Section XI-Distribution Channels OE DISTRIBUTION The OE (Original Equipment) channel includes vehicle manufacturers and their suppliers which ship products to Vehicle Dealers who install these products in their service bays and/or redistribute them through their parts departments to Independent Installers and/or Do-It-Yourselfers. 2008 and then began to decline. OE channel 2016 volume fell to $19.5 billion, a 0.6% average annual decrease over ten years, moderated by its $0.2 billion 2016 increase. RECEDING PRODUCT SHARE Dealer product redistribution to Independent Installers generates a substantial portion of OE channel volume and represents a large share of the average Dealer's profits. OVER $19 BILLION IN PRODUCTS The OE channel recorded 18.2% of 2016 light vehicle aftermarket product volume, less than its 23.2% of the light vehicle 2006 aftermarket at user-price, a level at which it peaked in car and light truck product share from 2005 to 2007. OE distribution generated $19.5 billion in 2016 aftermarket product sales, a $207 million increase from the previous year at user-price. Light vehicle products passing through the OE channel climbed from $20.7 billion in 2006 to $21.1 billion during The OE channel did not contribute to total car and light truck aftermarket product growth ($17.8 billion) between 2006 and 2016, due to the channel's $1.2 billion product sales decline over these 10 years, at user-price. OE DISTRIBUTION 2006-2016 2006 2015 2016 Product Volume..................................... $20.7............................$19.3.......................... $19.5 Product Share........................................ 23.2%...........................18.4%......................... 18.2% 2006-2015* 2006-2016* 2015-2016 Average Annual Growth Rate................-0.8%...........................-0.6%...........................+1.0% Volume in $ Billions at User-Price * Average Annual Decline Rate © 2017 by Lang Marketing Resources, Inc. 147 www.langmarketing.comhttp://www.langmarketing.com