Automotive Aftermarket M&A Update – May 2025

Fragmentation, Robust Demand Boost Automotive Aftermarket M&A Outlook

Capstone’s latest Automotive Aftermarket M&A Update reports that several secular trends have bolstered sector growth and merger and acquisition (M&A) activity.

Long-term demand drivers, including an expanding and aging car parc and a rise in total miles traveled, have spurred heightened spending on automotive aftermarket parts and services. Additionally, prolonged inflation, elevated new vehicle prices, and high borrowing costs have forced consumers to delay new car purchases (apart from a recent temporary surge), supporting maintenance and repair services spending on older vehicles. In 2024, the average age of all light vehicles on the road ticked higher to 12.7 years, while passenger vehicle age grew to 13.7 years, according to Hedges & Company. The total 12-month moving average miles traveled grew to 3.3 trillion as of December 2024, a 1% increase compared to the prior year, according to the St. Louis Federal Reserve. Aging vehicles require frequent maintenance and repairs as components deteriorate with increased milage, providing aftermarket replacement part suppliers and service providers with a growing revenue pipeline.

In the near-term, tariff headwinds have headlined economic discussions to start 2025. However, companies that successfully navigate the new regime will likely capitalize on tariff-induced demand tailwinds for aftermarket parts and services. Already elevated new and used vehicle prices are expected to move higher and continue providing the aftermarket with an increased demand for replacement parts and services as consumers choose to maintain existing vehicles rather than acquire new ones. Moreover, margin accretive opportunities in the M&A market are projected to see significant interest as maintaining margin performance will be challenged under new tariffs. Sector participants may also pursue vertical integration of the supply chain more aggressively, contributing to additional M&A in 2025.

Also included in this report:

• A detailed breakdown of key sector demand drivers, including vehicle age dispersion in the U.S. car parc and miles traveled.
• What pockets of the Automotive Aftermarket sector have been active from an M&A standpoint, and the rationale driving dealmaking.
• Which types of buyers are driving automotive aftermarket M&A, six detailed transaction highlights, and a robust collection of recent deals.
• Insight into the Capstone-advised sale of Conrad’s Tire Express & Total Car Care to Dobbs Tire & Auto Centers.

Capstone Partners’ Consumer Investment Banking Team provides M&A, capital formation, and financial advisory services to the owners of middle market businesses in the consumer and retail industries. Our team partners with leading mid-to-large sized business in the Automotive Aftermarket that serve growing end-markets. For more information on Automotive Aftermarket M&A trends featured in this report or to speak with one of our Consumer Investment Banking Team members about how to grow, value, and/or sell your company, we are here to help. Contact us today to start a conversation.