The global automotive aftermarket was valued at US$ 693.8 billion in 2020 and projected to reach US$ 950.09 billion by 2027 with a CAGR of 4.61% from 2021 to 2027.
Regulatory bodies including the U.S. Environmental Protection Agency and the JASMA monitor the environmental impact and built standards related to automotive components such as noise emission level from mufflers and resonators in automotive exhaust systems expected to trigger advancement in the automotive parts. In addition, digitization of sales and service of component delivery and online distribution portals for aftermarket components in synchronization with global automotive suppliers, expected to bring prominent investment from the market players. Because of online and digitized delivery gateways, the automotive aftermarket expected to witness significant growth in the developing countries. In addition, rising trend for online sale of automotive aftermarket parts projected to further boost the market growth in the coming years.
Though, the automotive aftermarket is highly influenced by the digitized gateway pattern, high cost of research & development expected to hamper the market growth. Additionally, the consumer shift towards smart and intelligent automobile parts also uplift the overall cost of the components.
Rise in technological advancement
The demand for aftermarket parts such as catalytic converters and electronic chips to increase fuel economy on older vehicles has risen in response to the demand for environmentally sustainable vehicles. Owners are particularly interested in adding new features to their older cars which serves as a key driver for the market growth of automotive aftermarket industry.
Government regulations aid in market growth
In many countries the government has imposed strict car emission regulations, putting pressure on product manufacturers to produce environmentally friendly and high-efficiency automobile parts for both domestic and international markets that enhances the demand of automotive aftermarket and estimated to pace at increasing rate in the coming years.
Increasing demand for comfort in vehicles
In order to meet consumer demands for comfort and convenience in vehicles, OEMs have launched additional accessories in vehicles that can be personalized in the aftermarket which helps in fueling the development of the automotive aftermarket.
Increase in disposable income
The changing lifestyles, increase in standard of living along with rise in disposable income lead to demand for aftermarket. Increase in disposable income may result in luxurious life therefore demanding for luxury vehicles. Growing number of millionaires in the world who tend to design or remodel their unique vehicles owing to the demand for automotive aftermarket products.
Globalization of Original Equipment Manufacturers (OEM)
The tremendous growth in the global vehicle registration has put pressure on OEMs to accelerate the use of global platforms and modular architecture. This means that the number of vehicles produced will rise rapidly, increasing the demand for spare parts and other car service facilities. This opens more opportunities for the automotive aftermarket companies.
Ratification of vehicles safety techologies
With the growing technological changes, the vehicles are well equipped with sensors which leads to excellent driving behaviour and thereby lessens the wear tear of brakes and other component in vehicles. This factor hinders the replacement of components and hampers the market growth of automotive aftermarket.
High Operational Cost
The cost of vehicle modification is high for most of the population. The parts of vehicles are sold as a premium option to the comparatively upper-class consumers who choose to pay a premium price for them. However, if this becomes more widely used, the price would have to come down so that the common people can afford. Therefore, it hinders the market expansion of automotive aftermarket
In some countries, the vehicles are inbuilt with eco-friendly components to protect the environment from carbon emissions and maintain the atmosphere. The consumers cannot opt for frequent modification for parts which emits more carbon and harms the environment. Hence, this factors restraints the automotive aftermarket.
Increasing in older vehicles and their age -
The average age of vehicles continues to rise with passenger cars and the light truck segment, average age stands at 11.3 years. The older vehicles become; the more parts require remaining on the road. There has been a 14% increase in the age of automobiles from the past six years which serves as a positive sign for the development of the market.
E-commerce changed the automotive aftermarket
The digitalization which is digital influence has transformed the way a consumer makes a purchase. Aftermarket customers read everything possible, including reviews and videos. Year after year, consumers are besieged with online advertising, both on desktops and smartphones. Wheel and the tire websites and aftermarket touch-up paint websites are two fastest growing segments in the industry. Thus, the aftermarket industry is catching up the rest of the world by using smartphone e-commerce technologies.
Widespread of Aftermarket and unorganized industry
Globalization of the aftermarket industry has impacted every intersection of the globe. Automakers are supporting modular architecture i.e., similar parts from various manufacturers can be applied to the same vehicle. Increased global competition for Generic vehicle has several long-term benefits to the automotive aftermarket industry.
Growing complexity of parts
More intricate parts, including electric and hybrid vehicles, are more attractive to both ends of the supply chain. They are more expensive and usually require specialists to correctly install them i.e. fewer do it yourself mechanics (DIY). Thus, increasing complexity in auto parts makes demand for more automotive aftermarket products
The impact of Covid - 19 pandemic
Covid-19 has created an economic situation that is fundamentally from any previous crisis. Covid -19 has a significant impact on the demand of the industry. Changes in customer buying behaviour due to uncertainty surrounding the pandemic may have serious implications on the near future growth of the industry. Cash crunch has already impacted the automotive aftermarket players and this shortfall is further expected to widen over the next few months.
