Automotive Aftermarket Industry Information By Offering (Parts, Services), By Channel (Authorized Repair, Independent Repair), By Vehicle Age (0-4 years, 4-8 years, Above 8 years) and By Vehicle Type (Passenger Vehicle, Commercial Vehicle) - Global Forecast till 2027

The global automotive aftermarket is anticipated to witness a CAGR of 4% during the forecast period of 2017 to 2027. This projects consistent growth for the market. Valued at USD~1,200 Billion in 2017 and is expected to grow to reach an approximate value of USD USD~500 Billion by the end of 2027.

Consumers are showing a greater preference for products with transparency, leading to increased market transparency and reduced service costs in the automotive aftermarket. The cost of repairs and replacement parts has declined worldwide while offering consumers the liberty to choose the offer most convenient to their requirements and criteria. This has led to increased customer satisfaction which in turn leads to customer retention in the long run, thus prompting market growth. Additionally, vehicles have longer lifespans which require increased aftermarket activities; this has put pressure on OEMs to expand the same to retain customers. For instance, although more than half of the passenger vehicles in North America younger than two years are serviced within the OEM network, only 15% of the vehicles that are older than eight years are serviced within the OEM network. OEMs have had limited aftermarket activities which have significantly picked up the pace to strengthen their position in the market and in order to leverage current market trends such as introducing second service formats and remanufactured parts.

The high fragmentation of the market means there are a wide number of independent and authorized repair shops in the automobile aftermarket which are implementing various strategies in an effort to secure higher market shares. Attractive offers such as extended warranties, and service contracts for new vehicles, as well as wear & tear repair and servicing solutions over a vehicles lifetime, are offered to consumers, thus increasing demand for similar aftermarket activities. Moreover, independent repair shops, which have a strong hold on the old vehicle segment, are working to expand their market share in new vehicles by offering affordable pricing, high quality & speed of service, and standardized service contracts for fleet operators, business customers and partnerships with diagnostic specialists. The increasing popularity of vehicle electrification has further expanded the market by prompting repair shops to offer remote diagnostic and telematics services.

Meanwhile, the digital revolution has made its mark on the automotive industry with new technologies such as telematics and fleet management systems. These intermediary business models are fast emerging and offer solutions which target both B2C and B2B consumers. These intermediaries are placing focus on expanding their value chain footprint and with direct access to consumers is expected to open up new opportunities for the market. Moreover, the rise in car sharing users and professional fleets are increasing opportunities for the aftermarket ad there is an anticipated increase in maintenance and repair services. Partnerships between workshops and intermediary businesses and the automation of workflow and parts logistics are expected to provide the market with expansion opportunities that carry the potential for exponential growth in the coming years.

The global automotive aftermarket is segmented on the basis of offering, channel type, vehicle age, vehicle type, and region. By offering, the market is segmented into parts and services. The parts segment share accounts for over 50% of the total market and is expected to display the highest CAGR during the forecast period. Parts include tires, brake parts, battery, body & other component parts which have high sales and high demand in the aftermarket due to the upkeep required to ensure these components are functioning at optimally.

By channel type, the market is segmented into authorized repair and independent repair. The independent repair segment accounts for the largest share of the total market and accounts for close to 60% of the total market. Independent repair shops are expected to witness the fastest growth with the highest CAGR during the forecast period due to the expansion activities are undertaken by the players in this segment. Moreover, they are entering partnerships with fleet operators, insurers, and leasing firms in an effort to gain large maintenance contracts across all vehicle segments, thus leading to significant growth for the independent repair segment.

By vehicle age, the market is segmented into 0-4 years, 4-8 years, and above 8 years. The above 8 years segment is the predominant segment with regards to vehicle age and is expected to experience the fastest growth over the course of the review period. Consumers who own vehicles belonging to this age group are more reliant on the aftermarket to keep up optimal maintenance of the vehicle. Moreover, these consumers prefer cost-efficient alternatives and often prefer to visit independent vehicle repair shops for affordable quotes. The above 8 years segment was valued at USD 462.6 billion in 2017 and is expected to reach an approximate evaluation of USD 610.4 billion by the end of 2023.

By vehicle type, the market is segmented into passenger vehicle and commercial vehicle. The passenger vehicle segment accounts for the most significant share of the market and is anticipated to witness the most rapid growth during the assessment period. The availability of disposable income has grown worldwide resulting in the increased demand for passenger vehicles. The global expansion of automotive manufacturers has also significantly improved the growth of the automotive aftermarket.

Regional Analysis

North America accounts for the most significant region and is closely followed by Europe and the Asia Pacific. With over a third of the global share, North America is a major contributor to the market with high sales of premium and luxury vehicles which require careful maintenance and upkeep. Moreover, the region possesses a large number of prominent manufacturers, existing aftermarket infrastructure and an affinity toward the adoption of advanced technologies which is driving demand and consequently the growth of the automotive aftermarket.

