Growth of Aftermarket Sector
The global aftermarket automotive parts industry has seen tremendous growth over the last decade. As vehicles age and mileage increases, the need for replacement parts rises. Aftermarket parts provide a more affordable alternative to expensive original equipment manufacturer (OEM) parts. The aftermarket segment accounted for over $250 billion in annual sales globally in 2020. North America represented the largest market, followed by Europe and Asia Pacific. The independent warehouse distributor channel captured the majority of aftermarket sales, serving both professional repair shops and do-it-yourself consumers. Growth is expected to continue, driven by the rising average age of vehicles on the road. With more cars staying in service longer, demand for repair and replacement parts will remain robust.
Rising Prominence of E-Commerce
The rapid growth of e-commerce has greatly impacted the aftermarket industry in recent years. Online retailers offer consumers increased selection, convenience, and competitive pricing compared to traditional brick-and-mortar shops. Major online marketplaces like Amazon have seen explosive growth in aftermarket auto part sales. In particular, do-it-yourself buyers are turning to the internet for research and purchases. Online research allows consumers to easily compare products and read reviews from other owners. Direct-to-consumer e-tailers like RockAuto have also risen to prominence, undercutting retail prices while providing a wide choice of brands. The convenience and cost savings of online shopping will continue drawing customers away from physical stores to internet retailers. Technology innovations like virtual fitting tools are also enhancing the online shopping experience.
Rising Competition from Chinese Manufacturers
China has emerged as a dominant force in the global Aftermarket Automotive Parts industry in the past decade due to low production costs and emphasis on price competitiveness. Chinese companies like Coxreels, Lampo Lighting, and Anthropic have achieved significant growth selling affordable replacement parts worldwide through online marketplaces and distribution networks. Not only are labor expenses far lower in China, but technological advances have improved product quality to match major brands. However, cultural and logistical hurdles still exist in replicating service and support typically provided by domestic suppliers. Issues with counterfeiting have also plagued some Chinese manufacturers. Regardless, competitive pricing will keep Chinese brands at the forefront of aftermarket trends, applying downward pressure on prices industry-wide while expanding product selection for value-oriented buyers.
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