What is the automotive aftermarket industry? This industry is a way for car owners to get more from their vehicles and to achieve upgrades and increased performance even after the sale is complete. Customers understandably do not want to have to purchase a new vehicle whenever they seek an upgrade, and the auto aftermarket means that they don't have to.
Auto body parts and other components can be purchased and fitted to vehicles, providing customers with exactly the kind of capability they need without the additional expense or inconvenience. However, this does necessitate some prior knowledge from the consumer — consumers do need to know what to look for when buying aftermarket automotive body parts.
While the auto aftermarket does offer significant potential for consumers looking to develop their cars and for brands seeking to expand the lifetime value of customers, there are dangers involved:
These dangers will need to be monitored carefully as the market grows.
Let's take a look at some of the automotive aftermarket trends that are going to be driving this industry through 2021 and far beyond:
In 2018, it was announced that the US automotive aftermarket had hit $215.32 billion in worth, with this expected to grow to $288.20 billion by 2028. This would mean a compound annual growth rate of 3.7% by the same year. Other research suggests that the global market will have exceeded $1,000 billion by 2027, with a growth rate of 4.4% between 2020 and 2027.
This paints a picture of a market in very good health indeed. It also demonstrates an engaged consumer base that is well aware of the benefits this market offers.
Sales of light trucks are growing, and it is estimated that 69% of all new vehicle sales will be light truck vehicles by 2025. This represents a growth of 10% in new vehicle sales in the late truck market between 2019 and 2025.
Manufacturers are supporting this growth with a range of different add-on components and trim levels. Due to the commercial and industrial applications of light trucks — as well as their potential as family vehicles — there is a great scope for upgrades on this kind of vehicle. We could see light trucks driving the growth of the automotive aftermarket.
COVID-19 hit the automotive industry hard, resulting in revenue decreases and job losses right across the board. While this is a picture we have seen reflected across many different industries and sectors, it is a little different in the automotive industry.
It appears that this industry is recovering faster than most. The SEMA Industry Indicators Report found that almost 80% of the jobs lost in the industry in 2020 had been recovered by December of the same year. Moving forwards into 2021, we can see that aftermarket sales are helping to drive this recovery, experiencing growth of 18% between January and the end of May. This indicates a bright future for the market.
Components such as onboard computers and smart navigation and connectivity equipment are pushing the boundaries of what is possible. Increasingly consumers are finding themselves able to add a range of high-tech solutions to their vehicles.
This trend is likely to continue as high-tech equipment becomes ever more affordable and accessible. However, this increase in the sophistication of aftermarket components can cause its own problems.
While it's good news that aftermarket parts are becoming more sophisticated and that the market is growing in value, this also raises a few red flags. With ever-larger amounts of money changing hands and with components growing in capability, both brands and consumers need to be better protected.
One answer to this is the digitization of the automotive aftermarket industry, as well as the introduction of digital methods of protecting manufacturers and buyers. We can expect to see this becoming a significant trend as we move forwards through 2021 and beyond.
How can we protect brands and customers in this evolving marketplace? A digital approach can help to achieve a secure future for manufacturers and consumers alike.
Customers need to know what to look for when they are buying aftermarket automotive body parts and other components. They need to be equipped with all of the information and support they need to make the right choice.
Today's increasingly digital landscape makes this possible. Support can be provided in real-time via live chat and across other channels, while knowledge resources make it easy for customers to gain the understanding they need.
Counterfeiting is something that both component manufacturers and customers need to be aware of. These fake products erode the profits of brands and could put consumers in severe danger. A policy of registering these automotive aftermarket parts via a digital platform can reduce this risk.
The engage™ platform is designed to facilitate this. Companies can log serial numbers, barcodes, and other identifying data on the platform. This can be freely accessed, putting the power back in the hands of reputable brands and their consumers.
Smartphones have become almost ubiquitous right across the world. Not only this, but the technology these devices put at the fingertips of the average user is formidable. Swift data processing, scanning and picture taking up to a high quality, and real-time connectivity with remote networks — all of this is possible with modern devices.
We designed the engage™ app with this kind of functionality in mind. The application allows customers to quickly scan and recognize genuine products, making it harder for fraudulent items to gain traction in the market.
While different brands are certainly competitors, they are all united by one aspect — they all believe in a fair playing field, free from counterfeits. Digital technology makes this possible, as information regarding counterfeit products can be accessed and shared in real-time so that all players in the industry have the insight they require.
This is crucial to achieving the kind of unified response necessary when it comes to fighting fraudsters. Different brands need to come together to ensure a fair and positive market in which the rights of the consumer are protected.