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Build · Compete · Grow
1
2016
INDONESIA & THAILAND’S
GROWING AUTOMOTIVE
AFTERMARKET
LANDSCAPE
Presented by:
Chukiat Wongtaveerat
Build · Compete · Grow2 consulting.bc@ipsos.com
OUR VISION OUR PROPOSITION
To Provide Practical Advice for Business Fact-based Strategic Consulting
OUR EXPERTISE
Business-to-business specialists with proven solutions to address the most common problems:
• Business Unit Strategy • Competitive Insights
• Go-to-Market • Innovation Scouting
• Partner Evaluation • Sales & Marketing
Overview
Build · Compete · Grow3 consulting.bc@ipsos.com
Our Service Range in Automotive Related Industries
Automotive
Related
Auto OEM
Vehicle Parts
Other Vehicle
Related
Clients
Various types of vehicles:
• Commercial vehicles
• Passenger vehicles
Various types of parts & components
for vehicles:
• Engine and engine parts
• Filters
• Tires
• Other parts
Other auto-related products:
• Automotive lubricant
• Automotive painting
• Other products
Construction
Vehicle OEM
Product coverage
Various types of construction vehicles:
• Excavator
• Bulldozer
• Forklift
• Dump truck
• Other construction vehicles
4 Build · Compete · Grow
About Speaker
Chukiat Wongtaveerat
Senior Consulting Manager
chukiat.wongtaveerat@ipsos.com
+66 2 697 0111
Chukiat is a Senior Consulting Manager with Ipsos Business
Consulting which he joined after having worked in
Singapore, Indonesia and Malaysia.
He has been extensively involved in major market
expansion initiatives for many global automotive clients
including OEM, tier 1, tier 2 suppliers as well as raw
material suppliers. His key expertise are Go-to-market
strategy, value chain analysis, competitive insight and
partner evaluation solutions.
Chukiat is also responsible for developing consulting
practice and industry research across automotive sector in
ASEAN. He has now appeared in several media such as
Reuters, Wall Street Journal, Bangkok Post, The Straits
Times and many local ASEAN presses as an acknowledged
expert on the ASEAN automotive industry.
Build · Compete · Grow
1. Automotive Aftermarket Industry Landscape
2. Thailand Aftermarket Distribution Channel Structure
3. Indonesia Aftermarket Distribution Channel Structure
4. End Channel Service Offering
5. End User Purchasing Behaviour
6. Recommendations & Implications
Build · Compete · Grow6 consulting.bc@ipsos.com
ASEAN's rapidly developing economy is driven largely by Indonesia and Thailand,
which take the major share of automotive sales and production in the region
INDONESIA & THAILAND VS THE REST OF ASEAN
2010-2030 ASEAN GDP 2015 ASEAN Motor Vehicle Sales
* Other South-East Asia nations include: Brunei, Malaysia, Philippines, Singapore, Vietnam, Cambodia, Lao PDR and Myanmar
38% 39%
17% 15%
45% 46%
2010 2030
Indonesia
Thailand
Others*
33%
26%
41%
Thailand
Others*
Indonesia
28%
49%
23%
2015 ASEAN Motor Vehicle Production
Thailand
Others*
Indonesia
Unit in billion USD
1,871 5,476
Source: Asian Development Bank; ASEAN Automotive Federation
Build · Compete · Grow7 consulting.bc@ipsos.com
Indonesia lags behind Thailand’s PV population ratio but its annual sales
trajectory highlights a positive trend driven by its favorable demographic trends
INDONESIA AND THAILAND AUTOMOTIVE LANDSCAPE
6.7
10.2 14.710.1
13.9
18.2
2011 2012 2013 2014 2015 2020
0.8
1.0
1.2
0.8
0.8
1.0
2011 2012 2013 2014 2015 2020
PV population Thailand vs. Indonesia* PV annual sales Thailand vs. Indonesia*
Indonesia Thailand
PV population per 100 people, 2015*
Indonesia
Thailand
4.0
20.8
Unit in millions Unit in millions
* PV population and sales include light-duty/pick-up trucks for Indonesia and LCV for Thailand
Build · Compete · Grow8 consulting.bc@ipsos.com
Indonesia’s PV landscape remains relatively underdeveloped even in its 1st tier
cities, compared to Thailand’s corresponding ownership data
PV OWNERSHIP RATIO (PER 1,000)
West
234
Central
180
Medan
91
Jakarta
142
Bandung
81
Surabaya
69
Indonesia PV Ownership Ratio (per 1,000) Thailand PV Ownership Ratio (per 1,000)
Northeast
107
East
238
North
171
South
163
Bangkok
587
Build · Compete · Grow9 consulting.bc@ipsos.com
Despite Indonesia’s lower PV ownership ratio, its PV out-of-warranty population
is expected to have stronger growth than Thailand in the next 5 years
VEHICLE POPULATION BY CAR AGE
PV Population by Car Age in Indonesia and Thailand* CAGR 2015-2020
* PV population and sales include light-duty/pick-up trucks for Indonesia and LCV for Thailand
ID 2015 TH 2015 ID 2020 TH 2020
Car Age older than 8 Car Age 3 - 8 Car Age 0 - 3
23%
10.2
32%
38%
43%
13.9
31%
48%
21%
18.2
32%
52%
16% 0 – 3 years
3 – 8 years
>8 years
2.3%
8.9%
10.4%
-0.3%
6.3%
7.0%
Indonesia Thailand
7.7% 5.3%Overall growth
30%
14.7
34%
77%
84%
Build · Compete · Grow10 consulting.bc@ipsos.com
Differences in out of warranty models between the two countries will impact part
types, purchasing channels and pricing strategies for parts players
OUT OF WARRANTY PASSENGER VEHICLE POPULATION
* PV population and sales include light-duty/pick-up trucks for Indonesia and LCV for Thailand
Thailand’s 2015 Out-of-Warranty PV Population by Brand
35%
21%
11%
10%
8%
4%
3%
9%
Others*
11.06
million Units
*Others includes Chevrolet, Mercedes, BMW, etc.
Indonesia’s 2015 Out-of-Warranty PV Population by Brand
47%
17%
9%
8%
7%
3%
9%
Others*
7.14
million Units
*Others includes Kia, Chevrolet, Mercedes, BMW, VW etc.
