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Unveiling Asia Pacific automotive aftermarket trends in terms of the geographical spectrum: India and Vietnam to emerge as bright spots on the industry growth map by 2024

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Owing to a drastic rise in the demand for state-of-the-art and highly-efficient automotive spare parts, the Asia Pacific (APAC) automotive aftermarket share has been registering commendable progress in the last few years. The eventual wear and tear of existing vehicles is invariably leading car owners to replace the car’s internal components and old spare parts for improved safety and enhancement of the vehicle’s appearance. Moreover, the transformational shifts in global mobility policies across various emerging economies in the region is positively favoring the APAC automotive aftermarket, which is slated to garner more than USD 165 billion in terms of remuneration by the year 2024.

China LCV Aftermarket Market, By Sales Outlet, 2017 & 2024, (USD Million)

China LCV Aftermarket Market, By Sales Outlet, 2017 & 2024, (USD Million)

Amidst a gradual slowdown in the global economic activity in the recent times, the developing countries in the Asia Pacific terrain are experiencing unprecedented growth. This has facilitated the expansion of the automotive aftermarket across major Asian nations such as China, India, Japan, Singapore, along with smaller economies like Vietnam and Thailand catching up fast enough.

India

The most prominent factor that has been favoring the India automotive aftermarket is the rapidly growing trend of vehicle ownership in rural and semi-urban regions of the country. The statistics published by the Society of Indian Automobile Manufacturers (SIAM) – is the premier organization representing the nation’s automotive industry – are testament to the humongous rise in the sales of passenger and commercial vehicles over the last few years. Recording a y-o-y growth rate of 14.78 percent, the increase in automotive sales has boosted the demand for auto spare parts and other ancillary components across the country, which has, in turn, proved highly-beneficial for the India automotive aftermarket.

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Speaking along similar lines, the growing adoption of vehicle insurance policies in the nation would further propel the India automotive aftermarket expansion. It is quite prudent to mention that the third-party insurance cover for new cars has been made mandatory for period of three years following a Supreme Court order effective from September 2018.

Vietnam

Following the footsteps of major developing economies of the region like India and China, Vietnam is making ground-breaking progress in the APAC automotive aftermarket in the recent years owing to marked uptick in automobile sales and rise in the disposable income of its residents. As per the Industrial Policies Strategies Institute (IPSI) under the Ministry of Trade and Industry, the automobiles production in the nation is expected to increase at an average of 18.5 percent each year over 2018 to 2025, essentially boosting the APAC automotive aftermarket.

In line with Vietnam’s ambitious strategy to carve out a profitable growth path for the nation’s automobile industry, the formation of an auto manufacturing center in the vital central economic region is being visualized presently. The proposed Kim Long Motors Hue complex is slated to be set up in the Chan May-Lang Co Economic Zone to not only utilize the port and logistical advantage of the province but also to attract more investors to the local mechanical and spare parts industries in the times to come.

Industry analysts believe that the new auto manufacturing complex and the increasing automobile sales would open up unprecedented opportunities for the major firms operating in the APAC automotive aftermarket and position Vietnam as a significant contributor toward the burgeoning automotive industry in the region. In fact, according to a research report put together by Global Market Insights, Inc., Vietnam automotive aftermarket is forecast to expand at an annual growth rate of more than 9 percent over the estimated time frame.

With the dynamically surging demand for advanced modifications in cars in economies such as India, China, and Japan, the commercialization potential of the Asia Pacific automotive aftermarket industry is anticipated to surge majorly over 2018-2024. Powered by the ever-increasing requirement of advanced replacement parts and the dynamic expansion of the regional automotive market, the APAC automotive aftermarket industry is slated to traverse alongside a highly profitable growth path in the years ahead.

Author NameSaif Ali Bepari

Burgeoning demand for vehicle repair services in APAC to promote authorized car service center market expansion over 2019-2025

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Surging passenger vehicle demand and consistent regulatory efforts to facilitate progress in the auto industry will fuel authorized car service center market trends. Major investments by auto manufacturers to broaden their manufacturing scope are driving demand for car servicing facilities.

Global authorized car service center industry from the organized multi-brand service provider workshop segment is expected to grow at the fastest pace over the predicted timeline given the superior vehicle repair services for myriad auto brands offered by key industry players at economical price points.

Major multi-brand service companies such as Mahindra, Bosch, TVS Automobile Solutions and more are shifting focus towards expanding their service departments and offering lucrative servicing packages to car fleet operators.

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To cite an example, Bosch inaugurated their new CoCo Bosch car service outlet in Bengaluru, in January 2017, equipped with top of the line servicing equipment including tire changers, nitrogen tire inflators, headlight aligners and wheel aligners, all designed to cater to a vast array of vehicle brands.

According to estimates from authentic reports, the global authorized car service center market size is projected to surpass $300 billion by 2025.

Owing to the robust demand for car repairs associated with scratches and dents in the current scenario, the car body services application segment is set to take a leading position in the overall authorized car service center industry share.

