Did you know that Volvo Cars recently announced plans to become a fully electric vehicle company by 2030? As per a recent report by the International Energy Agency, China also witnessed an 80% increase in the sales of electric vehicles between 2021 - 2022.
As we can see, EV technology is making waves around the world with more and more automobile companies adopting circular economy practices. This subversion of changing technological advancements followed by sustainability targets and geopolitical influence will become the onset of an industrial shift, bringing more opportunities for OEMs.
Today, the global automotive aftermarket industry size stands tall at USD 400 billion. According to a recent report by Grand View Research, the sector will see an increase with a CAGR of 3.9% and surpass USD 550 billion within the next 5 years. Spare parts suppliers and service enablers will play a pivotal role in this industrial growth over the years.
In this blog, we will go through this industry forecast to discover 5 key takeaways that channel the focus on automotive aftermarket industry trends taking heap in upcoming years.
This automotive aftermarket forecast is based on worldwide industry data from 2017 to 2023 and provides insights for 2024 – 2031. If you are an OEM seeking to uplift your collaboration with dealers, you can use this information to unleash market opportunities and achieve operational goals using the right set of tools.
Automotive Aftermarket Forecast 2024 – 2031 – Here’s What You Should Know
The aftermarket spectrum lies vast across repair, replacement, and other after-sales services. In this section, you will learn about automotive aftermarket trends that will concisely affect all these aspects in some ways!
Focus on Eco-Friendly Production
Automotive companies are focusing distinctively on reducing the cost of vehicle production and compelling vendors to adopt innovative technologies to optimize operations. Prominent players in this sector have already started to rely on robotics and automation to streamline production processes and reduce emission footprint.
In addition, the disruption of digital technologies in maintenance and auto repair services will start a passage for the booming demand for automotive parts. It will induce an ease of distribution, enabling dealers to find the required parts conveniently.
Influence of Post-COVID Aftermath
The post-pandemic upshot was quite a significant blow for businesses from all sectors including automotive aftermarket. Given the diminished use of vehicles, the demand for replacement and repair parts plummeted on a massive scale. This has not only affected the production and distribution cycles but has changed the spending habits of the end customer for good.
However, these upcoming years will witness the lucrative side of the industry with OEM companies overcoming these setbacks and fostering sustainable ways to streamline operations.
Rising Demand for Replacement Parts
There has been a remarkable surge in the demand for replacement parts in recent years. But 2022 was selectively the year of the tire segment as it brought in 22.5% of the total market revenue that year. As compared to other repair and replacement parts, the requirement for tires along with batteries will continue to grow as per the automotive aftermarket forecast 2024 – 2031.
Apart from this, distribution channels will gain prominence with thriving means of online selling networks. Given the substantial effect of digitization, the wholesale and distribution segment of the automotive aftermarket industry will see the fastest CAGR throughout the forecast span. Though, it is important to remember that some of these changes will widely depend on the adoption of innovative technologies by OEMs.
Expansion of Service Channels (with DIFM)
Original equipment manufacturing still maintains its dominance in the automotive aftermarket industry with a revenue share of 55.9% in 2022. The automotive aftermarket industry forecast of 2024-2031 showcases that DIFM (Do It for Me) is going to play a huge role in boosting sales in the USA and the UK. As per this trend, vehicle owners buy the parts online and go to a workshop for installation.
This trend will not only disrupt the overall aftermarket dynamics but will also create profit opportunities for OEMs. In a nutshell, aftermarket e-commerce will be the pivot of this development in the sales cycle.
5 Takeaways from Automotive Aftermarket Forecast 2024 – 2031
Growing Need for Digitization
In this day and age of raging competitiveness, strategic digitization offers an edge to OEMs and empowers them to gain control of operations. But there is more to digital transformation that can revolutionize the automotive parts domain. As per the automotive aftermarket industry forecast for 2024 - 2031, it is going to be the most powerful force driving transformation on various fronts.
Intellinet Systems offers an array of aftermarket software designed to help OEMs establish a robust market presence and stay ahead of the curve. Our offerings cater to every challenge that comes in the way of smooth operations.
Rise of E-Commerce (B2C and B2B2C) in Aftermarket
Aftermarket e-commerce prevails at USD 69 billion market value with a CAGR of 13.8%. Clearly, the possibilities are seamless for OEMs, dealers, and end customers. However, the escalated need for digital transformation and buyers’ preferences for online purchases will impose a shift in the supply chain management. This dynamic will work in the favor of those who are ready to introduce cutting-edge innovations to their existing service architecture.
Security-Based User Personalization
OEMs will need to establish a digital presence that offers personalization and security for users. Security-based personalization will allow OEMs to obtain the credibility of their dealers and direct them to alleviated navigation where the selection of parts is quick and easy.
User personalization and security are codependent aspects as a role-based setup enables you to control the access of data and maintain security. Bespoke software like Intelli Catalog provides admin authority to OEMs where they can set up authentication measures and make sure that the flow of information is distributed optimally.
Overhead Cost Reduction with Operational Efficiency
A significant focus on overhead cost reduction with the help of improved efficiency has also been the focus of the latest automotive aftermarket industry forecast of 2024 - 2031. Apart from this, the inescapable need for operational efficiency will also take charge to recuperate the impact of post-COVID adversities faced by the entire industry.
If you are seeking ways to optimize your operations and cut down on excess costs, then you can count on our suite of software such as Intelli Catalog, Intelli Warranty, and Intelli Desk. You can utilize these products to minimize errors in parts order processing, incur utmost transparency in the warranty process, and elevate the overall experience.
Data-Driven Decision Making
This forecast report also points to the inescapable need to make decisions based precisely on data-driven insights. Knowing your industry is essential but analyzing users and their behavior is a step ahead of other market players. With a system that can offer real-time analytics, you can not only assess the problems faced by dealers, but also build a strategy to solve these problems and refine the experience effectively.
These key takeaways not only summarize the overall market dynamics but also highlight the benefits of choosing aftermarket software over conventional practices.
Why Trust Intellinet Systems for Automotive Aftermarket Software?
Intellinet Systems is a well-renowned name in the aftermarket landscape and our automotive aftermarket software suite addresses major challenges faced by OEMs. With over 75000 users across 70 nations, we are continuously working in the direction of reducing operational burden for OEMs.
Our products, such as Intelli Catalog and Intelli Warranty, have helped aftermarket businesses save up to 30% of costs by streamlining parts ordering and warranty management. From parts search and order processing to technical support and field-related issues, our extensive suite of aftermarket software solutions is built to assist OEMs at every step of the way.
As one of the leading players in automotive aftermarket software solutions, we are familiar with the diverse needs of manufacturers. Therefore, we ensure to provide a flexible experience that can enhance communication and sales operations. Our products are available in 9 languages with undeterred cross-platform capabilities to help your dealers navigate and explore a broad selection of spare parts.
You can book a free demo to learn more about our products or schedule a call to connect with our experts today!
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