The situation of the European automotive aftermarket.
Europe’s total volume for the aftermarket passenger car components is around 115 billion Euros at the moment while at the same time the individual markets are diverging strongly.
This means that the aftermarkets in Western-Europe, which are characterized by a high competitive density in parts trade and an oversupply in auto repair shops, will increasingly be facing pressure. This tendency will be more or less strongly pronounced – depending on the respective product group. Classic wear parts ranges will be particularly affected by this. Improved quality, decreasing mileage and increasing vehicle costs of ownership will lead to a drop in sales in spite of growing car park. Still, because of their higher prices, these new high-tech products will effect a small growth rate in terms of value for the whole aftermarket volume. This upward trend will be around 1 or 2 percent for new parts and shall also apply to the market for remanufactured parts.
In contrast to this, the Eastern European markets, particularly Russia, Ukraine, Poland and Romania, will increase significantly in long term.
Especially Russia and Ukraine, which still today have more or less no garage concept chains at all, have considerable growth reserves. These reserves are not least due to the growing car park. The car manufacturers’ trade and service partners will gain more importance caused by building up of their networks.
The countries in Southern Europe, for which Italy and Spain are mentioned exemplary, are facing a major challenge due to the financial and euro crisis.
Apart from the changes that are effected by these exogenous factors, the countries in Southern Europe will also have to cope with structural changes. With their numerous small local garages and small and medium-sized parts wholesalers, the market participants will be facing an enormous price and margin pressure.
In order to lessen this pressure, the slogan for the future has to be:
- direct delivering (just in time) for auto repair shops via wholesalers without intermediary trade stages or in cooperation with local wholesalers for local logistics in rural areas
- integration of small local wholesalers in cooperatives / concepts with central control and monitoring
What the wolk after sales experts observed while performing their researches in all European markets was that the majority of aftermarket participants are acting too passive at the point of sale rather than providing more proactive impulses especially in the use of market opportunities for the sale of services by the auto repair shops.
The consequences are neglected growth potentials that amount to a value of approximately plus 25 percent.
The aftermarket is still a long way from being exhausted.
More information abou the market research “Car Aftermarket Europe Report“