How the Automotive Parts Chain Might Change in the 2020s

The automotive aftermarket is changing. Soon, the market will look very different to the one we know now. But the future is bright, and change always brings new opportunity.

In terms of sales, the aftermarket parts market is predicted to grow from its current EUR 398 billion to EUR 566 billion by 2025. And if more parts are being sold, it follows that there must be more business to be had for workshops like yours. But what kind of business? And how can your workshop take advantage of it?

One thing we all need to be aware of is that the parts market will be significantly affected by the oncoming shifts in automotive technology. As autonomous cars take an ever-greater share of the automotive market, the number of “traditional” car parts bought and fitted will decrease. According to analysts McKinsey:

Another significant shift is taking place regarding vehicle ownership. Not only is car technology changing, so is the way vehicles are used. The personal ownership of a vehicle, once felt to be an essential status symbol for the modern adult, is in decline. In its place we are seeing the rise of the fleet vehicle operator. According to McKinsey:

So, an awareness that fleet vehicles will form a bigger slice of the aftermarket pie is important for workshops since there will be more opportunities to win contracts for regular work on a fleet of vehicles.

The continual rise of digital platforms as tools of the aftermarket will also have ever-greater impact. Until recently, online sales of aftermarket parts have been mostly targeted (via a distribution channel) at workshops, enthusiasts, and those relatively few people who can perform maintenance on their vehicles beyond topping up the oil and water. However, many automotive companies and suppliers are now establishing their own online stores with the aim of selling directly to end users and businesses. For example, BMW has already set up online shops across digital marketplaces such as eBay, and others are following. A recent Frost and Sullivan study, “The Future of Parts and Service Retailing in the Automotive Aftermarket,” states,

Here’s a good example of how digital platforms are influencing the aftermarket: A US-based business called OpenBay recently launched an app that will detect vehicle maintenance issues. The software interacts with a plug-in device that the driver connects to the vehicle and the app automatically sends out repair quotes to the driver from local auto workshops.

These ‘service aggregators’, who also include RepairPal in the US and WhoCanFixMyCar in the UK, work in the same way as Expedia or TripAdvisor. The software digitally connects consumers with appropriate service providers on the basis of location, suitability and cost. In the future, these apps will be capable of diagnosing many vehicle faults remotely. A driver will no longer have to call in at the workshop to get the car checked over; instead, there will be software at the workshop that will talk to the car and then, if necessary, send out to the driver prices and a list of available timeslots for work to be carried out. It is also predicted that car companies will set up online market places for ‘click-n-fit parts’, offering drivers not just the new part but also the service of a mobile van that will come to the driver’s home and fit it.

The next five years will indeed be an exciting era for the aftermarket. It’s a great time for workshops to get ahead of the game and be prepared to serve the needs of the aftermarket of the future. Make sure you start to prepare your business for the future now!