Automotive Aftermarket size will likely exceed USD 1,100 billion by 2026; according to a new research report by Global Market Insights, Inc.
Increasing vehicle ownership and advent of e-commerce to drive demand
The automotive aftermarket is a part of the automotive sector and comprises the service business and parts business facilitating vehicle maintenance. Aftermarket vehicle accessories are also a part of aftermarket. With increasing vehicle ownership, the necessity for scheduled servicing and maintenance also arises to enhance aging vehicles lifetime and functionality, ultimately driving the industry growth. The evolving consumer expectations coupled with ongoing technological innovation and surging competition across the automotive sector are also considered major contributory factors fueling the market expansion. The ever increasing penetration of major OEMs into the aftermarket through consolidation of parts distributors will spur the market outlook.
However, in the wake of the ongoing COVID-19 pandemic, the negative impact on the industry compounded as the global automotive sector was already going through weak demand since 2019 owing to a slew of geopolitical uncertainties such as U.S.-China trade war, uncertainty over Brexit, economic slowdown in China & India, and various other factors. The imposition of stringent nationwide lockdown followed by complete disruption of raw material supply chain is also expected to contribute to market downturn.
Supportive government initiatives and reforms to curb CO2 emissions have manifested the demand for a new range of automotive accessories catering to emerging new energy vehicles. With rapid rise in the electric vehicle segment, the aftermarket has quickly responded to fulfil arising consumer needs with the new powertrain platform. For instance, in November 2020, Splivolt announced the launch of its family of EV charging products. The product line comprises affordable splitter switches and high-performance portable EV chargers.
The accessories segment will account for a sizeable share in the automotive aftermarket through 2026 with the increasing presence of manufacturers offering innovative solutions and fulfilling emerging market needs. The segment contributed more than 14% of the total aftermarket product share. With the advent of rapid prototyping and innovative manufacturing techniques, new products are introduced quickly and reliably at low costs, driving market toward growth trajectory.
The DIY segment is projected to witness around 6.5% CAGR from 2020 to 2026 owing to the increasing trend and rising service and labor prices especially in Asia Pacific. The discount department in DIY sales outlet held significant share and is attributed to low prices offered by the stores. The consolidation of small-scale retailers and expansion from large-scale players is set to dynamically close the gap between discount department and auto part stores in terms of share.
North America to bank upon the increasing service industry
North America automotive aftermarket captured above 30% share in 2019 driven by proliferating automotive service industry. The U.S. has high per capita vehicle ownership along with high average vehicle age. The ageing vehicle fleet in the region is poised to propel the aftermarket service sector as vehicles utilize more replacement parts and other components. The ageing fleet driving aftermarket demand, the rapid surge in sales of electric vehicles has provided the accessory aftermarket with an opportunistic scenario.
Key automotive aftermarket players include BASF, Cooper Tire & Rubber Company, ZF Friedrichshafen AG, Denso Corporation, Magnetic Marelli, Lear Corporation, Magna International, Robert Bosch, and among others. Delphi Technologies in September 2018 launched a diagnostics tool for fast and accurate diagnostics of automobiles. Additionally, the company also introduced a complete-service solution for a quicker steering service to increase service efficiency. Industry players are adopting tools to enhance the repair efficiency and service offerings.