Build · Compete · Grow
1. Automotive Aftermarket Industry Landscape
2. Thailand Aftermarket Distribution Channel Structure
3. Indonesia Aftermarket Distribution Channel Structure
4. End Channel Service Offering
5. End User Purchasing Behaviour
6. Recommendations & Implications
Build · Compete · Grow12 consulting.bc@ipsos.com
Thailand’s more established networks enable distributors to directly engage with
end channels without having to leverage parts retail shops for wider coverage
THAILAND CHANNEL STRUCTURE MAPPINGTHAILAND CHANNEL STRUCTURE MAPPING
Parts Manufacturers
OEM
(parts center / parts
department)
End-users
4S/3S
Parts Manufacturers/imports
End-users
Certified
Independent
Workshops
Branded
Service
Provider
Parts Retail Shop
General Parts Distributor
Uncertified
Independent
Workshops
Primary Channel
Secondary Channel
OES Channel Independent Aftermarket Channel Structure
• Most retail shops use online channels only to promote their outlets, as online sales are estimated to account for less
than 5% of their total sales
• With their established networks, general parts distributors are important partners for companies looking to enter
the independent aftermarket
Build · Compete · Grow13 consulting.bc@ipsos.com
~60 authorised parts distributors are active in the market, while the number of
general distributors and parts retail shops is estimated to be much higher
Key Stakeholders
General Parts
Distributor
Description Examples
• There are two types of general parts distributors:
1. Authorised parts distributors for OEMs, which carry
parts of specific brands. There are approximately 60
authorised distributors in the market.
2. General distributors, which carry several brands of
OEM and REM parts. They generally focus on specific
product lines, for example body work, car
accessories, auto seats.
• In addition, most general parts distributors cooperate
with car insurance companies to distribute products to
the certified independent workshops.
Parts Retail
Shops
• Parts retail shops are located nationwide. They mostly
receive products from general parts distributors. It is
estimated that there are around 500-600 parts retail
shops in Greater Bangkok.
• Parts retail shops usually carry various types of parts and
consumable products such as lubricant and car batteries.
• Their primary focus is low price and product availability,
particularly in Greater Bangkok where there is intense
competition due to a high number of shops.
Parts retail shops in Bang Plat district,
suburb of Greater Bangkok (GBKK)
THAILAND DISTRIBUTION PLAYERS OVERVIEW
Build · Compete · Grow14 consulting.bc@ipsos.com
Branded service providers and certified independent workshops will be the
beneficiaries of the growing demand for independent aftermarket services
THAILAND REPAIR CHANNELS OVERVIEWTHAILAND REPAIR CHANNELS OVERVIEW
• Major channel for new car
sales
• Primary repair and
maintenance channel for
cars under warranty
• Standardised repair shops
• Primarily affiliates of tire
manufacturing companies
• Two major types of
certified independent
workshops:
1. Car painting
workshops
2. Body work workshops
• Generally have limited
service offerings
compared to other
channels
• 2,000 outlets nationwide • More than 500 outlets
mainly in key urban areas
• 800-1,000 outlets
nationwide
• ~10,000 outlets in both
urban and rural areas
• Car check-up
• Heavy and small parts
repair*
• Car polishing
• Car check-up
• Mostly focus on changing
consumable parts such as
tires and lubricant
• Car check-up
• Heavy and small parts
repair
• Car polishing
• Car check-up
• Small parts repair
• Some can perform heavy
repair
• Highest repair capability
• Highest price compared to
other channels
• Standardised services with
various promotions
• Convenient due to short
waiting times
• High price and low
coverage
• Second highest repair
capability after 4S/3S
• More reliable than
uncertified independent
workshops
• Low coverage
• Highest coverage
• Lowest price
• Least reliable channel due
to unstandardised service
and parts offering
4S/3S Branded Service Provider
Certified Independent
Workshop
Uncertified Independent
Workshop
*Note: Heavy repair refers to body work and suspension system repairs
No. of Outlets
Strengths &
Weaknesses
Future Trend
Key Service
Offerings
Description
Build · Compete · Grow
1. Automotive Aftermarket Industry Landscape
2. Thailand Aftermarket Distribution Channel Structure
3. Indonesia Aftermarket Distribution Channel Structure
4. End Channel Service Offering
5. End User Purchasing Behaviour
6. Recommendations & Implications
Build · Compete · Grow16 consulting.bc@ipsos.com
OES Channel Independent Aftermarket Channel Structure
*Non-OE distributor: OE parts manufacturers’ after-market product and brand
Parts players enter the aftermarket through four distributor types which use
varying business models
Distributors End Channels
OES Parts
Manufacturers
Vehicle OEM
Authorized
Dealers (2S/3S)
𝟏 𝒔𝒕
Tier
Distributor
Local Non-OE Parts Manufacturers
Direct
Importer
Parts Retail Shop / Wholesaler
End-users
Uncertified
Independent
Workshops
Branded
Workshops
Primary Channel
Secondary Channel
Authorized Parts Supplier
Foreign Non-OE Parts
Manufacturers
Non-OE
distributor*
OES After-market
Manufacturers
End Channel Workshops
OE Manufacturers
Certified
Independent
Workshops
Build · Compete · Grow17 consulting.bc@ipsos.com
Independent aftermarket channels, particularly in 1st tier cities, have a greater
tendency to specialise in selling one brand for a specific part type
Least Prominent Most Prominent
Distributors End Channels
Main Channel
Products
Offered
Policies and
Procedures
Multiple Part Types for
One Car Brand
One Part Type One Brand
(Carry a Specific Part Type)
One Part Type One Brand
(Carry Multiple Part Types)
Authorized Parts Supplier Importers Non-OE Distributors 1st Tier Distributors
• Genuine parts supplied
directly by vehicle OEMs
• Non-genuine parts and
brands that have limited
presence
• Non-genuine parts
from OES after-
market
manufacturers
• Non-genuine parts
from non-OE
manufacturers
• Authorized dealers
• Parts retail shops
• Parts retail shops
• End channels
• 1st tier distributors
• Parts retail shops
• Parts retail shops
• Larger end channels
• Nationwide through main
dealers in each region
• Within city/region
• Cross-city by request
• Within city/region
• Cross-city by
another distributor
• Typically have
representative
offices nationwide
• Appointed by vehicle
OEM to be its authorized
distributors
• Heavily regulated in
terms of sales channel
coverage and margins
• Have pre-existing
partnership with foreign
parts players
• Minimal procedures in
supplying to parts value
chain
• Regulated by brand principles, mainly to
prevent them from carrying a different brand
of the same part type
• Typically have to be a licensed business entity
and have warehouse for inventory stock
• PT Toyota Astra Motor
• PT Imora Motor (Honda)
• Individual persons at
retail shop clusters
• PT Ardendi Jaya
Sentosa
• PT Karya Cipta
Utama
Channel
Coverage
Geographical
Coverage
Sample of
Players
Build · Compete · Grow18 consulting.bc@ipsos.com
Trend towards branded workshops will result in specialization of service and
