This document summarizes two studies on automotive aftermarket trends: 1) The repair "sweet spot" of vehicles aged 6-10 years is growing, with the average repair cost increasing as well for these vehicles. 2) Domestic cars are getting older on average, reaching over 12 years of age by 2012, making them the only vehicle group increasing in age and decreasing in number. 3) As domestic cars continue aging, it will have implications for the aftermarket like lower maintenance levels, more demand for value parts, and more DIY repairs, increasing the aftermarket's reliance on domestic light trucks.

1. Slide 1
Automotive Aftermarket Trends
An update from Greg Snyder, Cardone Industries
April 5, 2010
Two recent aftermarket studies show some very interesting news in the
repair channel.
The first study (from IMR) shows that the repair “sweet spot” is growing.
This study also shows that the average repair cost is increasing as this
“sweet spot” grows.
The other study (from Lang and AAIA) shows some startling news. As
domestic cars shrink in new vehicle sales, their average age will continue to
climb. This makes domestic cars the only major vehicle group increasing in
age and shrinking in overall size.
Both of these studies have big consequences for many players in the
automotive aftermarket. The following pages show more detail on these
trends.

2. Slide 2
The “sweet spot” is growing!
$350
$450
$550
$650
$750
$850
$950
$1,050
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
&
up
Source: IMR Inc. Continuing Consumer Auto Maintenance Tracking Study
$889
ave. repair cost
$914
ave. repair cost
Vehicle Age
AnnualRepairCost
In the automotive aftermarket, much is said about the service “sweet spot” being vehicles in the
6- to 10-year old range. According to Polk, 29% of vehicles on the road, or 71 million cars, are 6
to 10 years old. The average annual repair cost for these vehicles is $889. About the same
number of vehicles fall in the 1-5 year range, where they are still typically covered under
warranty. A growing sector is vehicles in the 11 and up range, where the average annual repair
cost is $914. This segment represents 101 million vehicles on the road today, and that number is
increasing.
This is encouraging news for the aftermarket, but it also points to the challenge we face with
SKU proliferation. At CARDONE, we see REMAN as our secret weapon to capture these sales.
The older a vehicle gets, the harder it is to find brand new parts, as existing OE supply runs dry
and new manufacturers struggle with the high cost of low-volume production. Reman is the most
flexible, economic choice for these older vehicles, so we are confident that CARDONE can
support your needs as you maximize the 6 and up sweet spot.

3. Slide 3
Average Domestic Car Age Increasing
Source: 2010 AAIA Factbook & Lang Aftermarket Annual
Year
AverageAgeinYears
9.5
10
10.5
11
11.5
12
12.5
13
2000 2004 2006 2010 2012
The average age of domestic cars on U.S. roads plateaued at 10.1 years during 1999 and 2000,
increasing slowly to 10.2 years in 2001 and 10.3 years by 2002. After stalling at 10.4 years in
2003 and 2004, domestic car average age began to skyrocket, reaching 11.0 years in 2006 and
approaching 12.0 years at the beginning of 2010.
Lang Marketing expects domestic car average age to continue upward, reaching 12.7 years by
2012. This will represent a 26% average-age increase among domestic cars in 12 years.

4. Slide 4
Domestic Car Age Compared to Other
Vehicle Groups
Source: 2010 AAIA Factbook & Lang Aftermarket Annual
AverageAgeinYears
0
2
4
6
8
10
12
14
Domestic Cars Import Cars Domestic Light
Trucks
Import Light
Trucks
Domestic cars are substantially higher in average age than any of the other three major vehicle
groups.
Domestic cars are over one-third older than foreign cars, one-fifth higher in average age than
domestic light trucks, and over 50% greater in average age than foreign light trucks.
Overall, domestic cars in the U.S. are nearly three years older than all other light vehicles
combined.

5. • Lower Maintenance Levels
• A Continued Search for Value Parts
• More DIY Repairs
• Dependence on Increase in Light
Truck Age
Increase in Domestic Car Age Has
Major Aftermarket Implications
Implications Of Domestic Car Age Growth
The soaring average age of domestic cars has four major aftermarket implications.
Lower Maintenance Level
As domestic cars increase in age, the level at which they are maintained generally declines,
particularly in terms of preventative maintenance. Consumers generally perform only necessary
repairs on older domestic cars, especially in the current, hard-pressed economic climate.
Value Parts
Value-priced parts and used (salvage) parts are increasingly selected by owners of older domestic
cars. Overall, owners of older domestic cars are very price-sensitive to repair costs, irrespective
of whether they personally perform the work (DIY) or use a mechanic (DIFM).
Older Domestic Vehicles
A disproportionate amount of repair on the aging domestic car fleet in America is conducted by
Do-It-Yourselfers. Domestic cars comprise the largest vehicle segment of the Do-It-Yourself
replacement parts market.
Domestic Aftermarket Growth Increasingly Depends On Domestic Light Trucks
Domestic vehicle aftermarket growth increasingly depends on light trucks, as aging domestic
cars shrink in number.

6. Slide 6
• Domestic car repair Market is losing
ground to the Import repair market
• What parts will you carry?
• What supplier can you depend on for
the parts you need as the
aftermarket changes?
Fewer Domestic Car Repairs Also
Have Major Aftermarket Implications
Diminishing Aftermarket Stature
The diminishing repair significance of domestic cars is putting the domestic vehicle aftermarket
at risk of losing more ground to foreign cars and light trucks.
This has big consequences for manufacturers, distributors, and installers which depend on
domestic vehicles for the bulk of their aftermarket business.
Cardone is a supplier you can count on to have the parts you need as the aftermarket shifts.