Competitive Tracking

Market Research Future's report includes the analysis of prominent key players which include Valeo, Aisin Seiki Co. Ltd., Continental AG, 3M, and Denso Corporation. Other players include Sumitomo Electric industries, Cooper Tire & Rubber company, Aptiv PLC, ACDelco and MAHLE GmbH to name a few.

Global Automotive Aftermarket: Competitive Landscape

Aisin Seiki Co., Ltd., Valeo, Continental AG, 3M, and Denso Corporation are the major five players operating in the global automotive aftermarket in 2017. High-quality and competing on a on a low-cost strategy are the two driving factors of the market. These companies continue to retain their strong global presence through expansion, merger & acquisition, partnership & collaboration, and extensive product portfolio.

Aisin Seiki Co. Ltd. is a leading company in this market. They offer a wide range of products that increases the value and performance of the company. The company offers transmissions, clutches, disc brakes, ABS, suspensions, oil pumps, power windows, and power door locks. Aisin Seiki Co., Ltd. is headquartered in Japan. The firm had an employee strength of approximately 100000 individuals as of 2016. Aisin's main automotive business offers automotive-related products such as transmissions, brakes, and engine and car navigation systems. The company has around 180 consolidated subsidiaries and companies, worldwide. The company has adopted diversification as a strategy to cater to a wide range of customers. In 2014 it established new subsidiaries in Indonesia and began constructing a new facility in Brazil. The company focuses to combine and link its individual businesses, strengthening and maximizing the potential of the products and technologies that are cultivated by each company.

Valeo is engaged in designing, manufacture, and marketing of comfort & driving assistance systems, powertrain systems, thermal systems and visibility systems and automotive products. The company is an automotive supplier and partner to various automakers with more than 155 production sites in 32 countries such as China, India, Japan, Russia, U.S., Brazil, France, Spain, and other countries of Europe, and Africa. Peiker Acustic GmbH & Co. KG, Valeo Thermal Systems Japan Corporation, and Valeo Pyeong Hwa Co., Ltd are some of the subsidiaries of the company. The company has used its expertise in innovative products, systems, and solutions that reduce automobile CO₂ emissions, improve vehicle performance, and develop intuitive driving. The company has adopted expansion as their strategy to cater to a wide range of customers. The key focus remains on applying these technologies and technical know-how to the automotive segment, which exhibits growth potential, in an effort to expand its business.

Continental AG is engaged in the manufacture and supply of the tires, brake systems, interior electronics, automotive safety, powertrain and chassis components, and other parts for the automotive and transportation industries. The company operates in 427 locations across 56 countries such as China, India, France, Germany, Canada and U.S. ContiTech, Vergolst, and Continental Emitec GmbH are some of the subsidiaries of the company. The company offers safe, efficient, intelligent and affordable solutions for vehicles, machines, traffic, and transport. Continental AG is headquartered in Germany. The firm had an employee strength of approximately 235,000 individuals as of 2016. The company intends to continue to increase its market share in the current business lines and related business lines through product development and internal growth.

3M operates in electronics, telecommunications, industrial, consumer and office, healthcare, safety, and other markets. The company operates under five business segments, namely, Industrial; Safety and Graphics; Electronics and Energy; and Health Care. 3M has more than 80 manufacturing plants in about 30 US states and operates +120 manufacturing and converting facilities in about 35 other countries across Asia-Pacific; Europe, Middle East, and Africa (EMEA); Latin America; and elsewhere in North America. 3M is geographically located in US. The firm had an employee strength of approximately 91,500 individuals as of 2016.  The company has adopted acquisitions as their strategy to cater to a wide range of customers. To focus on its core high-growth operations and reduction of its exposure to the consumer and electronics markets over the last several years, 3M has sold off 14 businesses while making a number of expensive acquisitions.

Denso Corporation is engaged in the manufacture and supply of advanced automotive technologies, systems, and components for major automobile manufacturers. Denso Corporation has 191 sites all over the world, as of 2016. The company operates through major business segments such as powertrain control, thermal, information & safety, electronics, small motors and new business. Denso Corporation is headquartered in Japan. The firm has an employee strength of approximately 151,000 individuals as of 2016. Denso Corporation has presence in countries such as China, Japan, U.S., Canada, U.K., Germany, Italy, and South Africa. The company has adopted new product development as their strategy to cater to a wide range of customers. The company is working to reduce heat loss caused by air ventilation and to minimize air-conditioning capacity by directing, both the heating and cooling functions solely to passengers, and by promoting increased power-saving capabilities. In 2018, the company announced two new thermal product groups for DENSO EUROPE — resistors and HVAC actuators.

The growth of the market vendors is dependent on market conditions, government support, and industry development. Players focus on strengthening their presence worldwide through partnership & collaboration followed by mergers & acquisitions during the forecast period. These strategies are widely adopted to increase their presence and the customer base. The competitive environment in the market is likely to intensify further due to new product development and business expansion.