Automotive Aftermarket Industry

Market Overview

The global market for Automotive Aftermarket Industry was valued at USD 428.32 billion in 2022 and is expected to reach USD 642.02 billion in 2031 expanding at a compound annual growth rate (CAGR) of 4.8% from 2023 to 2031. Factors like increased manufacturing of auto components and expansion of original equipment manufacturers (OEM) into aftermarket activities drive market growth.

The automotive aftermarket is the secondary market of the automotive industry. It is associated with the manufacturing, remanufacturing, distribution, retailing, and installation of all vehicle parts, chemicals, equipment, and accessories, after the sale of the automobile by the original equipment manufacturer (OEM) to the consumer. The original equipment manufacturer (OEM) could or might not have made the components, accessories, and other items that are for sale.

The phrase "automotive parts aftermarket" refers to the components and pieces of vehicles that are added after the vehicle has been shipped from the manufacturer. This industry includes the selling of aftermarket components such as replacement tyres, equipment, car parts, service repairs, accident repairs, and accessories for vehicles that have already been purchased. Companies that engage in the production, distribution, retailing, installation, and remanufacturing of a variety of automobile components and accessories are included in this category. The digitalization of vehicle repair and component sales has evolved as a result of improvements in technology, which have, in turn, boosted the expansion of the automotive aftermarket business.

Market Dynamics

Automotive Aftermarket Industry Drivers

Increased consumer interest in electric vehicles

There has been an important increase in both the demand for and manufacturing of electric vehicles. This may be attributed to the several benefits that electric vehicles possess over gasoline-powered vehicles. Fuel-powered cars do not need to have their oil and air filters, fan belts, timing belts, head caskets, or spark plugs replaced, making them more cost-effective and efficient. Because of this, electric vehicles are quickly becoming the method of transportation of choice, which is slowing the expansion of the business that produces vehicles fueled by petroleum. In addition, as a consequence of advancements made in vehicle dynamics and traction control, automotive manufacturers are concentrating their efforts on the creation of electric vehicles that are outfitted with the most advanced technologies. Because of this, you will need to make use of equipment and accessories of the highest possible quality. As a consequence of this, it is anticipated that increased manufacturing of electric cars would propel the expansion of the automotive aftermarket.

Expansion of Original Equipment Manufacturers (OEM) into Aftermarket Activities to Drive Market Growth

Original equipment manufacturers have progressively enhanced their degree of participation and emphasis inside the automotive parts aftermarket value chain. For example, they have created their own networks of repair shops that do not specialize in repairing a particular brand of automobile. In order to compete with independent aftermarket players and keep customers within their networks for a longer period of time, major market players have introduced second service formats and second brands (such as VW Direkt Express) or remanufactured parts in an effort to keep up with the market's shift toward older vehicles. OEMs are also investing in customer experience optimization efforts and introducing differentiated aftermarket service offerings. For instance, OEMs are leveraging vehicle connectivity to retain customers and automate decision-making related to service and repair. This is one way that OEMs are differentiating their aftermarket service offerings.

For example, the French automaker PSA has placed a considerable emphasis on the independent Automotive Aftermarket as part of their development strategy for the next five years, which they call Push to Pass. PSA has successfully launched a number of its brands across the whole value chain, in addition to completing a number of acquisitions. PSA owns a share in the distribution network that consists of Aramisauto and Autobutler, as well as Distrigo and Mister Auto. PSA intends to reach all consumers using this strategy, regardless of the car brand they drive, their age, or the distribution channel they use. PSA's lead has been followed by a number of other original equipment manufacturers, both premium and volume players, which will be the primary driver of market growth in the years to come.

Increased Manufacturing of Auto Components to Drive Market Growth in the Automotive Industry

There are a number of reasons that are projected to support the expansion of the market from 2021 to 2028, one of which is the growing consumer awareness about the repair and appropriate maintenance of cars in order to preserve their efficiency and performance. In addition, the growing demand for crossover cars and long-distance trip automobiles contributes further to an increase in the frequency with which vehicle components need to be serviced and replaced. It is projected that increasing client customization would be a primary driver of market expansion during the forecast period due to increasing design and manufacturing flexibility in the automotive industry.

Automotive Aftermarket Industry Restraints

The implementation of various safety systems for motor vehicles

The sensors that are installed in vehicles make it possible to decrease the amount of wear and tear that is experienced by vehicles over time, particularly by the tyres and brakes, which are put through rigorous driving conditions on a regular basis. This component reduces the need for replacement components, which may be detrimental to the expansion of the sector. In addition, the constant research and development for new raw materials to stop the deterioration of car components and accessories is another factor that limits the product's market share. As a direct consequence of this, the widespread implementation of vehicle safety technology is likely to impede the expansion of the automotive aftermarket during the course of the time under consideration.

Automotive Aftermarket Industry Opportunity

Increasing requirements for spare parts

The deterioration of vehicles and the terrible road conditions that accompany them will be beneficial to the aftermarket components since they will see an increase in demand for repairs and upkeep. The market is expanding because of several factors, including the relatively low costs of production as well as an increase in the number of accidents that occur on the roads. As a direct consequence of this, the growing need for replacement parts is producing fruitful chances for the expansion of the automotive aftermarket during the course of the time under consideration.

Regional Analysis

With a share of 28.2 percent in 2021, Asia Pacific led the market in terms of size. From 2022 to 2030, the sector is anticipated to experience substantial expansion. Automobile sales in the area are expected to increase as a result of increased consumer and passenger vehicle production and sales, the use of advanced technologies in the manufacturing of auto components, and the digitization of automotive component delivery services. To improve their market share in the sector, several businesses are concentrating on acquisitions. For instance, Cooper Tire & Rubber Company was bought by Goodyear Tire & Rubber Company in February 2021 in order to consolidate the brand portfolio and offer thorough services across the industry's value range.

