Gas for Thought: Prime 5 World Automotive Aftermarket Tendencies


Automotive Month-to-month E-newsletter &


It is fall once more, which solely means one factor…consideration is turned
to the aftermarket! S&P World Mobility participated in two
occasions just lately—Automechanika Frankfurt, a five-day occasion on
the Frankfurt exhibition grounds in September, self-heralded because the
world’s main commerce truthful for the automotive service business, and
AAPEX in Las Vegas on 1-3 November, with whole customer numbers
anticipated to be over 160,000 for AAPEX and SEMA mixed.

On the opening day of AAPEX, our resident knowledgeable Todd Campau
introduced our insights into the rising top-five aftermarket
traits we will see inside the automotive business.

Prime-five aftermarket traits

  1. Vehicles getting older, aftermarket stakeholders stay
    cool about it.

    Augmented by the shortage of latest automobile provide, as effectively the issues over
    financial stability and the constrained new automobile provide, autos are
    being saved longer and subsequently the charges of automobile parc scrappage are
    falling. With these traditionally low ranges of scrappage, even with
    the softer new automobile gross sales, the pattern is displaying that the autos in
    operation (VIO) are persevering with to rise. The executives we
    interviewed at each reveals didn’t appear too involved about this as
    the impact is not going to be perceived earlier than 5 or 6 years.
    In the meantime, for his or her cousins within the aftersales phase, which
    usually rely on the 1-4-year-old phase autos, the suggestions
    we gathered was fairly the other.

    The getting older fleet, with autos being retained longer, the typical
    age has now risen from simply over 11 years in 2012 to 12.2 years in
    2022. Essentially the most vital progress sector of the fleet is among the many
    6-13-year-old autos, a cohort that was already poised for
    vital progress in quantity previous to the present financial local weather,
    and is displaying essentially the most annual miles traveled, marking it an
    aftermarket candy spot. These more-traveled autos could also be on
    their second or third proprietor and prone to already be a first-rate
    aftermarket buyer.

  2. Mileage has returned however is totally different
    Annual miles traveled has returned and even exceeded prior pandemic
    totals, however the composition of the miles traveled have modified as
    we now have emerged from the pandemic. Insights derived from congestion
    knowledge have indicated that rush hours haven’t returned to
    pre-pandemic ranges in all locales, whereas in lots of locales
    congestion all through the day has displayed a slight uptick as
    drivers are spreading journeys all through the day.

    The aggregated impact of the altering automobile miles traveled is
    anticipated so as to add about 1 share level to the general VMT for
    2022, growing to three.5 trillion miles for passenger vehicles and lightweight
    vehicles, which is able to fall inside the vary of typical year-on-year
    VMT change previous to the pandemic. That mentioned, the regional change is
    anticipated to fluctuate drastically yr on yr, starting from a 1.2% decline
    in Mississippi to a 5.4% improve in New York. Likewise, demand for
    aftermarket upkeep and restore alternatives primarily based on miles
    traveled is predicted to see diverse progress from area to

  3. Digitization of the workshop as connectivity

    With automobile connectivity now enabled with longer serviceable
    connections, we anticipate that one-third of the VIO can be linked
    by 2024 and 5G connectivity would be the dominate service for brand new
    autos in 2027. By the top of the last decade, it’s anticipated that
    over one-third of the VIO can be linked, and 95% of them will
    be able to receiving manufacturer-driven software program with
    over-the-air (OTA) updates.

    From Automechanika, and the dialog with diagnostic suppliers,
    OTA updates have been anticipated to result in fewer guarantee visits and
    might scale back income alternatives for OEMs. Focus has been on
    efficiently growing relationships with OEMs and securing entry
    to their safe gateways to allow the aftermarket’s capability to
    full all repairs. This has given many suppliers the flexibility to
    provide this degree of connectivity on a subscription or
    pay-per-repair foundation and likewise provide technical restore options and

  4. Autonomy alternatives
    Elevated adoption of automated driver help techniques
    (ADAS) will proceed to penetrate the automobile fleet at tempo. As an
    instance, in 2022, greater than 60% of latest fashions have adaptive cruise
    management in contrast with about 15% simply 5 years in the past. As a share of
    VIO, the importance of autos enabled with adaptive cruise
    management has risen from 0% in 2015 to 12% in 2022.

    To the physique restore business, because the know-how continues to
    penetrate the VIO, it might affect the charges of collision and
    the elevated adoption of beauty and sensible restore service

    The principle alternatives that have been introduced at AAPEX and
    Automechanika have been that ADAS techniques are a focus as they have been
    susceptible to the results from poor roads circumstances and wheel
    impacts. The significance of ADAS gives a chance to service
    choices round calibration and security checks, in addition to the
    related want to make sure that wheel alignment was checked and
    adjusted to make sure all ADAS techniques remained operational and protected.
    These companies provided a major income and upsell

  5. Transition to electrification
    With VIO of 1.4 million electrical autos (EVs) within the US
    at the moment, a conservative estimate places that whole to be near
    17 million VIO by 2030 as new fashions will improve from 26 in 2021
    to greater than 250 in 2030. Conservative and aggressive outlooks lead
    to general share of the automobile fleet of lower than 15% in
    2030—whilst EVs present vital progress in new registrations,
    transformation of the fleet will take years.

    Extra states within the US are proposing rules to limit new
    registrations to both zero- or low-emission autos, and related
    traits are following in Europe, which is creating extra
    influencing components as to why we now have seen prospects selecting to
    undertake EVs sooner. Nonetheless, latest surveys present continued reticence
    in shopper acceptance. In 2021, 81% of these surveyed would have
    thought of buying a battery-electric automobile (BEV); nonetheless, in
    2022, solely 58% shared that view. The rationale for this alteration appears
    to be skepticism towards EV know-how, pricing, charging
    infrastructure, and battery know-how being obstacles. Pragmatism
    is strongly inspired in growing and implementing an EV
    technique as a result of whereas the transition will take time, preparation
    can be key to a profitable future.

    Of the brand new automobile registrations in 2022 within the US, the sunshine truck
    sector dominated the electrical phase, representing 60% of all EVs

    Though there can be challenges, the way forward for the aftermarket
    nonetheless presents an getting older automobile parc with elevated restore
    alternatives. This getting older is prone to proceed because the financial
    influences have a harmful impact on new automobile gross sales whereas the
    constraints on new automobile provide are prone to proceed via 2024.
    Though BEV progress is nice, the proportion towards whole VIO
    signifies there may be nonetheless warning, with many ready to achieve
    confidence within the know-how and infrastructure earlier than switching to
    absolutely electrical.


Dive Deeper — Take a look at our automotive

Obtain Presentation: 5 Automotive
Tendencies Impacting the North America Aftermarket

Webinar Replay: Digitization of the
automotive aftermarket via connectivity

Learn the Weblog: Common age of
autos within the US will increase to 12.2 years, in accordance with S&P
World Mobility

Report Obtainable: Evaluation of
automobile miles traveled traits within the US and the impression on the

Subscribe to

Prime 5 Substitute Elements for
Business Autos. Be taught extra

This text was revealed by S&P World Mobility and never by S&P World Rankings, which is a individually managed division of S&P World.


Please enter your comment!
Please enter your name here