product offerings, as well as greater control in managing quality and authenticity
Distributors End Channels
Sample of
Players
Parts
available
Future
Trend
Branded
Workshops
Authorized Dealers
Uncertified
Independent WS
Certified
Independent WS
Services
Offered
Jakarta: 250-300
Other 1st tier cities: 120-
170
Jakarta: 550-600
Other 1st tier cities: 160-
200
Nationwide: 500-600 Jakarta: 1,200-1,500
Other 1st tier cities: 750-
900
• Auto2000 (Toyota)
• PT Anugerah Mobil
Utama (Suzuki)
• Shop and Drive
• Toko Model
• CV Putra Wijaya
Motor
• CV Surya Kencana
• Agung Jaya Motor
• Sinar Sakti UD
Provides all services and
maintenance needed for
specific OEM brand
Greater specialization
(e.g. AC repair, tire change
shops, battery change)
Specialised in body
repair. Only ~5-10% can
provide general services
Generalists
• Less advanced in terms
of technology and
equipment
Complete stock for the
OEM genuine parts
Larger stock for their
specialised parts type
Only stock parts for
body repair, and very
limited stock for other
parts type
Limited inventory stock
• Carry fast-moving
replacement parts
• Would purchase on ad-
hoc basis from retailers
No. of
Outlets
Build · Compete · Grow19 consulting.bc@ipsos.com
Retailers in 1st tier cities are typically brand-specialised shops, while those in 2nd
tier cities sell a variety of products and brands as mass retailers
Major Retailer Models
Distributors End Channels
Brand-specialized retailer Mass retailer
Brand-Specialized Retailer Mass Retailer
• Sell spare parts and a variety of brands for one
to two specific car brands (e.g. Honda, Toyota
parts retailer)
• Typically sell both the genuine and non-
genuine brands of the products
• Mostly located in 1st tier cities
• Carry a wide variety of brands for multiple
part types
• Sell multiple parts for multiple car brands
• Typically sell non-genuine brands, with
some proportion of genuine brands
• Mostly located in 2nd tier cities
• Typically purchase from 1st tier distributor or
direct importer
• Sell directly to end users or end channels; also
sell to mass retailers in 2nd tier cities
• Typically purchase from 1st tier distributor,
direct importer, or brand-specialised
retailer
• Sell directly to end users or end channels
in remote regions in 2nd tier cities
Key
Characteristics
Main
Purchasing &
Selling Channel
Build · Compete · Grow
1. Automotive Aftermarket Industry Landscape
2. Thailand Aftermarket Distribution Channel Structure
3. Indonesia Aftermarket Distribution Channel Structure
4. End Channel Service Offering
5. End User Purchasing Behaviour
6. Recommendations & Implications
Build · Compete · Grow21 consulting.bc@ipsos.com
Independent workshops in Indonesia are less technologically equipped and as a
result performs at a lower service quality
WORKSHOP EQUIPMENT AVAILABILITY AT END CHANNELS
Workshop Equipments
Authorized
Workshops
Branded
Workshops
Uncertified
Independent
Workshops
Certified
Independent
Workshops
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
63%
57%
43%
86%
71%
53%
37%
77%
87%
90%
73%
51%
13%
68%
59%
47%
13%
50%
73%
63%Handheld Diagnostic
Tester
Internet Connection
(Outlet internet
access)
Engine Diagnostic
Tester
Brake Bleeder
Repair Shop Pit
Thailand Indonesia
53%
0%
0%
37%
3%
77%
53%
70%
80%
87%
Build · Compete · Grow22 consulting.bc@ipsos.com
The level of development in certified independent workshops in Indonesia still lag
behind Thailand
REPLACEMENT SERVICES OFFERED AT END CHANNELS
Product Group
Authorized
Workshops
Branded
Workshops
Uncertified
Independent
Workshops
Certified
Independent
Workshops
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
43%
57%
71%
57%
67%
43%
71%
53%
43%
77%
53%
100%
50%
100%
72%
75%
80%
75%
80%
75%
72%
43%
63%
57%
50%
97%
43%
97%Clutches
Steering Gears
Brake Callipers
Manual Gearbox
Power Steering
Pumps
Automatic
Gearboxes
Entire Engine
0%
0%
3%
0%
5%
3%
3%
50%
70%
67%
83%
100%
57%
100%
Thailand Indonesia
Build · Compete · Grow
1. Automotive Aftermarket Industry Landscape
2. Thailand Aftermarket Distribution Channel Structure
3. Indonesia Aftermarket Distribution Channel Structure
4. End Channel Service Offering
5. End User Purchasing Behaviour
6. Recommendations & Implications
Build · Compete · Grow24 consulting.bc@ipsos.com
Due to Indonesian consumers’ lack of parts knowledge, they have a greater
tendency to rely on OEM recommendations and dealers for parts change
CONSUMER SERVICE PREFERENCES FOR GENUINE PARTS
Consumer Service Preference at Authorized Dealers by Requirement Type
0 10 20 30 40 50 60 70 80 90 100
IndonesiaThailand
Tire
Other Service
Channels
Brake Pad
Gasoline Filter
Car Battery
0 10 20 30 40 50 60 70 80 90 100
0 10 20 30 40 50 60 70 80 90 100
0 10 20 30 40 50 60 70 80 90 100
Authorized
Dealers
Source: n> 400 online surveys among out-of-warranty drivers in
Indonesia, and >200 online surveys in Thailand
Build · Compete · Grow25 consulting.bc@ipsos.com
Consumers’ disregard for brand awareness leads to greater preference for
genuine OEM parts, as such products’ quality can be assured and relied on
CONSUMER SERVICE PREFERENCE FOR GENUINE PARTS
Indonesia - Preference Between OEM and Non-OEM parts Thailand - Preference Between OEM and Non-OEM parts
46%
42%
12%
OEM only
OEM unless
it’s too
expensive
No
preference
51%
36%
11%
2%
Always prefer non-OEM
OEM only
OEM unless
it’s too
expensive
No
preference
• Consumers in both Thailand and Indonesia have a great preference for genuine parts. This tendency is mainly
attributed to a perception of higher product quality, suitability and price assurance.
• Growing popularity towards authorized outlets in Indonesia results from perception that products are genuine.
– ~30% of consumers surveyed prefer to purchase from authorized workshops even after warranty period expires
– ~28% of consumers prefer to purchase at parts retail shops where genuine products are available.
Source: n> 400 online surveys among out-of-warranty drivers in
Indonesia, and >200 online surveys in Thailand
Build · Compete · Grow26 consulting.bc@ipsos.com
Availability of products, especially perceived genuine parts, is prioritized by car
users in Indonesia as consumers are typically not highly knowledgeable on parts
CONSUMER PURCHASING SELECTION CRITERIA
1.4%
5.3%
6.0%
6.5%
12.0%
41.6%
27.2%
Product
availability
Genuine products
Mechanics / OEM
recommendation
Warranty given
on spare-parts
Large
product range
Brand image
Others*
Key Selection Criteria for Parts Disregarding Price
• Service convenience, reliability and value for
money are prioritized by car users in Indonesia as
consumers are typically not highly knowledgeable
on auto-parts
• Consumers tend to remain loyal to a particular
brand for a particular part regardless of its price,
brand image or other products available
─ These preferred brands are typically those
recommended by OEM and mechanics
• When purchasing from retailers, ~70% of
consumers surveyed would bring purchased parts
to workshops to whom they are loyal, and trust
that mechanics’ capability and service fees can be
relied on
• Consumers are largely unaware of counterfeit
products’ presence in Indonesia. Only slightly over
10% of consumers surveyed have encountered
counterfeit products before.
