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Automotive Aftermarket Suppliers Feeling Squeeze of Rising Fuel Prices

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Rising fuel prices are significantly impacting automotive aftermarket suppliers’ costs and revenues, according to the latest "Aftermarket Supplier Barometer" from the Automotive Aftermarket Suppliers Association (AASA).

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“Our most recent quarterly survey of members, reported in our ‘Aftermarket Supplier Barometer,’ shows 97 percent of suppliers were impacted by rising fuel prices on the cost side, 25 percent substantially," said Steve Handschuh, president and COO of AASA. "While there has been a lot of coverage of the impact of miles driven on resellers, aftermarket suppliers also have been hit hard on both the cost and the revenue sides."

Added Paul McCarthy, AASA vice president of industry analysis, planning and member services, "Our latest Barometer shows that while the performance and sentiment of aftermarket suppliers is still positive, the trend is weakening from recent boom quarters. Sentiment is softening primarily due to the fuel and raw material price increases we’ve experienced throughout 2011.

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The AASA Aftermarket Supplier Barometer revealed that the number of respondents who are more optimistic about their business’s outlook have dropped from previous levels.

“Most strikingly, the number of respondents who’ve become more pessimistic grew dramatically. The impact of fuel and raw material prices is clearly weighing on expectations,” McCarthy said. "Given those concerns, it’s not surprising that the AASA Aftermarket Supplier Barometer shows the cost of raw materials as suppliers’ top concern by a wide margin."

Added Handschuh, "The big questions for the second half of this year include: will the economy and the aftermarket remain resilient – and will the job market keep recovering – despite the headwinds of higher raw material and fuel prices? We will continue to track these concerns and others in future Barometers. Hopefully, recent drops in fuel prices will cause these trends to reverse, and the outlook to improve, in future Aftermarket Supplier Barometers."

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Another issue surveyed in this quarter’s AASA Aftermarket Supplier Barometer was the impact of the Japanese disasters on the automotive aftermarket.

"While the Japanese disasters have not had a major impact on the automotive aftermarket, a significant portion of Barometer respondents have had to deal with parts shortages and seek alternative suppliers," McCarthy said. "However, several suppliers noted that the repercussions of the Japanese disasters had yet to be fully felt by the aftermarket – the greatest impact is likely to be in Q2 and Q3 this year."


More information:

AASA

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