The automotive industry is on the brink of a seismic shift. For the most part, innovative technological advancements and consumer preferences drive this change. The growing need to tackle urgent environmental issues is also a contributing factor.
As we enter a new era in transportation, the aftermarket needs to keep pace with understanding how these changes will impact their industry.
Success in the aftermarket industry depends on understanding what the future holds. Professionals will face new challenges and opportunities. Being aware of these changes can help them adapt and thrive.
Let’s explore the current trends driving the auto industry as a whole and their impact on the aftermarket and auto care landscape.
The popularity of electric vehicles (EVs) is growing each day. According to a report by Counterpoint Research, EVs accounted for over 14 per cent of the world’s passenger vehicle sales in 2022, compared to 9% in 2021.
As such, the demand for EV-specific parts and services will grow as more consumers opt for EVs. This creates new chances for aftermarket businesses to serve the growing EV market. These vehicles require different types of maintenance and repair processes compared to traditional gas-powered cars.
For example, EVs don’t need traditional maintenance and have fewer moving parts. As a result, auto care professionals must adapt their skills and offerings to cater to EV owners’ needs.
The growth of the EV market presents many opportunities for auto care businesses. These may include specialized EV repair services, parts, and charging infrastructure solutions.
Self-driving cars will become increasingly common in the next few years. Statista says we can expect 54 million self-driving cars on the world’s roads by 2024.
As autonomous vehicle technology advances, more vehicles will come with self-driving capabilities. This will change the auto care landscape, if it hasn’t already. Due to complex systems that make self-driving possible, new maintenance and repair needs will emerge.
Autonomous driving may lead to fewer accidents due to human error. As a result, the need for some collision repair services could decrease.
Also, self-driving cars depend on specific sensors and software. This means automotive service professionals may have to learn new skills. If the industry rises to the occasion, this may lead to more specialized aftermarket businesses. Their services may focus more on autonomous vehicle maintenance and repair.
Additionally, aftermarket companies must collaborate more with original equipment manufacturers (OEMs). Right to repair remains a sticking point. Stronger partnerships ensure access to necessary tools and resources to service autonomous vehicles.
The global chip shortage has significantly affected the automotive sector, particularly production and supply chains. This ongoing crisis has far-reaching consequences for the aftermarket sector as well.
A combination of factors contributed to the shortage — increased demand for consumer electronics during the COVID-19 pandemic and the current ongoing war in Ukraine.
The shortage has led to a significant reduction in vehicle production. Many automakers had to reduce their output or halt production altogether. Consumers are facing longer wait times to buy new vehicles. Specific models also became more limited as automakers focus production on higher margin vehicles. These will add pressure on the aftermarket sector in the future, as the reduction in new vehicle sales will mean fewer vehicles entering the aftermarket sweet spot, reducing demand for parts and services.
Aftermarket businesses may need to adjust their strategies in response to the chip shortage. As average vehicle age grows, this could include focusing more on servicing older vehicles or expanding into new markets less affected by the chip drought.
As the industry navigates this crisis, many wonder, “Will chip shortage end in 2023?” Understanding the timeline for resolution will help aftermarket businesses plan better.
Connected vehicles are becoming increasingly common. Fortune Business Insights predicts that the worldwide connected car market will grow from US$60 billion in 2021 to almost US$192 billion by 2028.
Connected vehicles rely on advanced technologies, such as onboard sensors and telematics systems. These enable features like real-time navigation, remote diagnostics, and over-the-air updates. This increased connectivity offers new opportunities for aftermarket businesses to provide connected services.
Connected vehicles produce plenty of data. Aftermarket businesses can use this data to provide services such as:
This approach helps create more value for customers and strengthens customer relationships.
The rise of connected vehicles also presents some challenges for auto care professionals. For example, they must develop expertise in handling vehicle data while being mindful of customer privacy. Additionally, they must ensure compatibility with the latest technologies and OEM systems.
Environmental concerns are leading to a shift in the automotive industry towards a circular economy. This change emphasizes the need for recycling and reusing automotive components.
People are increasingly favoring remanufactured and refurbished car parts. Cost savings, environmental benefits, and regulatory changes drive this trend. It creates new chances for aftermarket businesses to join the circular economy.
Here are just a few ways auto care providers can contribute:
In short, aftermarket businesses can make more money while being environmentally friendly. This approach can help companies to cater to cost-conscious and eco-minded customers.
The automotive industry is racing toward a bold new horizon. Aftermarket businesses must brace themselves for a journey into uncharted territory.
Aftermarket professionals can thrive in this rapidly changing landscape by embracing electrification, mastering autonomous vehicle technology, leveraging digitalization, and supporting sustainability.
The road ahead is filled with challenges, opportunities, and uncertainties, and it demands a proactive and forward-thinking approach. Remember that the future belongs to those who dare to dream, innovate, and adapt.
Cedric Jackson is passionate about internet marketing, automotive, travel, and the entertainment world. When not busy writing, he spends his time travelling, reading and keeping up with world events.
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