GCG’s Q3 2024 Automotive Aftermarket Industry Update provides an overview of the latest trends in the sector, including recent performance, valuation multiples, and the state of the middle-market M&A environment.

Key findings include the following:

• Consumer Trends: The aftermarket industry is seeing a divergence between discretionary and non-discretionary products. Discretionary categories like vehicle customization are struggling due to low consumer sentiment, while maintenance products and services are thriving as consumers maintain older vehicles instead of purchasing new ones.
• Technological Impact: The rise of EVs and advanced vehicle systems has increased demand for tech-enabled platforms that provide parts, services, and solutions. These platforms are driving investments in digital distribution and dealership software.
• Market Performance: Non-discretionary sectors, including parts suppliers and service providers, are performing below the S&P 500 but show resilience due to consumer tendencies to prolong vehicle use. Meanwhile, discretionary sectors remain under pressure but may rebound with improving consumer sentiment.
• M&A Activity: Middle-market M&A activity in Q3 2024 showed modest growth, driven by strategic acquisitions focusing on operational efficiency and consolidation in high-margin categories like collision repair and maintenance services. Private equity continues to play a significant role in niche consolidations.

Click here for the full update.

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