The engine service sector, on the other hand, is anticipated to account for more than 12% of the overall industry share by 2025, as a result of strong resistance in high pressure and high temperature applications. Furthermore, turbochargers fitted on engines require adequate maintenance in order to ensure efficient engine performance by regulating and enhancing exhaust gas flow, which is likely to support segmental market growth.

Due to the need for periodic upkeep of such vehicles for proper functioning and compliance with strict regulatory standards, vehicles aged over 3 years are poised to hold a significant share of the overall authorized car service center market in 2025.

Routine and preventive servicing is paramount in older vehicles in order to maintain their resale value and prevent unexpected breakdowns. This is a key factor leading to higher demand for authorized OEMs as well as independent garages over the forecast spell.

Meanwhile, the evolution of next-generation automobiles with sophisticated mechanical and electrical systems is expected to contribute heavily to the growth of the organized OEM workshops segment.

Given the increasing vehicle sales in emerging nations like China, India and Australia, the APAC authorized car service center market is projected to show the highest growth rate over the estimated timeframe, accelerating demand for auto repair and servicing facilities. For example, as per the Australian Automotive Aftermarket Association’s (AAAA) 2017 data, the country recorded the highest car ownership levels in the region, with nearly 764 cars per 1,000 individuals. Another significant contributor to authorized car service center market expansion is the high traffic density and automobile congestion culminating in the degradation of car parts, leading to an increase in repair service demand.

The European government’s rigorous measures to enhance the fuel economy have also compelled car owners to invest in regular preventive vehicle maintenance services. Moreover, as a result of the growing vehicle population in countries including the Czech Republic, Poland, Romania, Hungary and Croatia, the Eastern Europe authorized car service center industry is also expected to witness prolific gains.

Author NameSatarupa De

A regional rundown of smart grid market: APAC to gain ground as a prominent investment hub over 2018-2024

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In the recent years, smart grid market has earned substantial revenue due to the increasing awareness about the incredible benefits provided by these products. In addition, this vertical has also received quite some impetus on account of the rising requirement of power grids that can accommodate and support increasing numbers of electronic devices in each household. The importance of smart grids has been recently upheld by the city council of Sault Ste. Marie in Canada when a multi-million-dollar implementation of smart grid technology was cleared. Authorities managing the development of the project assured citizens that the upgrading to smart grid will have no financial, reliability or environmental drawbacks. In fact, it would bring about a 11-cent reduction in the monthly energy bills and drastically reduce CO2 emission to 2,804 tons annually within the city.

U.S. Smart Grid Market Size, By Technology, 2017 & 2024 (USD Million)
U.S. Smart Grid Market Size, By Technology, 2017 & 2024 (USD Million)

As the disasters caused by rapidly incremental climate change have plagued the news headlines of late, investment in the smart grid industry in the United States has also registered a cumulative upsurge. In 2017, U.S. smart grid market was valued at $3 billion. Recently the Massachusetts Department of Public Utilities issued an approval for significant upgrade in the state’s electric grid. The order authorized utility companies of the state to invest $220 million in the modernization of the existent grid. The improvement project, which is expected to improve reliability and efficiency, will require 3 years for the upgrade. Agencies with environmental interest such as Energy and Environmental Affairs of U.S. have acclaimed the order to be a recognition to the role advanced meters and smart grids play to reduce costs, increase energy efficiency and maximize clean energy generation.

The grid modernization investments will automate the process for improved visibility of mechanical equipment, creation of a self-healing grid and automated command and control. These improvements will help reduce power outages and improve the process of storm restoration, as well as enhance the utility companies’ ability to integrate distributed energy resources onto the electric grid. The success of the modernization is expected to encourage such investments in other states as well thus contributing to the expansion of the smart grid industry in the United States.

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Similar efforts are also in motion in Europe where the EU is aiming at replacing 80% of the electric meters with smart meters by 2020. In a recent venture, EU and China have released a joint statement with the intention of exchanging potential innovative and legislative solutions to meet the global demand of clean and green energy alternatives. Both China and EU agreed that improvement of energy supply security will enhance energy efficiency, support switching to low carbon energy sources and increase the share of renewable energies. According to findings presented by the European Commission, China and EU consume 22% and 12.5% of the global energy respectively and both are trying to break the dependence on fossil fuel imports. To achieve this goal, increasing the share of renewable energy sources and upgrading the potential of smart grids has been mentioned to be pivotal, pointing towards the increase in investment in the smart grid industry over the coming years. The smart grid market is being predicted to perform well in these regions as EU is currently drafting a 2050 decarbonization strategy and China has committed to bring down its carbon footprint by setting carbon reduction goals and other renewable targets to be met by 2030.

