Automotive aftermarket to expand $1,420bn by 2024

As per a recent industry report put forward by Global Market insights, Automotive Aftermarket is forecast to register its name in the billion-dollar fraternity down the line of six years, by exceeding a revenue of $1,420bn by 2024 with a projected CAGR of five percent over 2018 to 2024.

Increasing necessity for maintenance and scheduled servicing requirements for enhancing aging vehicles life will drive the automotive aftermarket industry. Growing customer expectations, ongoing technological innovation, and rising competition across automotive industry are the major factors fueling industry expansion. Increasing penetration of OEMs into aftermarket activities along with the consolidation of parts distributors will also provide a positive outlook for business development.

North America automotive aftermarket industry accounted for over 30% revenue share in 2017. This can be credited to the increasing new vehicles production coupled with enhanced performance of old vehicles. Ongoing technological innovation in the automotive sector will create new opportunities for aftermarket companies to grow globally.

Increasing customization of vehicles, digitization, demand for Bluetooth devices, and other accessories driving automotive aftermarket industry in the US and Canada. Improved fuel economy likely to increase the average miles driven by a customer. This has led to more wear and tear in vehicle parts, thus augmenting the demand for automotive aftermarket industry products.

Strong demand for automobiles from emerging economies is likely to favor automotive aftermarket industry growth. According to OICA, global LCVs and passenger cars registered sale over 86 million units in 2017, an increase by 2.4% than in 2016.

The increase in demand was supported by the rapid expansion of global players in Asian countries majorly in China, India, Australia, and Indonesia. Moreover, rising eco-friendly techniques in automotive manufacturing owing to stringent environmental regulations resulting in a surge in alternative automotive parts demand.

Shifting consumer preferences towards upgrading existing cars with newer technologies is also expected to propel automotive aftermarket industry size. Improved demand for electrification and software installation will create new avenues for suppliers and workshops. Increasing popularity of connectivity/telematics, ADAS, info- and entertainment systems among young will further support the market growth.

Increasing competition among automotive industry is driving the exponential development of online sales platform for automotive components. Manufacturers are expected to offer convenient shipping options, flexibility, and a seamless online experience to boost their product sales. Consumers are anticipated to compare products and prices before buying decision. Increased convenience coupled with no-cost ship-to-store pricing are the major factors supporting automotive aftermarket industry product sales.

Replacement parts was valued at around $844bn in 2017. Increasing maintenance requirements owing to excessive strain with vehicles’ aging and poor road conditions provides a positive outlook for aftermarket parts. Factors such as low production cost, rising number of manufacturers and increase in number of accidents will drive the segment growth.

Professionals are estimated to hold a major share of automotive aftermarket industry; representing over 65% of the total demand. The rest of the demand is generated from OEMs and DIY. Professional includes quick lubes, garages and services, dealers, government services, commercial fleets, and other professional outlets.

Consumer preference for economical services, closer to home advantage and personalized services likely to augment garages, service stations and automobile dealerships growth rate. Service quality, high quality parts and technical skills are the major factors propelling professional segment market size.

The major automotive aftermarket industry players include Yazaki, Lear, ALCO Filters, Magna International, 3M Company, Continental, and Denso. Other notable players include Copper Tire and Rubber Company, Akebone Brake Corporation, and Magneti Marelli.

Industry participants are undergoing strategic collaborations to expand their regional presence. For instance, In December 2016, Faurecia announced its third joint-venture with its Iranian partners to strengthen its presence across the country.