton.com.