Due to the increase in the average age of vehicles, the demand for replacement components is expected to surge in the coming years, especially in emerging economies, such as those in Asia-Pacific (APAC) and Latin America, Middle East, and Africa (LAMEA). For instance, the average age of the vehicles is predicted to increase from four years to six years in China from 2010 to 2020, mainly due to huge improvements in the quality of the automobiles being manufactured, which is itself a result of the rapid adoption of advanced products.
The other major factors pushing the demand for automotive parts across the world are the burgeoning demand for electric vehicles, on account of the increasing implementation of government policies and regulations promoting the adoption of eco-friendly modes of transportation. Moreover, there has been a huge rise in green consciousness throughout the world since the last few years, which is boosting the popularity of electric vehicles. Fuelled by the above factors, the global automotive aftermarket is expected to grow from $803.22 billion in 2019 to $1,370.17 billion in 2030, with a CAGR of 5.07% during the forecast period (2020–2030).
Automotive aftermarket parts refer to the replacement parts incorporated in vehicles after their sale to the consumers; these parts may or may not be made by the original equipment manufacturers (OEMs). The major types of automotive components requiring replacement are engine parts, suspension and braking parts, electrical parts, equipment, drive transmission and steering parts, and miscellaneous parts. Amongst these, engine parts, owing to the strict government policies regarding vehicular emissions, recorded the highest demand for replacement during the historical period (2015–2019).
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Automotive aftermarket components are available
via two distribution channels, namely offline and online distribution channels.
Of these, the volume of automotive components procured through offline
distribution channels was higher during the historical period, as compared to
the ones available through online distribution channels. This was mainly due to
the easier availability of original equipment suppliers (OES) and independent
repair/replacement/maintenance services by service providers. Moreover, these
service providers offer quick, cheap, and customized services, which help in
the easier maintenance of vehicles.
The biggest rage currently being witnessed in the automotive aftermarket is the rising number of joint ventures amongst the major vehicle manufacturing companies, vehicle repair service providers, and other stakeholders. This allows the major companies to transfer the vehicle manufacturing technology to the smaller service providers, manufacture new aftermarket devices, and penetrate the markets of developing nations. For instance, DENSO CORPORATION and Smiths Manufacturing (Pty.) Ltd. announced a joint venture in July 2019, named DENSO Sales South Africa (Pty.) Ltd., in order to sell various aftermarket products and services in South Africa.
Geographically, the highest demand for vehicle component replacement was observed in Asia-Pacific (APAC) in 2019, and this trend is set to continue during the forecast period. This is primarily ascribed to the rapid rise in the number of vehicles in operation (VIO), especially in China and India. Moreover, the presence of major companies supplying automotive aftermarket components in APAC is predicted to further fuel the rise in the demand for these components in the region.
Therefore, it can be concluded that owing to the
increasing sale of automobiles in various countries across the world, the
demand for aftermarket components is expected to witness substantial growth in
the coming years.
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