Source: > 400 online surveys among out-of-warranty drivers
in Indonesia, and channel players interview
*Others include low risk of counterfeit products and mass
advertising/promotion
Build · Compete · Grow27 consulting.bc@ipsos.com
Mechanics and OEM recommendations are most influential, as they are perceived
to be most reliable and possess widest knowledge of parts and car maintenance
CONSUMER PURCHASING DECISION KEY INFLUENCERS
Consumers’ Key Decision-Making Influencers
0
1
2
3
4
5
Mechanics
Shop
Owner
Friends /
Family
Advertising
OEM
manual
book and
dealer
recommen
dations
Scale of 1-5:
 1: least influential
 5: most influential
• Mechanics, being at the front line of workshops,
have direct influence on consumers when they
discuss issues related to cars.
─ Mechanics generally have wide knowledge of
parts types and brands. Able to distinguish
quality and specification differences between
genuine and non-genuine parts
• OEM manual books and authorized dealer
recommendations are perceived to be more
trustworthy as these come directly from vehicle
manufacturers
─ Consumers would call dealer mechanics to seek
opinion on which non-genuine brands are
recommended if genuine parts are unavailable
• Mass advertising/publication is considered least
influential by consumers because:
─ Exact benefits are unknown and unclear
─ Consumers are risk averse and are less willing to
try new brands
Source: > 400 online surveys among out-of-warranty drivers
in Indonesia, and channel players interview
Build · Compete · Grow
1. Automotive Aftermarket Industry Landscape
2. Thailand Aftermarket Distribution Channel Structure
3. Indonesia Aftermarket Distribution Channel Structure
4. End Channel Service Offering
5. End User Purchasing Behaviour
6. Recommendations & Implications
Build · Compete · Grow29 consulting.bc@ipsos.com
Relative to Thailand, Indonesia’s PV landscape is underdeveloped in terms of out-
of-warranty, aftermarket network and consumer knowledge development
COMPARISON BETWEEN INDONESIA AND THAILAND
1
2
3
PV OUT-OF-WARRANTY
MARKET
CHANNEL ESTABLISHMENT
CONSUMER AWARENESS
• Indonesia still lags behind Thailand in PV landscape development, as
indicated by its low PV ownership ratio of only 4 per 100 people.
• Despite its underdevelopment, Indonesia remains an attractive market:
─ Market to be driven by its high sales trajectory, overtaking Thailand
─ Favorable demographic trends through widespread rise of consumer
class and urbanization levels.
• Thailand’s more established networks enable distributors to directly sell
to them – unlike in Indonesia, where underdeveloped end channels
require distributors to leverage off retail shops.
• As in Thailand, Indonesia’s more developed channels tend to specialize in
specific parts. However, workshops in Thailand are adding consumable
parts and accessories to their portfolios as points of differentiation from
one another.
• Indonesian consumers are more loyal towards trusted parts due to their
generally lower awareness of other brands/products.
• As such, it is easier to convince Thai consumers to try non-genuine parts
with better value for money and comparable quality to genuine parts.
Build · Compete · Grow30 consulting.bc@ipsos.com
Focus on enhancing brand awareness, targeting partnerships with relevant
distributors, and prioritising the high-growth North and Northeast regions
MAIN RECOMMENDATIONS FOR THAILAND PARTS PLAYERS
1 2 3Parts Branding Channel Development Geographical Landscape
64% of surveyed customers are
comfortable with using non-OEM
parts, due to:
• Lower product price
• Perceived equivalent quality
with OEM parts
Brand awareness is closely linked to
quality perception
Develop a targeted and relevant
value proposition to ensure brand
awareness in the emerging
independent aftermarket
Workshop equipment suppliers will
benefit from branded service
providers and independent
workshop equipment upgrade
demand, while independent
aftermarket parts and accessories
brands will need to closely follow
the development of this channel to
benefit from its development
Track the development of the
channel, identify relevant
distributors and develop
partnerships with them
With large populations, low average
household income, low overall
vehicle ownership rates and high
second hand car transactions, the
North and Northeast will be the key
regions outside of Bangkok driving
demand for independent
aftermarket services
Prioritized the development of
distribution coverage in regions
where demand growth is expected
to be highest
Build · Compete · Grow31 consulting.bc@ipsos.com
Focus on retail channel coverage, navigating the growth of OEM genuine parts
and targeting workshop mechanics as consumers’ key influencer
MAIN RECOMMENDATIONS FOR INDONESIAN PARTS PLAYERS
1 2 3Optimize Distribution Competition in IAM Consumer Purchasing
Challenges faced by parts players:
• Identifying qualified distributors
to partner with
• Track and control distributors’
purchasing and selling channels
Stabilizing and identifying relevant
partners to become distributors
through standardized screening
procedures
Growing modern channels generate
opportunities for direct selling and
enforcing greater control on
product sales channels
Consumers’ preference shift
towards OEM genuine products
• Perceived to be higher quality
and reliable products
• End channels enjoy higher
margins and turnover
• Localize and re-assess product
offerings
• Redefine price positioning
• Enhance branding and
communications with end
channels and users
Consumers’ lack of parts
knowledge is highly influenced by
workshop mechanics
• Mechanics prioritise genuine
products for parts critical to
vehicle engine and usage
• Consumers remain loyal to
trusted and reliable mechanics
and particular brands
• Consumers show minimal
willingness to learn or try new
brands
Target promotional strategies
toward mechanics to ensure that
they recommend specific parts
brands
Build · Compete · Grow32 consulting.bc@ipsos.com
Ipsos Automotive Publications 2016 ( Please click at the paper to download)
After Market Thailand
After Market Indonesia
ASEAN Lubricant
Connected Car
Build · Compete · Grow33 consulting.bc@ipsos.com
About Ipsos Business Consulting
Ipsos Business Consulting is the specialist consulting division
of Ipsos, which is ranked third in the global research industry.
With a strong presence in 87 countries, Ipsos employs more
than 16,000 people.
We have the ability to conduct consulting engagements in
more than 100 countries. Our team of consultants has been
serving clients worldwide, through our 21 consulting "hubs"
since 1994. Our suite of solutions has been developed using
over 20 years experience of working on winning sales and
marketing strategies for developed, and emerging markets.
There is no substitute for first-hand knowledge when it comes
to understanding an industry. We draw on the detailed industry
expertise of our consultants which has been accumulated
through practical project execution.
