The total value and number of quarts of motor oil sold in the U.S. automotive aftermarket industry increased 1 percent in 2016, according to retail sales data tracked by NPD Group.
Nathan Shipley, director and automotive aftermarket industry analyst for NPD Group, observed that conventional motor oil continues to decline in sales, while full synthetic and high mileage products continue to grow. The biggest story this year when talking about growth comes from the area known as high mileage, full synthetic, Shipley told a reporter. While hard to quantify, the assumption is that extended drain intervals – along with a number of other factors – are having an impact at retail.
He said the findings are based on NPDs Retail Tracking Service, which tracks sales of motor oil at over 25,000 retail stores in the United States, spanning both the auto specialty and mass merchant channels. Motor oil sales grew 1 percent in both dollars and quarts in spite of a 14 percent increase in promotion count, deeper promotions and strong performance for private label, NPD stated in a news release.
Promotion count refers to the number of advertisements published through in-store circulars. Deeper promotions refer to the level of discounts offered on motor oil, while private label refers to the house brand of oil offered at retailers. We saw price cuts in 2016 for these products as well, he noted.
NPD concluded that overall U.S. automotive aftermarket retail sales amounted to $15 billion in 2016, up 2.9 percent from 2015. Unit or quart sales grew 1.8 percent during 2016, after increasing 1.6 percent the prior year. Meanwhile dollar sales grew 2.9 percent in 2016, after swelling 4 percent in 2015.
Declining retail prices driven by a push for private-label, along with an increase in deeper promotions, is behind this dollar/unit retail dichotomy, in the overall automotive aftermarket, said Shipley Though the dollar sales growth rate has slowed, a number of factors helped the industry to stay on the plus side in 2016. Overall, 2016 had the lowest gasoline prices on record out of the last five years, inspiring consumers to drive more. He also noted that new car sales in 2016 unexpectedly set a record by outperforming 2015s numbers.
NPD said larger trends included an increase in miles driven and new car sales, lower-priced gasoline and unpredictable weather patterns that impacted the industrys annual performance.
NPD forecasts a decline of 1.9 percent in sales for the automotive aftermarket industry as a whole in 2017, which assumes retail pricing moves similar to 2016 and takes into account the latest trends in miles driven and gasoline prices.
Declining retail prices coupled with a slowdown in miles driven in recent months point to a decline in retail dollar sales in 2017, Shipley said. I expect that miles-driven growth will slow, due in part to higher gasoline prices, which were 20 percent higher in the first four weeks of 2017 than the same period last year.
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