According to McKinsey & Company, the automotive aftermarket is undergoing significant changes. From rising technological innovations to a shifting competitive landscape, aftermarket suppliers should take note.
Rising Technological Innovations
Historically, the majority of aftermarket sales have been for wear-and-tear and crash-related parts. However, as cars are now manufactured with enhanced quality and increased safety features, such as advanced sensors, these parts aren’t as in-demand. To still drive growth, it’s important the aftermarket focuses on incorporating digital and data-based features. This includes offering new services, such as:
- Digital software programs, including vehicle tracking
- Additional services, such as theft protection and driver data
By offering a platform to use car-generated data, automotive aftermarket suppliers will be able to differentiate themselves from the competition.
Consumers’ increased use of technology is impacting the aftermarket, too. In particular, digital platforms influence their purchasing decisions, since they can research and buy aftermarket parts directly online. Suppliers will need to ensure a solid online presence to resonate with consumers.
Shifting Competitive Landscape
As the aftermarket matures, McKinsey & Company cites that more consolidation will occur. In Europe, significant consolidation already has occurred, and it is likely the U.S. will follow.
Additionally, OEMs are trying to expand their reach into the aftermarket in order to still service older vehicles. To do this, many OEMs have created their own specific car repair shops or are offering differentiated service offerings to stay competitive and keep consumers loyal to them. Aftermarket suppliers will need to recognize this activity and ensure they have techniques in place to maintain market share.
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