Founded in France in 1975, Ipsos is controlled and managed by
research and consulting professionals. They have built a solid
Group around a multi-specialist positioning. Ipsos is listed on
Eurolist - NYSE-Euronext. The company is part of the SBF 120
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Indonesia & Thailand's Growing Automotive Aftermarket Landscape

  • 1. Build · Compete · Grow 1 2016 INDONESIA & THAILAND’S GROWING AUTOMOTIVE AFTERMARKET LANDSCAPE Presented by: Chukiat Wongtaveerat
  • 2. Build · Compete · Grow2 consulting.bc@ipsos.com OUR VISION OUR PROPOSITION To Provide Practical Advice for Business Fact-based Strategic Consulting OUR EXPERTISE Business-to-business specialists with proven solutions to address the most common problems: • Business Unit Strategy • Competitive Insights • Go-to-Market • Innovation Scouting • Partner Evaluation • Sales & Marketing Overview
  • 3. Build · Compete · Grow3 consulting.bc@ipsos.com Our Service Range in Automotive Related Industries Automotive Related Auto OEM Vehicle Parts Other Vehicle Related Clients Various types of vehicles: • Commercial vehicles • Passenger vehicles Various types of parts & components for vehicles: • Engine and engine parts • Filters • Tires • Other parts Other auto-related products: • Automotive lubricant • Automotive painting • Other products Construction Vehicle OEM Product coverage Various types of construction vehicles: • Excavator • Bulldozer • Forklift • Dump truck • Other construction vehicles
  • 4. 4 Build · Compete · Grow About Speaker Chukiat Wongtaveerat Senior Consulting Manager chukiat.wongtaveerat@ipsos.com +66 2 697 0111 Chukiat is a Senior Consulting Manager with Ipsos Business Consulting which he joined after having worked in Singapore, Indonesia and Malaysia. He has been extensively involved in major market expansion initiatives for many global automotive clients including OEM, tier 1, tier 2 suppliers as well as raw material suppliers. His key expertise are Go-to-market strategy, value chain analysis, competitive insight and partner evaluation solutions. Chukiat is also responsible for developing consulting practice and industry research across automotive sector in ASEAN. He has now appeared in several media such as Reuters, Wall Street Journal, Bangkok Post, The Straits Times and many local ASEAN presses as an acknowledged expert on the ASEAN automotive industry.
  • 5. Build · Compete · Grow 1. Automotive Aftermarket Industry Landscape 2. Thailand Aftermarket Distribution Channel Structure 3. Indonesia Aftermarket Distribution Channel Structure 4. End Channel Service Offering 5. End User Purchasing Behaviour 6. Recommendations & Implications
  • 6. Build · Compete · Grow6 consulting.bc@ipsos.com ASEAN's rapidly developing economy is driven largely by Indonesia and Thailand, which take the major share of automotive sales and production in the region INDONESIA & THAILAND VS THE REST OF ASEAN 2010-2030 ASEAN GDP 2015 ASEAN Motor Vehicle Sales * Other South-East Asia nations include: Brunei, Malaysia, Philippines, Singapore, Vietnam, Cambodia, Lao PDR and Myanmar 38% 39% 17% 15% 45% 46% 2010 2030 Indonesia Thailand Others* 33% 26% 41% Thailand Others* Indonesia 28% 49% 23% 2015 ASEAN Motor Vehicle Production Thailand Others* Indonesia Unit in billion USD 1,871 5,476 Source: Asian Development Bank; ASEAN Automotive Federation
  • 7. Build · Compete · Grow7 consulting.bc@ipsos.com Indonesia lags behind Thailand’s PV population ratio but its annual sales trajectory highlights a positive trend driven by its favorable demographic trends INDONESIA AND THAILAND AUTOMOTIVE LANDSCAPE 6.7 10.2 14.710.1 13.9 18.2 2011 2012 2013 2014 2015 2020 0.8 1.0 1.2 0.8 0.8 1.0 2011 2012 2013 2014 2015 2020 PV population Thailand vs. Indonesia* PV annual sales Thailand vs. Indonesia* Indonesia Thailand PV population per 100 people, 2015* Indonesia Thailand 4.0 20.8 Unit in millions Unit in millions * PV population and sales include light-duty/pick-up trucks for Indonesia and LCV for Thailand
  • 8. Build · Compete · Grow8 consulting.bc@ipsos.com Indonesia’s PV landscape remains relatively underdeveloped even in its 1st tier cities, compared to Thailand’s corresponding ownership data PV OWNERSHIP RATIO (PER 1,000) West 234 Central 180 Medan 91 Jakarta 142 Bandung 81 Surabaya 69 Indonesia PV Ownership Ratio (per 1,000) Thailand PV Ownership Ratio (per 1,000) Northeast 107 East 238 North 171 South 163 Bangkok 587
  • 9. Build · Compete · Grow9 consulting.bc@ipsos.com Despite Indonesia’s lower PV ownership ratio, its PV out-of-warranty population is expected to have stronger growth than Thailand in the next 5 years VEHICLE POPULATION BY CAR AGE PV Population by Car Age in Indonesia and Thailand* CAGR 2015-2020 * PV population and sales include light-duty/pick-up trucks for Indonesia and LCV for Thailand ID 2015 TH 2015 ID 2020 TH 2020 Car Age older than 8 Car Age 3 - 8 Car Age 0 - 3 23% 10.2 32% 38% 43% 13.9 31% 48% 21% 18.2 32% 52% 16% 0 – 3 years 3 – 8 years >8 years 2.3% 8.9% 10.4% -0.3% 6.3% 7.0% Indonesia Thailand 7.7% 5.3%Overall growth 30% 14.7 34% 77% 84%
  • 10. Build · Compete · Grow10 consulting.bc@ipsos.com Differences in out of warranty models between the two countries will impact part types, purchasing channels and pricing strategies for parts players OUT OF WARRANTY PASSENGER VEHICLE POPULATION * PV population and sales include light-duty/pick-up trucks for Indonesia and LCV for Thailand Thailand’s 2015 Out-of-Warranty PV Population by Brand 35% 21% 11% 10% 8% 4% 3% 9% Others* 11.06 million Units *Others includes Chevrolet, Mercedes, BMW, etc. Indonesia’s 2015 Out-of-Warranty PV Population by Brand 47% 17% 9% 8% 7% 3% 9% Others* 7.14 million Units *Others includes Kia, Chevrolet, Mercedes, BMW, VW etc.
