Dealers looking to understand how their competitors in the automotive aftermarket are faring may be interested to note that e-commerce will emerge as a mainstream channel, according to Frost & Sullivan.
A recent analysis from the company indicates that the global aftermarket will gain momentum this year, thanks in part to the slowdown in new vehicle sales and increased aftermarket business. The market is estimated to gain $478.8 billion by 2025 from $362.21 billion in 2020—up by a 5.7% compound annual growth rate (CAGR).
“As customers shifted away from using public/shared transport in 2020, sales of used cars witnessed a boom during the same period across regions, thereby presenting potential business prospects for service providers to engage with independent aftermarket manufacturer (IAM) service contracts,” said Anuj Monga, Mobility Research Analyst at Frost & Sullivan.
He said the rapid increase of alternative powertrain vehicles is creating new categories in the parts and services aftermarket and “promoting newer business models for fulfillment.”
Global demand in the aftermarket is expected to exceed pre-COVID levels in 2022; it will likely increase by 7.1% in 2021, with revenues from online sales in the aftermarket estimated to grow 14%.
“Rising customer exposure to digital channels across lifestyle aspects will push aftermarket stakeholders to invest aggressively in digitization beyond parts retail and even workshop services,” said Monga.
His advice to market players? Explore the idea of building dedicated digital platforms on offline networks, offering standardized quality services for a wide range of vehicle types—“especially in company and retail fleets.”