Market Analysis

Automotive Aftermarket Analysis

The ICE segment will capture around USD 789 billion in 2023 and will record a CAGR of 8.1% through 2032. For ICE vehicles, the market remains robust due to the large existing vehicle population and the extensive network of repair shops. However, there is a gradual decline in demand for traditional ICE components such as exhaust systems and fuel injection parts, driven by increased environmental regulations and the rise of BEVs. Maintenance and replacement parts like filters, brakes, and belts continue to sustain the ICE aftermarket.
 

BEVs are gaining significant traction. The growing adoption of electric vehicles, spurred by advancements in technology, government incentives, and increasing consumer awareness of environmental impacts, is reshaping the aftermarket landscape. BEV aftermarket growth is primarily driven by the need for specialized components such as battery packs, electric motors, and charging infrastructure.
 

The B2C segment will capture 87% of automotive aftermarket market share in 2023 and will garner a 9.4% CAGR from 2024 to 2032, owing to the growing adoption of electric vehicles (EVs) and hybrid vehicles worldwide. In the B2C segment, e-commerce is revolutionizing how consumers purchase automotive parts. Online platforms offer convenience, competitive pricing, and a wide range of products, driving significant growth. Consumer preference for DIY (Do It Yourself) repairs is increasing, supported by the availability of online tutorials and resources.
 

Personalization and customer service are key differentiators, with businesses investing in customer experience to build loyalty. D2B is witnessing growth driven by technological advancements and increased demand for high-quality parts. Distributors are focusing on expanding their digital platforms to streamline operations and enhance the supply chain. There is a trend towards forming strategic alliances with manufacturers to ensure a steady supply of parts and leverage economies of scale.
 

The automotive aftermarket from replacement parts segment is experiencing steady growth, driven by the increasing average age of vehicles and rising vehicle ownership worldwide. Consumers are keeping their vehicles longer, leading to higher demand for replacement parts to maintain performance and reliability. The trend toward DIY repairs and the growth of e-commerce platforms also contribute to this segment's expansion.
 

The braking segment is seeing advancements in technology with the introduction of electronic brake systems (EBS) and regenerative braking, especially in electric and hybrid vehicles. Safety regulations and consumer demand for enhanced safety features are driving the development and adoption of advanced braking systems. There's also a notable increase in the use of ceramic brake pads for their durability and performance.
 

The offline channel remains robust due to the need for physical inspections, immediate availability, and the hands-on expertise provided by brick-and-mortar stores and workshops. Traditional auto parts stores, dealerships, and service centers continue to thrive, particularly for complex repairs and maintenance services requiring professional installation. There is a notable trend toward the integration of digital tools within offline stores, such as advanced diagnostic equipment and electronic inventory management systems, enhancing customer service and operational efficiency.
 

Europe automotive aftermarket will expand at 11% CAGR during 2024 to 2032, driven by robust industrialization, technological advancements, and substantial investments in automotive sectors. The Europe market is driven by the increasing new vehicle production coupled with enhanced performance of old vehicles that are still in use.
 

The ongoing technological innovations in the automotive sector will create new opportunities for aftermarket companies to grow globally. The improved fuel economy is likely to increase the average miles driven by the customer. This has led to more wear & tear in vehicle parts, augmenting the demand for automotive aftermarket products.