  • 11. Build · Compete · Grow 1. Automotive Aftermarket Industry Landscape 2. Thailand Aftermarket Distribution Channel Structure 3. Indonesia Aftermarket Distribution Channel Structure 4. End Channel Service Offering 5. End User Purchasing Behaviour 6. Recommendations & Implications
  • 12. Build · Compete · Grow12 consulting.bc@ipsos.com Thailand’s more established networks enable distributors to directly engage with end channels without having to leverage parts retail shops for wider coverage THAILAND CHANNEL STRUCTURE MAPPINGTHAILAND CHANNEL STRUCTURE MAPPING Parts Manufacturers OEM (parts center / parts department) End-users 4S/3S Parts Manufacturers/imports End-users Certified Independent Workshops Branded Service Provider Parts Retail Shop General Parts Distributor Uncertified Independent Workshops Primary Channel Secondary Channel OES Channel Independent Aftermarket Channel Structure • Most retail shops use online channels only to promote their outlets, as online sales are estimated to account for less than 5% of their total sales • With their established networks, general parts distributors are important partners for companies looking to enter the independent aftermarket
  • 13. Build · Compete · Grow13 consulting.bc@ipsos.com ~60 authorised parts distributors are active in the market, while the number of general distributors and parts retail shops is estimated to be much higher Key Stakeholders General Parts Distributor Description Examples • There are two types of general parts distributors: 1. Authorised parts distributors for OEMs, which carry parts of specific brands. There are approximately 60 authorised distributors in the market. 2. General distributors, which carry several brands of OEM and REM parts. They generally focus on specific product lines, for example body work, car accessories, auto seats. • In addition, most general parts distributors cooperate with car insurance companies to distribute products to the certified independent workshops. Parts Retail Shops • Parts retail shops are located nationwide. They mostly receive products from general parts distributors. It is estimated that there are around 500-600 parts retail shops in Greater Bangkok. • Parts retail shops usually carry various types of parts and consumable products such as lubricant and car batteries. • Their primary focus is low price and product availability, particularly in Greater Bangkok where there is intense competition due to a high number of shops. Parts retail shops in Bang Plat district, suburb of Greater Bangkok (GBKK) THAILAND DISTRIBUTION PLAYERS OVERVIEW
  • 14. Build · Compete · Grow14 consulting.bc@ipsos.com Branded service providers and certified independent workshops will be the beneficiaries of the growing demand for independent aftermarket services THAILAND REPAIR CHANNELS OVERVIEWTHAILAND REPAIR CHANNELS OVERVIEW • Major channel for new car sales • Primary repair and maintenance channel for cars under warranty • Standardised repair shops • Primarily affiliates of tire manufacturing companies • Two major types of certified independent workshops: 1. Car painting workshops 2. Body work workshops • Generally have limited service offerings compared to other channels • 2,000 outlets nationwide • More than 500 outlets mainly in key urban areas • 800-1,000 outlets nationwide • ~10,000 outlets in both urban and rural areas • Car check-up • Heavy and small parts repair* • Car polishing • Car check-up • Mostly focus on changing consumable parts such as tires and lubricant • Car check-up • Heavy and small parts repair • Car polishing • Car check-up • Small parts repair • Some can perform heavy repair • Highest repair capability • Highest price compared to other channels • Standardised services with various promotions • Convenient due to short waiting times • High price and low coverage • Second highest repair capability after 4S/3S • More reliable than uncertified independent workshops • Low coverage • Highest coverage • Lowest price • Least reliable channel due to unstandardised service and parts offering 4S/3S Branded Service Provider Certified Independent Workshop Uncertified Independent Workshop *Note: Heavy repair refers to body work and suspension system repairs No. of Outlets Strengths & Weaknesses Future Trend Key Service Offerings Description
  • 15. Build · Compete · Grow 1. Automotive Aftermarket Industry Landscape 2. Thailand Aftermarket Distribution Channel Structure 3. Indonesia Aftermarket Distribution Channel Structure 4. End Channel Service Offering 5. End User Purchasing Behaviour 6. Recommendations & Implications
  • 16. Build · Compete · Grow16 consulting.bc@ipsos.com OES Channel Independent Aftermarket Channel Structure *Non-OE distributor: OE parts manufacturers’ after-market product and brand Parts players enter the aftermarket through four distributor types which use varying business models Distributors End Channels OES Parts Manufacturers Vehicle OEM Authorized Dealers (2S/3S) 𝟏 𝒔𝒕 Tier Distributor Local Non-OE Parts Manufacturers Direct Importer Parts Retail Shop / Wholesaler End-users Uncertified Independent Workshops Branded Workshops Primary Channel Secondary Channel Authorized Parts Supplier Foreign Non-OE Parts Manufacturers Non-OE distributor* OES After-market Manufacturers End Channel Workshops OE Manufacturers Certified Independent Workshops
  • 17. Build · Compete · Grow17 consulting.bc@ipsos.com Independent aftermarket channels, particularly in 1st tier cities, have a greater tendency to specialise in selling one brand for a specific part type Least Prominent Most Prominent Distributors End Channels Main Channel Products Offered Policies and Procedures Multiple Part Types for One Car Brand One Part Type One Brand (Carry a Specific Part Type) One Part Type One Brand (Carry Multiple Part Types) Authorized Parts Supplier Importers Non-OE Distributors 1st Tier Distributors • Genuine parts supplied directly by vehicle OEMs • Non-genuine parts and brands that have limited presence • Non-genuine parts from OES after- market manufacturers • Non-genuine parts from non-OE manufacturers • Authorized dealers • Parts retail shops • Parts retail shops • End channels • 1st tier distributors • Parts retail shops • Parts retail shops • Larger end channels • Nationwide through main dealers in each region • Within city/region • Cross-city by request • Within city/region • Cross-city by another distributor • Typically have representative offices nationwide • Appointed by vehicle OEM to be its authorized distributors • Heavily regulated in terms of sales channel coverage and margins • Have pre-existing partnership with foreign parts players • Minimal procedures in supplying to parts value chain • Regulated by brand principles, mainly to prevent them from carrying a different brand of the same part type • Typically have to be a licensed business entity and have warehouse for inventory stock • PT Toyota Astra Motor • PT Imora Motor (Honda) • Individual persons at retail shop clusters • PT Ardendi Jaya Sentosa • PT Karya Cipta Utama Channel Coverage Geographical Coverage Sample of Players
