In part one of our interview with Pearson Ham Group’s Ben Martin, we explored the company’s takeover of Factor Sales. Here in part two, the group director considers the automotive aftermarket itself.
Q. Since the takeover, what trends have been observed so far?
A. “Prices are higher: the final quarter of 2022 saw typically strong motor factor sales in the brakes and service parts catalogues. It was a fantastic quarter for suppliers in the lubricants and fluids market, with the catalogue showing 17.4% revenue growth when compared with the same period in 2021.
“But lower volume supplied: nearly all of our classification catalogues saw a decrease in the number of units sold in Q4 2022 when compared with Q4 2021. This is a likely effect of double-digit price increases and macro-economic headwinds. It is an indication that factors need to make sure they are correctly optimising price against demand to drive continued sales growth.
“Last year saw growing inflation pressure across the UK and the automotive aftermarket experienced the full effects of this; the average price of parts supplied by factors increased by just over 10% across 2022, although there was significant variation between different catalogues and categories.”
Q. What health is the automotive aftermarket in at present?
A. “If you compare motor factor revenue in the second half of 2022 with the same period in 2021, the UK IAM grew by just 0.2%. We assess that this movement was due to an 11.4% decrease in the number of parts sold (volume effect), a 13.2% increase due to higher prices and a 1.6% decrease due to a change in the sales mix of parts sold (mix effect).
“On the face of it, this does not say amazing things about the health of the UK IAM, where growth appears to be driven by rising prices. However, the current economic climate makes market health difficult to assess. Certainly, there is significant variation in growth rates between different product catalogues and categories, and growth rates appear extremely dynamic. Monitoring sales, volume, and price trends in the first half of 2023 will be vital for determining success in a difficult marketplace.”
