Today, the global aftermarket auto parts industry spans a diverse group of companies. This economic sector currently encompasses both firms selling original equipment manufacturer (OEM) replacement parts and those supplying generic aftermarket components for use in cars, trucks, and commercial vehicles. It also includes a wide variety of auto repair and maintenance services.
Many automakers experienced a challenging 2020 due to the coronavirus pandemic. Yet the $723 billion global aftermarket auto parts industry reportedly did not sustain a downturn during this period. In fact, it experienced ongoing growth and expansion. Consider some of the challenges and opportunities for this resilient business sector during 2021:
The Continued Globalization of Auto Transportation
One ongoing trend will continue to fuel growth in the aftermarket auto parts industry this year: the rapid spread of auto transportation in Asia, Africa, and South America. As automakers struggle to meet the demand for autos in emerging markets, they also help promote the demand for aftermarket parts. This trend assists businesses in selling replacement components and auto maintenance supplies.
Currently, an estimated 1.5 billion cars, trucks, and commercial vehicles operate around the world. The number of vehicles will increase during the coming years. While efforts to construct higher quality products remain ongoing, the rising cost of new autos has generated robust growth in aftermarket parts. In the United States, the average age of cars has risen to 11.33 years.
Adherence to OEM Standards
An emphasis by automakers upon the promotion of high OEM quality to some extent decreases the need for some aftermarket parts (e.g. by increasing intervals between oil changes). However, some analysts conclude this emphasis has also stimulated the marketplace for replacement OEM components. It enables manufacturers to benefit from the growing aftermarket auto parts industry.
The current aftermarket auto parts marketplace remains splintered among a number of businesses. Some of the largest leaders include 3M Company, Aisin Seiko Co. Ltd., DENSO Corporation, and Valeo SA. Between 2020 and 2024, growth should continue to increase annually.
Probably one of the most significant opportunities for this industry during 2021 lies in expanding online sales. Auto parts sales on the Amazon website alone reached an estimated $10.3 billion during 2020. Consumers increasingly search for automotive after parts using the Internet, making the use of search engine optimization a key driver in the marketing mix.
Recently, websites featuring specialized automotive components have also proliferated. Sites selling tires, oil, and other auto supplies sometimes (but not always) direct buyers to specific retailers. They may allow consumers to avoid some retail markups. For safety reasons, preventing sales of counterfeited goods remains important.
Ongoing Technological Innovations
Ongoing innovations in the auto industry also contribute to some extent to the aftermarket auto parts industry. Drivers of older models sometimes seek upgrades. Customers may modify their vehicles to take advantage of popular new features, trends, or technologies.
Additionally, the development of exciting new digital communications systems and hybrid electric and diesel automotive systems spurs the demand for certain auto parts. Many companies serve niche markets by replacing or upgrading components for specific auto systems. While projections vary, the current aftermarket auto parts industry in the United States alone generates an estimated $290 billion to $296 billion annually.
Meeting The Demand For Highly Trained Auto Technicians
One problem facing this industry during 2021 involves meeting the demand for skilled (as opposed to unskilled) labor. For example, fixing some specialized high-tech automotive systems challenges most DIY repairers. Highly trained certified automotive technicians remain in demand.
The ability to provide services using aftermarket auto parts involves complexity. Some sources estimate the USA will need an additional 46,000 auto technicians by 2026.
High Demand For Aftermarket Auto Parts
The global aftermarket auto parts industry appears poised to enjoy another lucrative year during 2021. Many factors contribute to this situation, including the fact more people around the world will drive aging vehicles this year. Older cars and trucks usually require some replacement components and repairs. Additionally, the development of new, innovative automotive technologies continues to create ongoing demands for upgrades for older vehicles. Companies will likely discover a variety of exciting opportunities in this industry during the coming months.