Those who know me best also know that I am generally happy to share my opinion on many things in the automotive  space. Still, a recent call from an industry contact caught me by surprise. It wasn’t so much the specific topic, as it was the fact that the impetus for the call came from something published by another Canadian media outlet.

The subject involved the decline in the U.S. jobber population, as detailed in a report by noted researcher Lang Marketing.

That report presented a picture of the jobber market as declining quite significantly over time, and even more so during the pandemic. But it was also quite specifically an analysis of the U.S. market.

So the question put to me was, what did I think? Was this in fact what I was seeing in Canada?

The short answer is no; it was one of the key points of divergence between the Canadian and U.S. markets that I had understood to be true for some time.

There seems to be a growing consensus that Canadian and the U.S. markets are diverging, though to be fair that thinking hasn’t gelled yet.

But the very makeup of the jobber segment of Canada‘s aftermarket is quite different from that of the U.S.—less retail reliant here, generally fewer players in given local markets, and so on.

My position on this wasn’t really a revelation for person on the call; we both agreed there were some significant differences in the concentration of jobber outlets in U.S. centres versus Canada, and a number of other structural differences also.

In fact I explained that those key differences contributed to why we had elected not to report on that U.S. research; that it would be misinterpreted as being an indication of what was going on here, north of the 49th parallel.

To my mind, that was the right call, even more so considering the concern it caused among Canadian aftermarket professionals.

So with this in mind though, this is what I have seen: a trend to consolidation at the wholesale and distribution levels, driven by ever-expanding inventory demands, and driven also by the need to become more efficient with that inventory, as well as business costs in the face of price pressures. It is also driven by ageing ownership among the jobber segment.

On that last point it is my belief, without any research data to back it up, that momentum for mergers and acquisitions is building; owners who perhaps had a plan to exit in a few years have brought those plans forward. Added to this are a few who may have paused their plans for the past 24 months or so due to the pandemic.

I should note that the dynamic in the jobber market is very different than at the ASP level, where the greying of the ownership group is having an impact on closures.

It’s actually pretty understandable, in the face of a revolutionary set of changes and the potential for accompanying investment requirements in a business, to have some owners at the ASP level simply decide that, without a firm succession plan or even a real estate footprint, it’s time to call it a day.

But in the jobber world, there are very few if any truly weak players left. Even the outright independent players do a bang-up job in local and regional markets.

And there’s lots of evidence to support the assertion of a robust market: Lordco Auto Parts’ continuing Alberta expansions; acquisitions of players like Parry Automotive by Ideal Supply; the UAP acquisition of Pièces d’auto Simon André in Trois Rivieres, Vast-Auto’s recent acquisitions of Canadian Auto Parts Suppliers and Pièces d’auto J.P. Côté; and Bestbuy Distributors’ addition of a number of shareholders over the last year or two.

I also take commitments like the Sutherland Automotive recent decision to take on the naming rights of Bridge City Speedway in Saskatoon as indications of long-term confidence in the market.

Contacts in the industry tell me there is hardly a month goes by where interest isn’t expressed in acquiring of starting a new jobber operation.

So while there are certainly always going to be adjustments, overall the jobber landscape is quite robust in Canada and in fact, there is some evidence to suggest that entrepreneurs, both from inside and outside of the aftermarket, see it as an opportunity.

Daresay a made-in-Canada opportunity.

Andrew Ross

Publisher and Director of Content

AndrewRoss@jobbernation.ca