How the aftermarket can be an OEM profit engine  

The aftermarket is no longer a support function for original equipment manufacturers, according to a new report. Syncron’s 2025 global study said it has become a strategic growth engine and a stabilizer in uncertain markets.

Based on insights from 550 manufacturing leaders, the report found that aftermarket parts and services currently account for 10-29 per cent of OEM revenue. Within five years, that share is expected to climb to as much as 49 per cent, driven by plateauing equipment sales and volatile order patterns.

Nearly one third of U.S. OEMs expect aftermarket to contribute at least half of total revenue by 2030, according to the report.

Investment is following suit. Four in five (81 per cent) of OEMs plan to increase aftermarket spending over the next five years, with one in five targeting growth of more than 15 per cent. Priorities include improving forecasting accuracy, strengthening dealer networks, and adopting advanced technology to lock in profitability and resilience.

“Aftermarket isn’t just a lifeline; it’s a growth engine that stabilizes revenue when equipment sales fluctuate,” the report said.

Parts remain the backbone of this strategy, delivering higher margins and predictable demand. They account for 57 per cent of aftermarket revenue, and 95 per cent of OEMs include parts in their offering. Proprietary parts are viewed “as a competitive moat,” protecting market share from third-party providers and low-cost alternatives.

External pressures such as tariffs, supply chain disruption, and rising competition are reinforcing the aftermarket’s importance. OEMs are responding with measures like inventory optimization, supply chain diversification, and new business models such as subscriptions and remanufactured parts.

Integration is another critical factor. The report warned that silos between parts, service, and data functions can drain potential, slowing decision-making and fragmenting customer experience. OEMs with higher aftermarket maturity — characterized by integrated operations and real-time data visibility — report stronger revenue growth.

Technology adoption is accelerating, particularly in the U.S. and Nordic regions, where AI-driven forecasting and centralized data platforms are becoming standard. However, one third of OEMs still rate their data quality and accessibility as less than good, underscoring the need for investment in systems and skills.

“The next five years will belong to OEMs that treat aftermarket as a core business driver,” Syncron said. “Those that move first will set new benchmarks for availability, responsiveness, and value creation.”