Automotive aftermarket has become highly sought-after, thanks to rising demand from motorists to enhance the performance of their vehicles in terms of speed, appearance, and exhaust sound. However, the emergence of the built-up standards and environmental impacts such as carbon emission, correlated with the functioning of automotive components has bestowed a challenge upon the aftermarket.
The industry is undergoing rapid changes driven by the factors such as focus on achieving competitiveness in emerging economies, increasing adoption of novel technologies, and changing customer expectations. Also, the outbreak of COVID-19 has exposed the vulnerability of the automotive aftermarket industry.
These challenges have compelled various automotive aftermarket providers to adopt new strategies to cope up with these disruptions and strengthen their footprint in this fast-changing environment. Even amid the chain of unprecedented events, the automotive aftermarket continues to gain traction.
Digitization Emerging as a Key Trend to Woo Consumers
Advent of various technological advancements is shifting the market towards digitization. To cope up with the changing customer expectations, the aftermarket is evolving and going online. Digitization of distribution channels and services is playing a significant role by providing information about location, availability of services, and workshop quality, allowing the consumers to do a thorough research before spending on repairing their vehicle.
Several companies are taking a step towards digitization, resulting in an emerging trend in the automotive aftermarket industry. For instance, a Germany-based automotive part supplier company, Hella KGaA Hueck & Co.has started a ‘Mobility Solutions’ unit to encourage digital business models in the industry.
Increasing Demand for Used Cars Creating Attractive Prospects
The growing demand for used cars is creating lucrative growth opportunities for the aftermarket players, owing to the need for higher maintenance and repairs of the used car. As per the Bureau of Transportation Statistics of the U.S., the sales of used vehicles have raised from 37,255,000 in the year 2015 to 40,805,000 vehicles in the year 2019.
Increasing demand for car maintenance has made the repair centers important stakeholders in the service domain. A new trend of collaboration and strategic alliances has emerged between auto insurance companies and leading repair centers as they aim for catering to the growing demand for aftermarket services.
For instance, State Farm Mutual Automobile Insurance Company, Progressive Casualty Insurance Company, and Utica Mutual Insurance Company have made tie-ups with certified automotive repair centers across various states in the U.S.
Increasing Environment Consciousness
Owing to the large amount of carbon that vehicles emit, the automobile industry has a reputation for being one of the largest polluters. Increasing awareness about environment has led to the introduction of electric cars.
For instance, leading automobile companies such as Tesla, Chevrolet, Nissan, and others have launched various electric cars to lower carbon emissions. The emergence of this trend has resulted in shifting automotive aftermarket requirements, compelling the aftermarket manufacturers to quickly meet the growing needs of the industry.
The coronavirus outbreak has drastically impacted the automotive aftermarket industry by disrupting the supply chains and dampening consumer demand. However, with the introduction of the latest innovations in the aftermarket, the industry is expected to recover. For instance, SOFIMA Filters launched a Defend anti-virus cabin filter amid the COVID-19 virus in August 2020.
Unprecedented events occurring in the last few years have taught the industry to navigate through challenges. As these challenges have consequently affected the growth of industry, it is high time for the key players to take significant steps to shape the future automotive aftermarket industry landscape and expand into unexplored profit pools.