Paul Sell, MD of Trend Tracker, delves into the October trends shaping industries, particularly in the vehicle repair market. As winter looms, the resurgence in repair volumes hints at a transition from reduced lead times during the summer. The macro trends surrounding the repair market pose challenges, notably the lingering impact of inflation on wage rates, which, though expected to stabilise, have surpassed CPI, resulting in a modest 1% pay increase year on year.
“October brings signs of winter coming, following a summer of reduced lead times a new rise in repair volumes. With several macro trends surrounding the repair market creating challenges-
- Inflation not dropping fast enough leading to continued wage inflation (which is predicted to now settle), which has now surpassed CPI, but in real terms only c1% pay increase year on year.
- A tight job market with minimal change, vacancies still dropping (although still higher than pre-pandemic), combined with businesses still dealing with high inflation.
- Road usage back to pre-pandemic levels, and Car Sales now surpassing pre-pandemic levels. EV sales steady but not growing to the extent required with market share of 15.6% not a big increase on the 14.8% this time last year. However, EV charging infrastructure growth continues with almost 5k charging locations around UK.
- Used car market prices fall in October by 4% (a realignment not a crash) reflecting a growing new car market.
- Cycle times have improved over the summer months with lead times falling, parts availability better, helped by shipping reliability improving. but still some outliers that create real challenges for some models.
- Repair costs continue to rise but to a lesser extent, with year on year increases now 8% on average, closing the gap between repair inflation and CPI. Salvage indicators show the big difference in the average sale price and average vehicle age of EV vehicles vs. ICE vehicles which portrays a market challenge (writing off electric vehicles less than 5 years old due to type of damage or concern about potential hazards). Green parts demand remains steady but with some new demand, a new entry in October being Tesla ‘green parts’ repairs.”
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