Decreased retails and workshop business
Many people delay inspections or discretionary repairs, and some government transportation agencies are relaxing deadlines for mandatory technical controls and inspections. Consumers with lower incomes are also delaying avoidable repairs. These changes are dramatically reducing visits to garages, service stations, and repair workshops, even though these businesses are typically allowed to remain open and can still easily receive parts from distributors.
Smooth transition to the electric vehicles industry
Smooth transition to the electronic powertrain is one of the fundamental challenges for the auto after-market sector in the next 5-10 years. The biggest challenge, particularly for small players in the segment, would be to technologically adapt themselves for EVs. Experts believe that those into manufacturing engine parts will face the maximum heat due to a shift in focus from fuel efficiency and engine management to drive motors and batteries.
Inadequate management of large vehicle data bases and catalogs
Automotive aftermarket parts are very huge in number which becomes difficult for manufacturers to show all the data and catalogs properly to the customers. Thus this may result in improper installation parts
Replacement Part Insights
By replacement part, tire dominated the global automotive aftermarket and anticipated to continue its dominance over the forecast period due to small replacement cycle compared to its counterparts. In addition, introduction of intelligent tires and tire monitoring system has also impacted positively on the aftermarket sale of tire to enhance safety features in the vehicle. Rising disposable income in the developing countries along with shift in consumer preference towards attractive and aesthetic look of the vehicle is significantly propelling the market growth. Further, rising adoption of electric and battery-powered vehicles influence the automotive component manufacturers to incorporate advanced safety features for tire pressure monitoring and other control units such as speed control and engine monitoring. The aforementioned factors prominently fuel the aftermarket demand for tires.
Service Channel Insights
In terms of revenue, Original Equipment (delegating to OEMs) analyzed to dominate the automotive aftermarket in the years to come. Brand name and consumer loyalty are the prime factors that uplift the market growth for OE segment. Besides this, Do It Yourself (DIY) experience lucrative growth over the forecast period. This is attributed to the increasing technical knowledge of consumers along with their rising interest to repair, maintain, and upgrade their cars by their own. Some of the aftermarket service providers charge higher than the requirement for instance, aftersales service centers of the automobile manufacturers charge higher compared to other market participants, this insist consumers to self-service their vehicle. Further, easy availability of the automotive parts online also offer an opportunity to the drivers to self-assist their vehicles.
Based on region, the North America led the automotive aftermarket in in terms of revenue in 2020 and analyzed to witness prominent growth over the forecast period. Surge in demand for passenger cars, use of advanced technology while fabrication of auto parts, and digitalization of component delivery services projected to spur the market growth in the region. Strict emission rules in the region have forced component manufacturers to make necessary upgradation in automotive components to meet the government rules and norms. Rising environment degradation from automotive emission has significantly spurred the need for high efficiency and environment-friendly automotive components for global as well as native markets. North America has the largest market share of 35.50% over the period 2016 to 2027. The trend of sales of pre-owned vehicles is rising and creating a huge demand for automotive aftermarket in the forecasting period. Also, the vehicles or components of vehicle demand replacement after certain years of usage which serves as the key factors in expanding the market in U.S. Furthermore, increasing consumer expenditure and the presence of well-established industry is also fueling the growth of the overall regional market to a large extent. However, the demand shrank during coronavirus pandemic, but it is estimated to rebound in the coming years.
On the contrary, Europe is a prominent revenue contributor in the global automotive aftermarket owing to a regional home for several automotive OEM manufacturers. In addition, high purchasing power coupled with green revolution to transform the transportation into environment-friendly is some of the major factors that spur the market growth. The Europe region has accounted market share of 24.15% over the period 2016 to 2027. Germany is one of the most prominent manufacturers of automotive vehicles and has high demand and sales for automobiles which further leads to increase in demand for replacement of several automotive parts thereby expected to drive the market growth in the next few years. Furthermore, innovative business models and online tailored services is expected to boost the market during the forecast period. Combined with the linkages between GDP growth rates, this German sector is anticipated to persist being a home to some of the most technologically enhanced aftermarket companies of the world, which will aid the country to maintain a strong position in the future.
Key Companies & Market Share Insights
The global automotive aftermarket is highly competitive with the presence of several large and small players. Government regulations play major role in the rising competition among players. Changing consumer expectation along with integration of disruptive technologies in the automotive components industry are the other prime factors that trigger the competition level among aftermarket players. In the wake of same, market participants are investing significantly on research & development to implement advancement and innovative technologies in the existing products and the development of new products specific to the consumer need. In addition, the automotive aftermarket is a matured market, yet expected to foresee competition from unexpected players. Some of the new entrants are grabbing prominent consumer attention and upholding their market position. Innovative product offering and technology advancement are the key strategies adopted by these players.
Few of the prominent players in the automotive aftermarket include:
Segments Covered in the Report
This research study comprises complete valuation of the market revenue with the help of widespread quantitative and qualitative insights, and prognoses of the market. This report presents breakdown of market into forthcoming and niche segments. Additionally, this research study gauges market revenue growth and its drift at global, regional, and country from 2016 to 2027. This report includes market division and its revenue assessment by categorizing it depending on replacement part, service channel, distribution channel, certification, and region:
By Replacement Part
By Service Channel
By Distribution Channel
By Regional Outlook
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