Global Automotive Aftermarket Forecasted to grow at 4.7% globally in 2016

1. EUROPE
CHINA
LATIN AMERICA
INDIA
94.58
34.93
29.26
8.14
96.59
39.51
30.90
8.95
MARKET
REVENUE
$ Billion
2016 Outlook of the Global
Automotive Aftermarket
Global Aftermarket Revenues Forecasted to Grow at 4.7% Globally in 2016
While private labels will intensify price competition,
Business to Business (B2B) eCommerce channels,
along with next-gen service delivery business
models, will keep the market active in 2016.
2016-2017 AFTERMARKET INDUSTRY SENIOR
MANAGEMENT TOP–OF–MIND ISSUES2015 KEY HIGHTS
GROWING INFLUENCE OF
TECHNOLOGYIN THE BAY
0
1
2
3
4
5
SERVICE
AGGREGATION,
MOBILE SERVICE
NEXT-GEN
BUSINESS MODELS
STRENGTHENING
OF ECOMMERCE
CHANNEL IN
B2B SALES
GROWING B2C
ECOMMERCE
PENETRATION
IN EMERGING
MARKETS (CHINA,
INDIA, BRAZIL)
ECONOMIC VULNERABILITY
IN CHINAAND BRAZIL
IN-VEHICLE
SALES
(TELEMATICS
BASED
BUSINESS
SOLUTIONS)
COMPETITION
FROM PRIVATE
LABELS
DIAGNOSTIC TOOLS &
SOFTWARE SOLUTIONS
DELIVERY EVOLUTION
Increased Original Equipment Service (OES)
participation along with consolidation of traditional
distribution channels in developing markets were
the key highlights of 2015.
Market
Demand to
Grow at the Back
of Increasing
Global VIO
Negative
Economic
Outlook for a
Few Key
Regions
eCommerce
Channel
Strengthening
to Continue
Collision Parts
Category to
Exhibit Strong
Growth
Attractive
Opportunity in
Africa for After-
market Parts &
Services
Service
Opportunity
from Hybrid
and Electric
Vehicles
Top 6
Predictions
of 2016
Manufacturer-level revenue is likely to
reach $384.53 billion in 2016, with 26.2%
share for North America in the global
aftermarket. Total vehicles in
operation will rise from
1.11 billion in 2015 to
1.14 billion in 2016.
Hybrid and electric vehicles make up more
than 1% of total vehicles in operation
worldwide, causing independent parts
and service suppliers worldwide
to invest more in the tools and
training to repair and
maintain these vehicles.
Online retailers will
account or 7% of all
manufacturer-level parts sales,
as a growing number of
suppliers open up online stores on
Amazon.com (US), Tmall.com (China),
and MercadoLibre.com (Latin America).
Collision parts will account
for close to 10% of global
manufacturer-level revenue as
advanced powertrain systems,
sophisticated electronics and new
materials technologies make vehicles
more expensive to repair.
However, industry
growth rates for BRIC
countries will decline
as economic crises
threaten driving and
spending behaviour in
emerging regions.
Africa will emerge as a
major market
opportunity in 2016,
with more suppliers
and service providers
from the developed
world pursuing
opportunities in Nigeria,
South Africa, and Egypt.
Scale: 0 means limited focus, 5 stands for top focus
LOWER THAN
EXPECTED
GROWTH IN
CHINA & LATIN
AMERICA
VEHICLE
OWNERSHIP
TRENDS DROVE
GROWTH IN
AFTERMARKET
DEMAND
TRADITIONAL
AFTERMARKET
PARTICIPANTS
EXPLORE
GEOGRAPHIC
EXPANSION
OPTIONS
STRENGTHENING
OF THE OES
CHANNEL
CROSS THE
GLOBE
INCREASING
STRAIN ON
INDEPENDENT
AFTERMARKET
PARTICIPANTS
There will be a high magnitude of enhancement of the technology focused at
improving vehicle service delivery for IAM service providers. There will be
newer software subscription based models from diagnostic data providers in
the market.
TECHNOLOGY IN THE BAY
With heightened global focus on pollution control and emission norms, the
exhaust control components replacement market is expected to grow swiftly
across most regions.
EMISSION CONTROL COMPONENT AFTERMARKET
In emerging markets such as China and Brazil there has been greater eCommerce
participation in the aftermarket. Forecasted dips in these economies will further fuel
the growth of this channel in 2016, as customers focus on less expensive parts for
maintenance.
PARTS ECOMMERCE GROWTH IN EMERGING MARKETS
Service aggregators have emerged as a popular choice for customers to research
and fix service appointments. This trend is expected to grow stronger and newer
participants are likely to enter the aftermarket across various regions globally.
SERVICE AGGREGATION, MOBILE SERVICE NEXT-GEN
BUSINESS MODELS
While eRetailers have been primarily targeting DIYers, aftermarket
participants are slowly realizing the opportunity in the B2B channel and in
2016 the channel is expected to see significant activity on the online platform.
The trend will find maximum traction in the Americas and Western Europe.
eRETAIL IN B2B SALES
The challenge from private label brands is expected to aggravate national
Wholesale Distributors (WDs), and retailers will expand their offerings across
more number of product categories. Private label brands are expected to
account for almost 33% of total sales in North America in 2016.
PRIVATE LABELING
6
Global Aftermarket Overview
Aftermarket Dashboard
KEY AFTERMARKET TRENDS IN 2016
NORTH AMERICA 98.02 100.65
2015 2016 (Estimated)
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