Speaking about China’s investment in the smart grid industry it will be prudent to mention that other Asian countries are also recognizing the potential of a smart grids. Indeed, APAC smart grid industry is estimated to grow over 12% over 2018-2024. Citing an instance, the Indian government recently announced that it would develop a smart grid project in the financial and technological hub near New Delhi, Gurugram. The underground smart grid is expected to be completed by 2022, saving 120-150 MW of electricity every day and solving the long-standing issues of power theft and technical faults. A software-based technology will be used to replace manual maintenance in all low-transmission (LT) lines that will be located underground. The underground placement of the lines will potentially curb pilferage and theft that has been impairing power supply by almost 20%. The incidence provides apt evidence that India smart grid market is poised for a bright future.

Smart grids add monitoring, control, analysis and communication capabilities to electrical delivery system while reducing energy consumption. Utilities also benefit from smart grids as it allows them to move electricity around the system more economically and efficiently. Smart grids are also positioned to take advantage of new technologies such as hybrid electric vehicles, smart metering, distribution automation and solar energy. As governments look to optimize the operation of the entire electrical grid, increased smart grid deployment will be witnessed across the globe. As per reliable estimates, smart grid market is anticipated to surpass $70 billion by 2024.

Author NameParoma Bhattacharya

North America automotive aftermarket to accumulate substantial proceeds, global industry valuation to cross a humongous USD 1,420 billion by 2024

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The changing preferences of consumers toward the comfort, appearance, & performance of vehicles has fueled automotive aftermarket to quite an admirable extent. As customers focus toward leading a luxurious lifestyle, complete with personalized vehicles for commuting in style, courtesy – increasing disposable incomes, automotive aftermarket is likely to witness lucrative gains in the years to come.

The subsequent wear and tear of existing automobiles will quite overtly lead to car owners wanting to replace old parts, enhance the vehicle’s appearance, and replace the car’s internal components for improved efficiency and safety. Eventually, this would propel the demand for state-of-the-art aftermarket parts, augmenting the commercialization landscape of automotive aftermarket.

U.S. Automotive Aftermarket, By Sales Outlet, 2017 & 2024, (USD Billion)
U.S. Automotive Aftermarket, By Sales Outlet, 2017 & 2024, (USD Billion)

The ever expanding automotive sector is one of the most crucial drivers of the global automotive aftermarket. Over the last couple of decades, the demand for automobiles has only skyrocketed across the developed and developing economies. According to estimates by OICA, LCVs and passenger cars accounted for a sales figure of close to 86 million units in the year 2017 – apparently an upsurge of 2.4% when compared to the previous year. As the sales of commutable vehicles continue to increase and the demand for afterparts experiences an uptick, the remuneration portfolio of automotive aftermarket will undergo a significant change, as per experts.

Another trend that has lately made its presence felt in automotive aftermarket is the rising deployment of eco-friendly techniques in automotive manufacturing. Driven by a stringent regulatory landscape pertaining to environmental safety and the concerns stemming from rising carbon emissions, the demand for sustainable, alternative automobile parts has considerably increased, thereby driving the global automotive aftermarket share.

Unveiling North America automotive aftermarket trends over 2018-2024

North America, primarily driven by the United States and Canada, has been one of the most significant growth grounds for the global automotive aftermarket, which principally can be attributed to the expanding automotive industry in the region. The continent has been a witness to an upsurge in the production of new vehicles and the enhancement of older ones. Furthermore, the region is a powerhouse of technological advancements in automobile production and upgradation, which is likely to generate novel opportunities for aftermarket companies in the years to come.

North America is also remnant of a consumer base that demands increasing vehicle personalization, Bluetooth connection, digitization, and other interesting automotive electronics. The incorporation of advanced accessories is thus likely to drive North America automotive aftermarket. Incidentally, the region accounted for 30% of the overall automotive aftermarket share in the year 2017.

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Another pivotal factor likely to drive North America automotive aftermarket over the forecast period is the improved fuel economy that would quite overtly, augment the average miles that the customer drives, which would lead to increased wear and tear in vehicle parts. This would eventually fuel the requirement for aftermarket spare parts in the continent, stimulating North America automotive aftermarket industry trends.

Technological advancements have indeed had a major impact on the overall automotive aftermarket in the last half a decade. The surging demand for electrification and installation of software has been touted to generate novel avenues for aftermarket workshops and suppliers. The popularity of ADAS, infotainment systems, and telematics will also serve to augment the demand for technologically developed parts, that would help stimulate automotive aftermarket industry growth in the years to come.

Some of the most noteworthy players in automotive aftermarket fall along the likes of the 3M Company, Akebono Brake Corporation, Delphi, Denso, Continental AG, Robert Bosch GmbH, ACDelco, ASIMCO Technologies ltd., Federal-Mogul, Magneti Marelli, and more. In a bid to expand their reach across myriad geographies, these leading contenders have been rather proactive in adopting business growth tactics such as strategic collaborations. Citing an instance of the same, nearly a couple of years back, industry player Faurecia inked its third JV with its partners in Iran with an intention to consolidate its presence in the regional automotive aftermarket.

Author Name :Saipriya Iyer