ASEAN Automotive Aftermarket is Estimated to Witness High Growth Owing to Opportunity of Increasing Automotive Production
The ASEAN automotive aftermarket comprises replacement parts, accessories, tools, equipment, and services used for maintenance and repair of automobiles post-purchase. The aftermarket parts include tires, batteries, lighting, engine components, suspension & braking components, and others that facilitate the repair and maintenance of vehicles. The aftermarket ensures hassle-free ownership and enhances vehicle performance and fuel efficiency. The demand for aftermarket components is driven by the increasing automobile production and vehicle fleet in Southeast Asian countries. ASEAN countries such as Thailand, Indonesia, and Malaysia are among the largest automotive manufacturers globally.
The global ASEAN Automotive Aftermarket size is estimated to be valued at US$ 28.7 Bn in 2023 and is expected to exhibit a CAGR of 9.8% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The opportunity of increasing automotive production in ASEAN countries is expected to drive the automotive aftermarket growth. Several ASEAN countries have adopted supportive industrial policies and free trade agreements to boost their automobile manufacturing. For instance, Thailand is the largest automobile manufacturer in Southeast Asia with an annual production capacity of over 3 million units. Its intense focus on automobile exports has led automakers like Toyota and Honda to establish local manufacturing plants. Similarly, robust FDI inflows and policy initiatives have made Indonesia and Malaysia prominent automotive hubs globally. The flourishing automobile industry has significantly expanded the vehicle parc in these countries, thus driving the demand for replacement parts and maintenance/repair services in the aftermarket. With ASEAN's automobile production projected to grow at over 6% annually till 2030, the requirement for aftermarket components is expected to rise substantially.
Porter’s Analysis
Threat of new entrants: The ASEAN automotive aftermarket has moderate threat of new entrants due to high investment required to enter this market. Established suppliers have an advantage due to brand recognition and supply chain infrastructure.
Bargaining power of buyers: Buyers have moderate bargaining power due to presence of many suppliers. However, established OEM brands and large suppliers have an advantage.
Bargaining power of suppliers: Major suppliers like Bridgestone Corporation and Denso Corporation have strong bargaining power due to their strong production capabilities and brand value.
Threat of new substitutes: Threat of substitutes is low as there are limited alternatives for auto parts required for repair and maintenance.
Competitive rivalry: The market is highly competitive due to presence of many regional and international brands.
SWOT Analysis
Strength: Large and growing ASEAN vehicle parc provides huge aftermarket opportunities. Certain countries like Indonesia and Thailand have a developing auto industry.
Weakness: Infrastructure challenges and low average incomes in some ASEAN countries. Counterfeit parts can impact genuine suppliers.
Opportunity: Rising affluence will boost quality auto component demand. Connected vehicles to drive need for advanced electronic components.
Threats: Economic slowdowns can impact discretionary vehicle maintenance spends. Stringent emission norms require upgrades.
Key Takeaways
The ASEAN automotive aftermarket is estimated to be valued at US$ 28.7 Bn in 2023 and is expected to exhibit a CAGR of 9.8% over the forecast period 2023 to 2030.
The ASEAN automotive aftermarket is expected to witness high growth over the forecast period driven by strong vehicle parc expansion in the region. Countries like Indonesia, Thailand and Vietnam are projected to drive the growth owing to their developing automobile manufacturing industries and rising consumer spending power. Regional players are focusing on expanding their footprint across the ASEAN region leveraging their strong local presence and low-cost manufacturing.
Indonesia and Thailand are the largest and fastest growing markets for automotive aftermarket in ASEAN supported by strong vehicle parc and developing automotive industries in these countries. Other high potential markets include Vietnam, Malaysia and Philippines due to increasing vehicle ownership and rising spending on vehicle maintenance and repairs.
Key players: Key players operating in the ASEAN Automotive AfterMarket are Bridgestone Corporation, Denso Corporation, Hella KGaA, BorgWarner Inc., Robert Bosch GmbH, Continental AG, Enkei Corporation, F.C.C. Co.,Ltd., Mitsuba Corp., Schlemmer, Showa Corporation, Yachio Industry Co., Ltd., TOYOTA MOTOR CORPORATION, and ZF Friedrichshafen AG. Major players are focusing on expanding in high growth markets through partnerships with local players.
Get more insights on this topic: https://creativenewsalert.blogspot.com/2023/12/the-asean-automotive-aftermarket-growth.html
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