Aftermarket June 2022

T he global automotive aftermarket is expected to grow significantly between now and 2027, favored by upcoming government plans toward EV adoption. During 2020, the lockdown restrictions imposed due to the COVID-19 pandemic hit the automotive spare parts industry hard. Garages across the world found it difficult to source replacement spare parts during 2020. As travel restrictions are relaxed worldwide, vehicle owners are now able to undertake long trips. Vehicles that stood idle for long periods during the last two years developed problems. As a result, the number of complaints registered at garages surged exponentially during 202 and into this year, leading to the growth of the global automotive aftermarket. These are some of the regional trends that are expected to power the industry: 1: Car service centers across India struggle to keep up with soaring replacement parts demand India’s automotive aftermarket share is slated to rise notably through to 2027, as car owners have queued up at car service centres to get spare parts for their vehicles. Kerala’s Thiruvananthapuram district alone has nearly 4,000 service centres, among multiple other small and medium- sized workshops. Indian car service centres have been struggling to manage heavy workload since 2021, with unavailability continuing to hamper sales volume. Spare parts are not available due to COVID-led supply chain disruptions, production intervals, and soaring demand. Rising courier charges as well as fuel price hikes are affecting the overall costs of automotive aftermarket spare parts. Over the next few months, as manufacturers are focused on meeting the spiraling product demand, long waiting times will be eliminated. Dealing with product shortage issues will ensure substantial increase in revenue for workshop owners, car service stations, and repair centres. 2: South Africa unpacks the potential of automotive retail South Africa’s automotive retail market is ready for a major transformation with the growing availability of EVs. According to the South African Electric Vehicle Buyer’s survey conducted by George Mieni in partnership with Generation.e recently, a large percentage of South Africans showed strong inclination toward electric vehicle adoption. Close to 68% of the participants said that they want to own an electric vehicle within the next three to five years. The used car market in South Africa will generate considerable profits as these aging vehicles need more frequent part replacements. South Africans are more likely to invest in personal mobility rather than shared mobility, despite the drop in car sales during the pandemic. With the 14 AFTERMARKET JUNE 2022 BUSINESS www.aftermarketonline.net GLOBAL AFTERMARKET: TOP REGIONS FOR NEXT FIVE YEARS Three global regions are likely to emerge as key revenue hubs for the automotive aftermarket by 2027 government, car dealers, and customers working together to redefine the future of mobility, growing EV penetration will fuel South Africa automotive aftermarket forecast through 2027. 3: France earmarks fresh investments toward EV adoption In October 2021, French President Emmanuel Macron announced a € 30 billion investment plan aimed at nationwide economic modernization. The plan includes deployment of two million electric and hybrid vehicles that will be manufactured by 2030. The presence of three battery giga-factories in the nation is also seen as a major growth enabler for the French EV industry. Revealing France’s plans during its six-month presidency of the EU in 2022, the Finance Minister of France announced that the government will allocate € 8 billion toward a joint EU project involving EV batteries, hydrogen, and the semiconductor industry. The new EV battery technologies are expected to compete with the technological prowess of the United States and China, strengthening France’s automotive aftermarket outlook. An increasing number of partnerships are making a move toward a collaborative global competitive landscape. In February 2022, NAPA Auto Parts announced that it will establish strategic alliances with three new partners for creating a strong branding strategy. Similarly, in January 2022, Zypp Electric, a top EV logistics company in India, joined hands with Mechanifyspares, the first Indian online platform selling spare parts and components for EVs. The partnership aims to procure and cater to the repair demands of 5,000-plus EVs across the subcontinent. BY Vinisha Joshi, Content Team Lead, Global Market Insights