The global automotive aftermarket has evolved at a rapid pace with traditional business models being disrupted by developments like eRetailing, telematics and service aggregation. The scope for parts and service retailing is huge thanks to the focus on digitization and connectivity. Another factor that has contributed to this shift is the steady growth in worldwide vehicles in operation (VIO), according to a research report published by Frost & Sullivan titled ‘Global Automotive Aftermarket Outlook’.
The study found that there has been significant increase in the penetration of eRetailing in the automotive aftermarket and by the end of this year, the revenue generated by eRetailing is expected to cross USD 21 billion globally.
Commenting on this figure, Anuj Monga, research analyst, Frost & Sullivan Mobility, said that in line with this trend, automotive aftermarket suppliers need to extend the scope of their services and adopt digital innovations in their channels when it comes to all aspects of marketing like sales, services and distribution. In order to retain their edge in the market, they need to invest in research and development (R&D), strategic partnerships, and use advanced technology.
When it comes to emerging economies like India and china, Frost & Sullivan predicts high growth in eRetailing thanks to factors like their favorable economic conditions and expanding VIO. The outlook for the European market is bright due to the evolution of new technologies, new vehicle types, new service channels, an aging VIO, intense competition and merger and acquisition (M&A) activities. Remanufacturing has become popular in Asia Pacific and the United States market is also demonstrating good growth in eCommerce channel revenues.
New business models include business-to-business (B2B) platforms from pure players and direct retailing by suppliers and OEMs. In Mexico too, eRetailing has picked up due to favorable government legislation and smartphone penetration.
“The pace of innovation in vehicle technologies is causing growing complexities in vehicle functionality and a lack of available skill set,” noted Monga She added that in order to cope with the changing scenario and to remain competitive, players in the automotive aftermarket need to invest in innovative equipment, training methods and assistive technologies.
Manju Mathew, an MBA in marketing, completed publisher training courses from the Oxford Brookes University and New York University. She started with marketing and PR roles before moving on to her current position as a full time writer. Currently living in Dubai, her life as an expat has sharpened her observation skills and flair for writing. She enjoys writing about luxury cars like Ferrari, Lamborghini, etc even if she can only dream of owning them.
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