  • 18. Build · Compete · Grow18 consulting.bc@ipsos.com Trend towards branded workshops will result in specialization of service and product offerings, as well as greater control in managing quality and authenticity Distributors End Channels Sample of Players Parts available Future Trend Branded Workshops Authorized Dealers Uncertified Independent WS Certified Independent WS Services Offered Jakarta: 250-300 Other 1st tier cities: 120- 170 Jakarta: 550-600 Other 1st tier cities: 160- 200 Nationwide: 500-600 Jakarta: 1,200-1,500 Other 1st tier cities: 750- 900 • Auto2000 (Toyota) • PT Anugerah Mobil Utama (Suzuki) • Shop and Drive • Toko Model • CV Putra Wijaya Motor • CV Surya Kencana • Agung Jaya Motor • Sinar Sakti UD Provides all services and maintenance needed for specific OEM brand Greater specialization (e.g. AC repair, tire change shops, battery change) Specialised in body repair. Only ~5-10% can provide general services Generalists • Less advanced in terms of technology and equipment Complete stock for the OEM genuine parts Larger stock for their specialised parts type Only stock parts for body repair, and very limited stock for other parts type Limited inventory stock • Carry fast-moving replacement parts • Would purchase on ad- hoc basis from retailers No. of Outlets
  • 19. Build · Compete · Grow19 consulting.bc@ipsos.com Retailers in 1st tier cities are typically brand-specialised shops, while those in 2nd tier cities sell a variety of products and brands as mass retailers Major Retailer Models Distributors End Channels Brand-specialized retailer Mass retailer Brand-Specialized Retailer Mass Retailer • Sell spare parts and a variety of brands for one to two specific car brands (e.g. Honda, Toyota parts retailer) • Typically sell both the genuine and non- genuine brands of the products • Mostly located in 1st tier cities • Carry a wide variety of brands for multiple part types • Sell multiple parts for multiple car brands • Typically sell non-genuine brands, with some proportion of genuine brands • Mostly located in 2nd tier cities • Typically purchase from 1st tier distributor or direct importer • Sell directly to end users or end channels; also sell to mass retailers in 2nd tier cities • Typically purchase from 1st tier distributor, direct importer, or brand-specialised retailer • Sell directly to end users or end channels in remote regions in 2nd tier cities Key Characteristics Main Purchasing & Selling Channel
  • 20. Build · Compete · Grow 1. Automotive Aftermarket Industry Landscape 2. Thailand Aftermarket Distribution Channel Structure 3. Indonesia Aftermarket Distribution Channel Structure 4. End Channel Service Offering 5. End User Purchasing Behaviour 6. Recommendations & Implications
  • 21. Build · Compete · Grow21 consulting.bc@ipsos.com Independent workshops in Indonesia are less technologically equipped and as a result performs at a lower service quality WORKSHOP EQUIPMENT AVAILABILITY AT END CHANNELS Workshop Equipments Authorized Workshops Branded Workshops Uncertified Independent Workshops Certified Independent Workshops 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 63% 57% 43% 86% 71% 53% 37% 77% 87% 90% 73% 51% 13% 68% 59% 47% 13% 50% 73% 63%Handheld Diagnostic Tester Internet Connection (Outlet internet access) Engine Diagnostic Tester Brake Bleeder Repair Shop Pit Thailand Indonesia 53% 0% 0% 37% 3% 77% 53% 70% 80% 87%
  • 22. Build · Compete · Grow22 consulting.bc@ipsos.com The level of development in certified independent workshops in Indonesia still lag behind Thailand REPLACEMENT SERVICES OFFERED AT END CHANNELS Product Group Authorized Workshops Branded Workshops Uncertified Independent Workshops Certified Independent Workshops 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 43% 57% 71% 57% 67% 43% 71% 53% 43% 77% 53% 100% 50% 100% 72% 75% 80% 75% 80% 75% 72% 43% 63% 57% 50% 97% 43% 97%Clutches Steering Gears Brake Callipers Manual Gearbox Power Steering Pumps Automatic Gearboxes Entire Engine 0% 0% 3% 0% 5% 3% 3% 50% 70% 67% 83% 100% 57% 100% Thailand Indonesia
  • 23. Build · Compete · Grow 1. Automotive Aftermarket Industry Landscape 2. Thailand Aftermarket Distribution Channel Structure 3. Indonesia Aftermarket Distribution Channel Structure 4. End Channel Service Offering 5. End User Purchasing Behaviour 6. Recommendations & Implications
  • 24. Build · Compete · Grow24 consulting.bc@ipsos.com Due to Indonesian consumers’ lack of parts knowledge, they have a greater tendency to rely on OEM recommendations and dealers for parts change CONSUMER SERVICE PREFERENCES FOR GENUINE PARTS Consumer Service Preference at Authorized Dealers by Requirement Type 0 10 20 30 40 50 60 70 80 90 100 IndonesiaThailand Tire Other Service Channels Brake Pad Gasoline Filter Car Battery 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 Authorized Dealers Source: n> 400 online surveys among out-of-warranty drivers in Indonesia, and >200 online surveys in Thailand
  • 25. Build · Compete · Grow25 consulting.bc@ipsos.com Consumers’ disregard for brand awareness leads to greater preference for genuine OEM parts, as such products’ quality can be assured and relied on CONSUMER SERVICE PREFERENCE FOR GENUINE PARTS Indonesia - Preference Between OEM and Non-OEM parts Thailand - Preference Between OEM and Non-OEM parts 46% 42% 12% OEM only OEM unless it’s too expensive No preference 51% 36% 11% 2% Always prefer non-OEM OEM only OEM unless it’s too expensive No preference • Consumers in both Thailand and Indonesia have a great preference for genuine parts. This tendency is mainly attributed to a perception of higher product quality, suitability and price assurance. • Growing popularity towards authorized outlets in Indonesia results from perception that products are genuine. – ~30% of consumers surveyed prefer to purchase from authorized workshops even after warranty period expires – ~28% of consumers prefer to purchase at parts retail shops where genuine products are available. Source: n> 400 online surveys among out-of-warranty drivers in Indonesia, and >200 online surveys in Thailand
  • 26. Build · Compete · Grow26 consulting.bc@ipsos.com Availability of products, especially perceived genuine parts, is prioritized by car users in Indonesia as consumers are typically not highly knowledgeable on parts CONSUMER PURCHASING SELECTION CRITERIA 1.4% 5.3% 6.0% 6.5% 12.0% 41.6% 27.2% Product availability Genuine products Mechanics / OEM recommendation Warranty given on spare-parts Large product range Brand image Others* Key Selection Criteria for Parts Disregarding Price • Service convenience, reliability and value for money are prioritized by car users in Indonesia as consumers are typically not highly knowledgeable on auto-parts • Consumers tend to remain loyal to a particular brand for a particular part regardless of its price, brand image or other products available ─ These preferred brands are typically those recommended by OEM and mechanics • When purchasing from retailers, ~70% of consumers surveyed would bring purchased parts to workshops to whom they are loyal, and trust that mechanics’ capability and service fees can be relied on • Consumers are largely unaware of counterfeit products’ presence in Indonesia. Only slightly over 10% of consumers surveyed have encountered counterfeit products before. Source: > 400 online surveys among out-of-warranty drivers in Indonesia, and channel players interview *Others include low risk of counterfeit products and mass advertising/promotion
  • 27. Build · Compete · Grow27 consulting.bc@ipsos.com Mechanics and OEM recommendations are most influential, as they are perceived to be most reliable and possess widest knowledge of parts and car maintenance CONSUMER PURCHASING DECISION KEY INFLUENCERS Consumers’ Key Decision-Making Influencers 0 1 2 3 4 5 Mechanics Shop Owner Friends / Family Advertising OEM manual book and dealer recommen dations Scale of 1-5:  1: least influential  5: most influential • Mechanics, being at the front line of workshops, have direct influence on consumers when they discuss issues related to cars. ─ Mechanics generally have wide knowledge of parts types and brands. Able to distinguish quality and specification differences between genuine and non-genuine parts • OEM manual books and authorized dealer recommendations are perceived to be more trustworthy as these come directly from vehicle manufacturers ─ Consumers would call dealer mechanics to seek opinion on which non-genuine brands are recommended if genuine parts are unavailable • Mass advertising/publication is considered least influential by consumers because: ─ Exact benefits are unknown and unclear ─ Consumers are risk averse and are less willing to try new brands Source: > 400 online surveys among out-of-warranty drivers in Indonesia, and channel players interview
