By John Blodgett, MacKay & Company
A few months ago, in these pages (I realize there are no pages anymore), I wrote a column on going to the mattresses. The focus of that column was about how most of us have had good lives and haven’t really had to live through a dramatic national or global event like WWII, so this was our time to do what we needed, whatever we could to help our families, companies and nation get through this global pandemic.
At the time, late March, I thought we had a month or so of inconvenience and the resulting negative impact on our economy and the aftermarket. After all, we were told in Illinois employees could come back to work April 6 and it didn’t make sense to wear masks. Ahh, the good ole days.
Things didn’t turn out as expected in late March, so in early May, MacKay & Company provided our first pandemic forecast for the medium- and heavy-duty truck and trailer parts aftermarket. In total, our initial estimate was for the aftermarket to be down 19.6 percent from our initial 2020 forecast.
In early April, we also began publishing a new report to track the impacts of the pandemic on dealers, distributors and fleets. So where is the aftermarket now compared to April? We are in a better place than we were then — but we are also far from back to normal conditions.
Fleets in April reported their businesses were down more than 20 percent compared with pre-pandemic, with obvious variety by vocation. School bus fleets, for example, didn’t return many surveys because they weren’t open. Now, fleets report being about 10 percent below pre-pandemic levels, on average.
Dealers (truck and trailer) and heavy-duty independent parts distributors also reported a rough April, with parts sales being down 15 to 20 percent compared with pre-pandemic; this has retreated to being down 7 to 9 percent in late June.
There have been other changes and positive signs. Dealers and distributors report selling more parts online, which, when you consider many sales folks can’t visit fleets, this makes sense. Fleets’ COVID-related concerns about dropping off vehicles or taking vehicles into service providers has decreased, but not completely gone away.
Later this month, we will be updating our aftermarket forecast for the balance of 2020 and beyond. The forecast for 2020 will, in part, depend on what we hear from fleets on their vehicle usage in Q2 and their thoughts on the outlook for the next two quarters. The initial results appear to indicate that Q2 was not as bad as predicted, so our 2020 forecast may be less negative than our original -19.6 percent.
As for concerns? There are plenty of them out there. What is going to happen with schools? Open or not open? Some mix of both seems most likely. People’s ability to go back to work full-time will directly be impacted by this, as well as their earnings and spending abilities. Vaccine or no vaccine? Another COVID breakout is a concern as well.
So, we still need to continue hitting the mattresses for the foreseeable future. The best news is your efforts are working. Fleets, dealers and distributors report their suppliers and their teams are providing very high levels of customer support despite issues with getting parts from outside the U.S., coupled with the pandemic, the riots, the murder hornets … have I forgotten anything?
John Blodgett has worked for MacKay & Company for more than 20 years and is currently vice president of sales and marketing, responsible for client contact for single- and multi-client projects. He can be reached at email@example.com.
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