Key Things to Know About the Automotive Aftermarket

Research from the ReportLinker indicates that the Automotive Aftermarket is expected to grow by $114.1 billion in the United States. Ideally, the automotive aftermarket can be defined as the secondary market of auto parts used for maintenance and repair. The industry is concerned with the manufacturing, retailing, installation, and distribution of all vehicle equipment, accessories, parts, and chemicals, after the sale of the vehicles by the OEM (original equipment manufacturer), to the consumer. Automotive aftermarket firms include Federal-Mogul, CARDONE Industries, General Motors, and Standard Motor Products, Denso. That said, here are some key things to know about the automotive aftermarket.

Aftermarket Parts

A report by the International Trade Administration in the Department of Commerce indicates that there are two distinct categories of aftermarket parts, including the replacement components and accessories.

• Replacement parts – Replacements components are auto parts manufactured or built to replace original equipment parts when they get damaged or worn out.
• Accessories – These are designed for convenience, safety, comfort, customization, or aftermarket performance parts. Mostly, these parts are built for add-on upon the original sale of the vehicle.

The automotive aftermarket incorporates auto components for collision, performance, appearance, and replacement. It offers a wide selection of parts of different prices and qualities for almost every vehicle model and makes. Freedonia research categorizes aftermarket trends into five markets, namely, electronic components, powertrain components, brake parts, filters, ignition and battery systems.

This market also provides consumers with the freedom they need to meet their automobile needs. Consumers can choose to repair their vehicles by themselves (DIY method) or take their cars to a professional repair company. They can choose to use the parts on their new cars to enhance performance or add in customization as well. Moreover, it helps maintain vehicles on the road by providing consumers with a convenient choice of where they want their motor vehicles maintained, serviced, or customized.

Size of the Automotive Aftermarket

The U.S automotive aftermarket was projected to increase to $318.2 billion by 2013, which would contribute to over 2.3 percent GDP. So far, the aftermarket employs about 4.2 employees who work at the distributors, retailers, repair shops, manufactures. In the U.S, online sales have increased rapidly over the years than on physical retailers.

Although Singapore doesn't have a single automobile industry, it is one of the most significant destinations for exporting auto accessories and parts. This is probably because of the country's high automobile turnover associated with its driving policies. Singapore driving law requires vehicle owners to dispose of their vehicles after ten years of use. Ideally, the higher turnover plus a high preference for brand new parts is an indication of low demand for reconditioned and manufactured components.

Equally, a high appetite for prestige items, accessories, original spare parts, and car care products expands the aftermarket exponentially. Singapore's aftermarket is big and growing to become a significant automotive destination as many large multinational corporations have built their procurement and distribution centers. Subsequently, Canada's automotive aftermarket industry values at $19.4 and employs more than 420,000 people.

Online sales for automotive aftermarket is said to increase especially in the United States. eBay Motors and Amazon are some of the largest sellers of automotive aftermarket components and accessories in the U.S, in terms of revenue and units sold.

Automotive Aftermarket Statistics

Based on an eBook by the Freedonia Group which is a research company focused on the analysis of automotive aftermarket, NA is one of the largest aftermarket destinations. North America is said to have a large market for light vehicles that boost the demand for vehicle parts plus other related services. According to Freedonia Group, aftermarket industry statistics show that the number of light trucks, sport utility vehicles, and cars in use in North America hit 313.3 million in 2016 with subsequent demand for aftermarket parts reached $55.8 billion.

Similarly, the demand for auto parts in North America is projected to increase to about 5.2 percent every year through 2021. Statistics also indicate that the need for brake components in Mexico will increase greatly due to the increasing demand for light vehicles together with the advancing age of these cars. The critical trends for brake components include lightweight technology, regenerative braking systems, and the readily available cheap imports.

Similarly, transmissions and other parts account for about 45 percent of the aftermarket in North America. The increasing number of electronic components will increase the replacement expenses because of the growing complexity of these parts. As technology improves, vehicles' resilience and their age rises too. For that matter, long-lasting vehicles present several benefits to the aftermarket part manufacturers since older cars require more maintenance and repair.

The automotive aftermarket also has globalized markets. As automotive registrations rise across the globe, the vehicles original manufacturers are globalizing to stay ahead of the curve. The expansion of OEMs facilitates the development of new manufacturing platforms in emerging markets. These platforms also increase the number of manufactured units. Additionally, most of these OEMs strive to introduce a standardized modular automotive architecture that allows similar aftermarket car components to be used worldwide.