OSS Association Evaluates the Third Quarter of 2024!
OSS Association Evaluates the Third Quarter of 2024!
Excessive Cost Increases Have Been the Automotive Aftermarket Sector's Biggest Challenge for the Last Three Quarters!
Starting 2024 cautiously, the automotive aftermarket sector continued its stagnation in the third quarter. Despite a decline in sales and exports in the third quarter of 2024, the sector maintained its employment levels. The sector anticipates an average 1.31% decline in domestic sales in dollar terms for the final quarter of the year. According to the 2024 Q3 Sectoral Evaluation Survey of the Automotive Aftermarket Products and Services Association (OSS), domestic sales decreased by an average of 1.08% in dollar terms in the third quarter compared to the same period in 2023. Among producer members, 30.8% are planning investments in the coming three months, while "excessive cost increases" remained the top issue for the third consecutive quarter. The survey also highlighted "cash flow problems" as a significant challenge. OSS Association President Ali Özçete stated, "Despite a cautious start to 2024, the automotive aftermarket sector has maintained its stagnation through the third quarter. Notably, employment levels were preserved despite declining sales and exports, which, while indicating workforce stability, also reflect a contraction in economic activity. Alongside these trends, rising costs and cash flow issues remain core challenges for the sector."
The Automotive Aftermarket Products and Services Association (OSS) assessed the third quarter of 2024 with a survey conducted with its members, focusing specifically on the automotive aftermarket sector. According to OSS’s 2024 Q3 Sectoral Evaluation Survey, the sector continued its stagnant trend through the third quarter. Domestic sales declined by an average of 1.08% in dollar terms compared to Q3 2023. Distributor members saw a 0.38% increase in sales in dollar terms, while producer members experienced a 3.27% decline.
Sales Expected to Decline in the Final Quarter!
The survey also presented expectations for the final quarter of 2024, revealing an anticipated 1.31% decrease in domestic sales in dollar terms. Among OSS members, 13.9% noted an improvement in collection processes from the second quarter’s 40.9% to 44.3% in the third quarter, while 35.4% observed a worsening trend.
Producers Maintained Employment Levels!
Of the surveyed members, 35.4% reported an increase in employment in Q3 2024 compared to Q2, while 43.1% maintained stable employment. Only 21.5% noted a decrease in employment. Employment levels for producer and distributor members were similar.
Rising Costs Among the Sector’s Major Issues!
One of the most striking sections of the survey focused on the sector's problems. The primary issue observed by members in Q3 2024 was "excessive cost increases," cited by 72.3% of respondents, followed by "cash flow problems" at 60%. Additionally, 52.3% highlighted "loss of business and turnover," and 36.9% pointed to "shipping costs and delivery issues" as other major concerns. Around 29.2% of respondents reported "employment issues," while 15.4% cited "regulatory changes." Furthermore, 12.3% mentioned "supply problems" as a significant challenge.
Investment Plans for the Next Three Months Rose to 27.7%!
The survey also examined the sector’s investment plans. According to the survey, 27.7% of members plan to invest in the next three months, reflecting an increase from the previous period. Among producer members, the investment intention rose from 13% in the previous survey to 30.8%, while for distributor members, this rate went up from 24.3% to 25.6%. Additionally, 49.2% of respondents expect the sector to remain stable, while 9.2% foresee improvement and 40% anticipate deterioration in the next three months.
Production Capacity Utilization Rate at 76.15%!
Producers’ average capacity utilization rate was 76.15% in the third quarter of 2024, up from 75.22% in the second quarter. Compared to the same period in 2023, members’ production declined by 1.15% in Q3 2024. Meanwhile, exports increased by an average of 2.31% in dollar terms compared to Q3 2023.
Commenting on the data, OSS Association President Ali Özçete said, "Despite a cautious start to 2024, the automotive aftermarket sector has continued its stagnation in the third quarter. Among the most notable elements in the sector are the preservation of employment despite declines in sales and exports, which, while providing stability in terms of workforce, also indicate a contraction in economic activities.
The expectation of an average 1.31% decline in dollar-based sales in the final quarter suggests the sector's weakness will continue. However, the increased investment plans among producer members compared to the previous survey indicate a more optimistic long-term outlook, with companies becoming more willing to invest despite uncertainties. Alongside these developments, cost increases and cash flow issues remain core challenges for the sector. The slight increase in capacity utilization and the positive trend in exports compared to the same period last year offer a glimmer of hope for recovery in the sector."