RISING FUEL PRICES COULD IMPACT ON AFTERMARKET REVENUES

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Credit ratings agency Moody’s says aftermarket revenues could be under threat from rising fuel prices in Europe.

The company says that as motorists continue to use their cars less the demand for service items and spare parts could fall, impacting on aftermarket revenues.

The agency suggests that some companies could see their credit ratings suffer as a result of the downturn.

Other suppliers whose main business does not come from the aftermarket would only experience a minor effect as the result of a European slump.

Moody’s Vice President and Senior Analysts Rainer Neidnig said: “We expect motorists in Europe to increasingly adopt more energy-efficient driving behaviour or avoid using their cars to keep their fuel spending under control.”

“As this behaviour reduces wear and tear, we could see demand for replacement car equipment such as tyres and brakes to decline, at least temporarily, thereby affecting auto suppliers’ aftermarket revenues.”

The report also notes that higher fuel costs could also impact on the sale of new cars and with that original equipment suppliers as well.

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  1. Rising fuel costs aren’t the major issue here…

    If fuel sales are down by -11% then Tyre sales are also down by -11% as mileages are down by -11%. In turn garages will see a direct impact on turnover as servicing won’t be required as often and all wearing items (brakes, suspension, clutches etc) will also be -11% worn!

    How comfortable are we all with losing 11% of our turnover???

    And still more duty is due on a litre of fuel!