From Latina America and United States to Asia, passing through Europe and Africa.

What are the treats and the opportunities of the automotive aftermarket industry?

Over the past years, the Automotive Aftermarket has been mutating, affected by external factors such as climate change, pandemic and changing drivers’ habits.

New technologies and legislations, which are regulating the market, are as well factors impacting the industry but what is really happening to the automotive aftermarket business?

Diesel engines and high emissions vehicles regulations are raising at a global level influencing driver’s behavior and decision when it comes about buying a new car.

The recent 2022 Gipa’s drivers study revealed that 21% of the drivers doesn’t know what kind of vehicle to buy, questioning about the car’s autonomy, incentive, residual value in few years and the cost of petrol. Yet, among those who knows what kind of vehicle to buy, 25% prefers petrol cars and 22% hybrid.

The drop on the car sales is affected as well by the lack of electronic component and logistic issues which are slowing down the process of delivery causing a significant drop in new car’s registration.

Whereas from one side this scenario offers great opportunities for the aftersales players, we also experience an increase of online purchases with a substantial growth of e-commerce platform.

In addition, in Europe the growth of the car parc is very limited and we are experiencing an aging car parc with a decreasing value of body repairs and an increasing challenge to source some parts.

Compared to 2019, some markets are particularly suffering, therefore we see Spain with -32% car registrations, followed by -25% in France and -23% in Mexico.

However, we also recorded +25% registration in China over the past three years.

There are some good news for the IAM industry, because of the ICE car parc is aging, the cars on the road will need more maintenance, expecting a growth opportunity for nearly all product categories with the exception of some parts mainly related to diesel cars.

Lubricants, oil and air filters, timing belt, clutch, steering and suspensions parts will generate business at least for a decade.

Unless other governmental decision on financial support to the drivers, it will take between 15 to 25 years before the sales will represent 100% BEV.

When will be the end of ICE sales? The situation with regards to the future of the ICE is very different from one region to another. There are mainly three blocks in the globe:

1. Europe: declaring the end of ICE by 2035 (United Kingdom set for 2030)
2. USA and China: expect for California which set the end by 2034, USA and China have not yet set a target
3. Argentina: where the situation is still unclear

To conclude, despite the pressure of governments and new normative, IAM players are called to answer to some great opportunities offered by the aging of the car parc and the transition phase between ICE and Electric Vehicles. Many are the challenges for the automotive aftermarket industry, however new tools and trends such as digitalization and new technologies, will support the growth of the business, shaping new models and directions.