  • 28. Build · Compete · Grow 1. Automotive Aftermarket Industry Landscape 2. Thailand Aftermarket Distribution Channel Structure 3. Indonesia Aftermarket Distribution Channel Structure 4. End Channel Service Offering 5. End User Purchasing Behaviour 6. Recommendations & Implications
  • 29. Build · Compete · Grow29 consulting.bc@ipsos.com Relative to Thailand, Indonesia’s PV landscape is underdeveloped in terms of out- of-warranty, aftermarket network and consumer knowledge development COMPARISON BETWEEN INDONESIA AND THAILAND 1 2 3 PV OUT-OF-WARRANTY MARKET CHANNEL ESTABLISHMENT CONSUMER AWARENESS • Indonesia still lags behind Thailand in PV landscape development, as indicated by its low PV ownership ratio of only 4 per 100 people. • Despite its underdevelopment, Indonesia remains an attractive market: ─ Market to be driven by its high sales trajectory, overtaking Thailand ─ Favorable demographic trends through widespread rise of consumer class and urbanization levels. • Thailand’s more established networks enable distributors to directly sell to them – unlike in Indonesia, where underdeveloped end channels require distributors to leverage off retail shops. • As in Thailand, Indonesia’s more developed channels tend to specialize in specific parts. However, workshops in Thailand are adding consumable parts and accessories to their portfolios as points of differentiation from one another. • Indonesian consumers are more loyal towards trusted parts due to their generally lower awareness of other brands/products. • As such, it is easier to convince Thai consumers to try non-genuine parts with better value for money and comparable quality to genuine parts.
  • 30. Build · Compete · Grow30 consulting.bc@ipsos.com Focus on enhancing brand awareness, targeting partnerships with relevant distributors, and prioritising the high-growth North and Northeast regions MAIN RECOMMENDATIONS FOR THAILAND PARTS PLAYERS 1 2 3Parts Branding Channel Development Geographical Landscape 64% of surveyed customers are comfortable with using non-OEM parts, due to: • Lower product price • Perceived equivalent quality with OEM parts Brand awareness is closely linked to quality perception Develop a targeted and relevant value proposition to ensure brand awareness in the emerging independent aftermarket Workshop equipment suppliers will benefit from branded service providers and independent workshop equipment upgrade demand, while independent aftermarket parts and accessories brands will need to closely follow the development of this channel to benefit from its development Track the development of the channel, identify relevant distributors and develop partnerships with them With large populations, low average household income, low overall vehicle ownership rates and high second hand car transactions, the North and Northeast will be the key regions outside of Bangkok driving demand for independent aftermarket services Prioritized the development of distribution coverage in regions where demand growth is expected to be highest
  • 31. Build · Compete · Grow31 consulting.bc@ipsos.com Focus on retail channel coverage, navigating the growth of OEM genuine parts and targeting workshop mechanics as consumers’ key influencer MAIN RECOMMENDATIONS FOR INDONESIAN PARTS PLAYERS 1 2 3Optimize Distribution Competition in IAM Consumer Purchasing Challenges faced by parts players: • Identifying qualified distributors to partner with • Track and control distributors’ purchasing and selling channels Stabilizing and identifying relevant partners to become distributors through standardized screening procedures Growing modern channels generate opportunities for direct selling and enforcing greater control on product sales channels Consumers’ preference shift towards OEM genuine products • Perceived to be higher quality and reliable products • End channels enjoy higher margins and turnover • Localize and re-assess product offerings • Redefine price positioning • Enhance branding and communications with end channels and users Consumers’ lack of parts knowledge is highly influenced by workshop mechanics • Mechanics prioritise genuine products for parts critical to vehicle engine and usage • Consumers remain loyal to trusted and reliable mechanics and particular brands • Consumers show minimal willingness to learn or try new brands Target promotional strategies toward mechanics to ensure that they recommend specific parts brands
  • 32. Build · Compete · Grow32 consulting.bc@ipsos.com Ipsos Automotive Publications 2016 ( Please click at the paper to download) After Market Thailand After Market Indonesia ASEAN Lubricant Connected Car
  • 33. Build · Compete · Grow33 consulting.bc@ipsos.com About Ipsos Business Consulting Ipsos Business Consulting is the specialist consulting division of Ipsos, which is ranked third in the global research industry. With a strong presence in 87 countries, Ipsos employs more than 16,000 people. We have the ability to conduct consulting engagements in more than 100 countries. Our team of consultants has been serving clients worldwide, through our 21 consulting "hubs" since 1994. Our suite of solutions has been developed using over 20 years experience of working on winning sales and marketing strategies for developed, and emerging markets. There is no substitute for first-hand knowledge when it comes to understanding an industry. We draw on the detailed industry expertise of our consultants which has been accumulated through practical project execution. Founded in France in 1975, Ipsos is controlled and managed by research and consulting professionals. They have built a solid Group around a multi-specialist positioning. Ipsos is listed on Eurolist - NYSE-Euronext. The company is part of the SBF 120 and the Mid-60 index and is eligible for the Deferred Settlement Service (SRD). ISIN code FR0000073298, Reuters ISOS.PA, Bloomberg IPS:FP Build · Compete · Grow At Ipsos Business Consulting we focus on maintaining our position as a leading provider of high quality consulting solutions for sales and marketing professionals. We deliver information, analysis and recommendations that allow our clients to make smarter decisions and to develop and implement winning market strategies. We believe that our work is important. Security, simplicity, speed and substance applies to everything we do. Through specialization, we offer our clients a unique depth of knowledge and expertise. Learning from different experiences gives us perspective and inspires us to boldly call things into question, to be creative. By nurturing a culture of collaboration and curiosity, we attract the highest calibre of people who have the ability and desire to influence and shape the future. Our Solutions: Go-to-Market Market Sizing Business Unit Strategy Pricing Competitive Insights Forecasting Partner Evaluation Brand Strategy & Value Innovation Scouting B2B Customer Segmentation Optimal Channel Strategy Sales Detector
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