Global Automotive Aftermarket Trends for 2024

Introduction

The automotive aftermarket industry, which includes parts, accessories, and services, is experiencing significant growth. This surge is driven by advancements in technology, the increasing age of vehicles, and evolving consumer preferences. For businesses in this sector, understanding the latest trends and market dynamics is crucial to staying competitive and seizing new opportunities.

Key Trends in Automotive Aftermarket

Top-selling product groups in the auto spare parts and accessories category span a diverse range of products essential for vehicle maintenance and enhancement. These include brake pads and rotors, which are critical for vehicle safety and performance; Air filters and oil filters are also in high demand, ensuring the engine runs smoothly and efficiently; Spark plugs and batteries are frequently replaced items that keep vehicles running reliably; Suspension components, such as shock absorbers and struts, are crucial for ride comfort and handling; Other popular subcategories include windshield wipers, lighting components like bulbs and LED lights, and exterior accessories such as car covers and roof racks.

These popular categories reflect the ongoing need for both routine maintenance and customization fueling sizeable growth in the automotive aftermarket. Beyond these, noteworthy trends that are driving opportunities in this industry include:

1. Digital Transformation and E-commerce

The automotive aftermarket is increasingly moving online. E-commerce platforms have become essential channels for parts and accessories sales. Consumers prefer online marketplaces for the convenience of comparing products, reading reviews, and finding competitive prices. The global automotive aftermarket e-commerce market is expected to reach $200 billion by 2027, growing at a CAGR of 14% from 2023 to 2027.

2. Advanced Driver Assistance Systems (ADAS)

The rise of ADAS in vehicles is boosting the demand for related aftermarket parts. As these systems become more common in both new and used vehicles, there’s a growing need for repairs, replacements, and upgrades. The ADAS aftermarket is projected to grow at a CAGR of 11% from 2023 to 2028.

3. Electrification of Vehicles

The increase in electric vehicles (EVs) is transforming the aftermarket landscape. EV-specific components like batteries, charging infrastructure, and power electronics are creating new opportunities for suppliers. The global EV aftermarket is expected to grow significantly, reaching $100 billion by 2028.

4. Sustainability and Green Parts

Sustainability is now a key focus, with consumers and businesses seeking eco-friendly and recycled parts. The market for green automotive parts, including recycled materials and remanufactured components, is expanding rapidly due to regulatory pressures and consumer demand for sustainable options. This segment is forecasted to grow at a CAGR of 10% over the next five years.

5. DIY and DIFM (Do It For Me) Trends

There’s a noticeable shift towards DIY and DIFM trends in the aftermarket. Some consumers prefer to handle their own vehicle repairs and upgrades, while others seek professional services. This balance is shaping the types of products and services offered in the aftermarket.

Market Dynamics and Industry Size

The automotive aftermarket industry is vital to the overall automotive ecosystem, significantly impacting vehicle longevity and performance. Key metrics to understand its importance in the B2B context include:

• Percentage of Vehicle Maintenance Cost: Aftermarket parts and services typically constitute 60% to 70% of the total vehicle maintenance cost, influencing consumer spending and service choices.
• Value Addition: Aftermarket parts add significant value by enhancing vehicle performance, safety, and aesthetics. For instance:
• Performance: Upgraded parts like turbochargers and exhaust systems boost vehicle performance.
• Safety: High-quality brake pads and ADAS components enhance vehicle safety.
• Aesthetics: Custom wheels and body kits improve vehicle appearance. Depending on the type of upgrade, these enhancements can command a premium of 15% to 30% over standard parts.
• Market Size: The global automotive aftermarket is projected to grow from $400 billion in 2023 to $550 billion by 2028, driven by increasing vehicle age, technological advancements, and the rise of e-commerce.

Industry Hubs and Clusters

The automotive aftermarket is supported by several industry hubs and clusters worldwide, known for their concentration of automotive manufacturing and services. These hubs leverage local expertise, infrastructure, and logistics capabilities. Notable hubs include:

• North America: The Midwest, particularly Michigan, is a significant hub due to its long history of automotive manufacturing.
• Europe: Germany and surrounding regions are key players, driven by high-quality engineering and production facilities.
• Asia-Pacific: China, Japan, and South Korea are major hubs, supported by advanced manufacturing technologies and large domestic markets.

Market Insights

Note: The data for Trade Data (Value Traded) are from UN Comtrade Database and World Bank International Trade Data. The data for Consumer Price Index (CPI) are from U.S. Bureau of Labor Statistics (BLS) – CPI and Eurostat – HICP (Harmonised Index of Consumer Prices). The fata for Household Income Data are from U.S. Census Bureau – Current Population Survey (CPS) and OECD – Household Income Data.

High-Growth Markets in the Automotive Aftermarket

Among the largest automotive aftermarket markets, India is showing remarkable growth. This surge is driven by the country’s expanding middle class, increasing vehicle ownership, and a growing demand for vehicle maintenance and aftermarket parts. From 2023 to 2027, India’s market is projected to grow from $20 billion to $24 billion, highlighting a robust annual growth trajectory.

China continues to be a powerhouse in the automotive aftermarket, maintaining its position as the second-largest market globally. The country’s growth is bolstered by its massive vehicle population, rising disposable incomes, and a shift towards more sophisticated vehicle technologies and services.

In comparison, Germany and Japan are experiencing steadier, moderate growth rates, reflective of their mature markets. These countries have high vehicle penetration and well-established aftermarket sectors. Their markets continue to expand due to ongoing technological advancements and a strong focus on vehicle performance and safety enhancements.

