Before you can talk about what’s occurring in the truck parts aftermarket, you need to first look at what happened with new truck sales in prior years.
As of 2014, there were 2.9 million Class 8 trucks and an additional 1.5 million Class 6 and 7 trucks on the road. While the number of medium-duty trucks has stayed the same since 1994, the number of Class 8 trucks has nearly doubled in that time, according to Stu MacKay, president of MacKay & Co., speaking at Heavy Duty Aftermarket Dialogue in Las Vegas earlier this week.
For-hire carriers made up 30% of that Class 8 truck population, with construction fleets at 21%, private fleets at 17%. Agriculture, lease/rental and owner-operators make up the balance of Class 8 truck use.
School buses (24%) are the largest share of the medium-duty market, followed by private fleets (17%), lease/rental (15%), and agriculture (10%). For-hire carriers, government and all others make up the balance.
Freightliner has the largest share of the Class 8 truck market (29%), followed by International (17%), Kenworth and Peterbilt (13% each), Volvo (11%) and Mack (10%)
In the medium-duty market, International has 33% of the market, followed by Freightliner (24%), Ford (17%), GM/Chevy (13%) and Paccar (7%).
One of the most significant changes in the market is the growth of captive engines. Today trucks either have captive engines or Cummins engines, MacKay says. In the past fleets had options for captive or for Cummins, Caterpillar or Detroit engines.
Turning to parts themselves, John Blodgett, vice president of sales and marketing for MacKay & Co., said truck and trailer parts grew to $26.19 billion last year and he expects it to continue to grow to $32.43 billion by 2019.
Another big change is the life cycle of parts. Blodgett says that 32 years ago, a typical engine teardown took place at 276,000 miles. Today that same teardown does not happen until after 771,000 miles. Transmissions, which today are replaced at 585,900 miles, were replaced at 182,000 in 1982. This trend is true for other components like alternators, brake shoes, air compressors, and clutches.
Since the highest demand for parts comes when the truck is between seven and nine years old, fleets are likely spending a significant amount of money on parts given that the average age of the Class 8 market was 9.74 years in 2014 and vehicle utilization percentages are relatively solid: 91% for for-hire carriers, 95% for lease/rental, 77% for construction.
MacKay research shows that 37% of the parts replacement is in the power generation area, with undercarriage accounting for 19%, power transmissions 15%, cab and chassis 12%, electrical 8% and other 9%.
Dealers share of the parts business has grown from 34% in 1982 to 46% in 2014. The gain came at the expense of auto parts retailers who accounted for 18% of the market in 1982 but only 4% of the market in 2014.