In order to lower the cost of these essential automotive components and ultimately the cost of the finished product, universities and other R&D institutions are working harder than ever to improve their cost and operational efficiency. The prototype is expected to perform better than the current cars. These regulations have put pressure on component producers to provide eco-friendly, highly effective vehicle components for domestic and international markets. China, India, and Brazil are three growing economies that have recently confirmed persistent trends that are anticipated to offer booming opportunities for segment expansion in the Asia Pacific area.

Segmental Analysis

The automotive aftermarket is segmented into the following categories: Replacement Part, Distribution Channel, Service Channel, Certification and Region.

Based on Replacement part the market is divided into the following: Tire, Battery, Brake Parts, Filters, Body parts, Lighting & Electronic Components, Wheels, Exhaust components, Turbochargers and Others. With a share of 48.7% in 2021, the others sector led the market in terms of size. The market is to be dominated by the tyre category, which would be the largest in terms of replacement components. Due to the low replacement cycle of tyres compared to their equivalents in the other component markets, it is anticipated that this category will continue to dominate the market. Various accessories, lubricants, tyre, and other component replacement providers are included in the aftermarket replacement part suppliers. The industry value chain also includes service enablers like suppliers of entertainment and maintenance services.

The demand for hybrid e-vehicles is rising, which will eventually reduce the need for exhaust components and specialist equipment for these specialised vehicles. The increase in the cost of gasoline and vehicles with gasoline engines is to blame for this restriction. The growth rate of the market is anticipated to benefit from an increase in the disposable income of consumers in developing countries like China and Brazil. Sales of vehicle components are expected to increase as a result of the rising demand for locomotives. Market economies are expected to be driven by strict regulatory standards for vehicle safety across the world. Major participants in the industry are heavily utilising current manufacturing technologies, such as 3D printing of automobile components, to reduce production costs. 3D printing allows for efficient fabrication performance and

With a share of 56.6% in 2021, the retail sector led the market in terms of size. By 2030, it is predicted that the retail sector would control the market in terms of size. From 2022 to 2030, the wholesale and distribution industry would have comparatively rapid revenue growth. Because automotive components must be updated on schedule to maintain the overall function of the vehicle, automotive aftermarket economies are crucial components of the entire automotive production and maintenance scheme.

The market is changing in favour of digitalization due to the growing effect of technological innovation. The marketplace is evolving as the aftermarket transitions to the internet. Online stores sell accessories and services. Original Equipment Manufacturers (OEMs), Original Equipment Suppliers (OESs), distributors, insurers, and workshops are just a few of the value chain participants responding to the expanding online aftermarket trend. A few aspects that are anticipated to drive market expansion throughout the forecast period include the use of advanced technology in the manufacture of auto components, the spike in production of consumer and passenger vehicles, and the digitization of automotive repair and maintenance services.

Based on service channel the market is divided into: DIY (Do it Yourself), DIFM (Do it for Me), OE (Delegating to OEM’s). With a share of 72.0 percent in 2021, the original equipment category led the market in terms of size. By 2030, it is expected that the OE segment would be the largest in the aftermarket. From 2022 to 2030, the DIY market will have a comparatively rapid revenue expansion. DIY clients are technically savvy and interested in performing their own auto maintenance, repairs, and upgrades. Customers of DIFM purchase components online, but a qualified workshop instals them.

The aftermarket service channel is made up of participants like raw material suppliers, tier 1 distributors, manufacturing units for car exhaust hubs, and aftermarket units made up of jobbers and, eventually, repair shops. The key players in the service channel are repair centres. In order to acquire a competitive edge and take control of a sizeable portion of the market, the industry is observing a trend of strategic partnerships and cooperation between collision repair facilities and top car insurance companies. For example, Utica Mutual Insurance Company, State Farm Mutual Automobile Insurance Company, and Progressive Casualty Insurance Company have agreements with licenced vehicle repair businesses in every state in the United States.

Based on certification the market is divided into the following: Genuine Parts, Certified Parts and Uncertified Parts. With a share of 52.0% in 2021, the genuine parts category led the market in terms of size. By 2030, it is projected that the genuine category would be the largest in the aftermarket. From 2022 to 2030, the uncertified segment's revenue would expand at a comparatively rapid rate. False components are prohibited, not certified or tested, and come with no guarantee. OEMs, often referred to as subcontractors, such as automakers, produce genuine parts. Genuine replacement parts are more reliable, diversified, simple to find, and come with a warranty. The drawback of these components is their high cost and requirement for dealer purchase.

Organizations with certification do testing and inspection on approved automobile parts. Incorporated in 1987, the Certified Automotive Parts Association (CAPA) is a nonprofit group. To confirm and ensure the quality and compatibility of automobile replacement components, CAPA offers test programmes. It was created by motor insurance companies to guarantee the calibre of replacement components used by accident repair facilities. Compared to expensive authentic components, certified parts are more affordable. However, uncertified components can be used in place of genuine vehicle components. The automaker does not approve of uncertified components. But in the next years, the market will have considerable development prospects due to the cheap cost of uncertified parts.

Recent Developments

• April 2021, Kaspar Ranch Hand Equipment, LLC was acquired by Lippert Components Inc. Lippert Components Inc. sought to increase its market share in the aftermarket for automobile components with this purchase.
• February 2020, The "Your Car. Your Data. Your Choice." The campaign was supported by MotoRad LTD. in collaboration with the Automotive Aftermarket Suppliers Association (AASA) and the Auto Care Association. This campaign was started to educate car owners about the data that contains important maintenance and repair information for their vehicles.