Largest Automotive Aftermarket Markets

India

India stands out with the highest projected growth rate in the automotive aftermarket. This rapid increase is fueled by several factors:

• Expanding Middle Class: More disposable income is leading to higher vehicle ownership.
• Rising Vehicle Ownership: An increase in the number of vehicles on the road means more demand for maintenance and parts.
• Growing Aftermarket Demand: Consumers are increasingly investing in aftermarket parts and services.

China

China remains a significant player in the global automotive aftermarket:

• Massive Vehicle Population: With millions of vehicles on the road, the demand for parts and services is immense.
• Increasing Disposable Income: More consumers can afford vehicle maintenance and upgrades.
• Technological Advancements: The market is evolving with more advanced vehicle technologies and services.

Germany and Japan:

These mature markets are experiencing steady growth:

• High Vehicle Penetration: Nearly every household owns a vehicle, maintaining consistent demand.
• Established Aftermarket Sectors: Long-standing industries with a reputation for quality and innovation.
• Focus on Performance and Safety: Continuous advancements in vehicle performance and safety drive market growth.

Largest Manufacturing Hubs (Region and Country)

Note: The data for Trade Data (Value Traded) are from UN Comtrade Database and World Bank International Trade Data. The data for Consumer Price Index (CPI) are from U.S. Bureau of Labor Statistics (BLS) – CPI and Eurostat – HICP (Harmonised Index of Consumer Prices). The fata for Household Income Data are from U.S. Census Bureau – Current Population Survey (CPS) and OECD – Household Income Data.

Automotive Aftermarket Manufacturing Hubs

The automotive aftermarket industry is characterized by several key regional hubs, each with its own unique strengths and advantages. China, for instance, stands out as the largest producer of automotive parts, commanding a substantial 34% share of the global market. This dominance is driven by China’s vast manufacturing capabilities and cost-effective production processes. The USA follows closely with 28.8%, leveraging its advanced manufacturing facilities and a strong focus on innovation to maintain its position as a major hub in the industry.

Germany and Japan are also significant players, with 11% and 10% of the market, respectively. Germany is renowned for its high-quality engineering and manufacturing prowess, making it a leader in the production of precision automotive parts. Japan, on the other hand, is known for its technological advancements and continuous innovation, contributing to its strong presence in the global market.

Other notable hubs include Italy, with 6% of the market, celebrated for its exceptional automotive design and manufacturing expertise. South Korea, holding 5%, excels in the electronics and automotive parts sectors, reflecting its technological strengths. Mexico is an emerging hub with a 3.5% share, recognized for its cost-effective manufacturing capabilities that attract global automotive companies.

France, India, and the UK round out the list with 2.5%, 2%, and 2% of the market, respectively. France is strong in luxury automotive parts, reflecting its heritage of high-end manufacturing. India is an emerging market with increasing production capacity, positioning itself as a future key player in the industry. The UK is known for its high-quality automotive engineering, continuing to contribute significantly to the global automotive parts market.

These regional advantages and country-specific strengths highlight the diverse and dynamic nature of the automotive aftermarket industry, offering various opportunities for businesses to leverage local expertise and resources.

Conclusion

The automotive aftermarket industry is undergoing significant transformations, driven by sustainability, technology, and changing consumer preferences. For U.S. SMBs in the aftermarket sector, leveraging these trends can significantly enhance their competitiveness and value proposition. One compelling strategy is to join a global marketplace like Alibaba.com.

On Alibaba.com, businesses can reach a vast international customer base, expanding their market beyond domestic borders. This platform is particularly advantageous for the automotive aftermarket, where customization and specific requirements are often crucial. Unlike standard e-commerce platforms, Alibaba.com facilitates detailed interactions between sellers and buyers, allowing for in-depth discussions about parts, specifications, and use-case requirements. This ensures that aftermarket solutions meet precise client needs, making it an ideal channel for businesses offering bespoke automotive parts and services.

Moreover, Alibaba.com provides various B2B tools and support, including marketing resources, analytics, and customer service, which can help businesses optimize their listings and enhance their global reach. By participating in a global marketplace, U.S. SMBs can not only increase their market presence but also stay ahead of industry trends and innovations, driving growth and sustainability in the competitive automotive aftermarket sector.

References:

1. UN Comtrade Database (comtrade.un.org)
2. World Bank International Trade Data (databank.worldbank.org/source/international-trade)
3. U.S. Bureau of Labor Statistics (BLS) – CPI (www.bls.gov/cpi)
4. Eurostat – HICP (Harmonised Index of Consumer Prices) (ec.europa.eu/eurostat/web/hicp)
5. U.S. Census Bureau – Current Population Survey (CPS): (www.census.gov/programs-surveys/cps.html)
6. OECD – Household Income Data (data.oecd.org/household.htm)
7. Statista – Automotive Aftermarket E-commerce Market Size (www.statista.com)
8. McKinsey – Future of Automotive Aftermarket (www.mckinsey.com)
9. Allied Market Research – ADAS Aftermarket Growth (www.alliedmarketresearch.com)
10. BloombergNEF – Electric Vehicle Aftermarket Trends (www.bloomberg.com)
11. Research and Markets – Green Automotive Parts Market (www.researchandmarkets.com)
12. Auto Care Association – DIY and DIFM Trends in Automotive Aftermarket (www.autocare.org)
13. IHS Markit – Vehicle Maintenance Cost Analysis (www.ihsmarkit.com)
14. Frost & Sullivan – Automotive Aftermarket Value Addition (www.frost.com)
15. MarketsandMarkets – Global Automotive Aftermarket Forecast (www.marketsandmarkets.com)
16. IMARC Group – Auto Parts Manufacturing Market Size (www.imarcgroup.com)
17. Expert Market Research – Auto Parts Manufacturing Market Analysis (www.expertmarketresearch.com)
18. Vantage Market Research – Auto Parts Market Insights (www.vantagemarketresearch.com)