When I was growing up, the extent of my universe was contained within the friendly confines of my neighborhood. As I got older, my universe continued to expand through high school and college, my first job running a territory in New York, and eventually traveling to Europe and Asia as part of my career. The “traditional” aftermarket, as many of us knew it, also experienced broadening boundaries to the point that most double digit growth opportunities exist outside of North America.
So where are the bright spots in the years to come in the automotive aftermarket? Here are a few that can’t be overlooked.
China
A 670-page report on global energy trends by the International Energy Agency points out China, the world's largest auto market and most populous country, went from having four cars per 1,000 people in 2000 to 40 per 1,000 in 2010. China has about 60 million vehicles now, but in 23 years the prediction is it will have 400 million -- 310 motor vehicles per 1,000 people -- still less than half the 660 vehicles per 1,000 population currently on U.S. roads, but there are a lot more Chinese (1.3 billion) than Americans and Europeans.
In 2025, the report forecasts China will have more cars and trucks than the United States or the European Union. The number of motor vehicles in India is predicted to leap from 14 million passenger cars in 2011 to about 160 million by 2035. (International Energy Agency, as reported in Bloomberg news 1-11-2013)
Ford Motor Co., whose top seller in China in 2011 ranked 10th, had the best-selling sedan in China last year with the Focus. The car beat GM’s Chevrolet Sail and Buick Excelle - last year’s top seller. As these countries become more prosperous and their citizens purchase new vehicles for the very first time; opportunities abound for aftermarket suppliers to learn from their established practices in the U.S. and develop a mutually beneficial relationship with the consumer, shop owner, and distributors.
As China, India, and South American vehicle parcs continue to expand, the product management, marketing, logistics, and technology departments (to name a few) of aftermarket suppliers will each be faced with their own unique challenges (and opportunities).
At AASA we are committed to being a resource for your company when exploring these new markets. Our China Aftermarket Forum meets each quarter in Shanghai and is composed of suppliers that are looking to, or have established, an aftermarket presence in China. Their meetings are focused on supplying the information, tools, and networking essential for you to be successful in China.
Additional Global Markets for Growth
The AASA Overseas Automotive Council (OAC) is dedicated to matching potential customers to suppliers in the South and Central American marketplace and meets regularly, including a reception between customers and suppliers at AAPEX. OAC members are joining together for a trade mission to Russia (Monday, Aug. 26 –Thursday, Aug. 29) aimed at matching potential customers with suppliers in another region that is ripe with opportunity.
e-Tailing
Our recent study in conjunction with Booz & Co. focused on another opportunity for aftermarket suppliers on a global level, e-tailing. The study pointed out that while Internet sales will never overcome “traditional” distribution, it is an excellent opportunity for suppliers to learn more about the ultimate customer, the person who throws away the box. Using the data that you can mine from the internet about customer’s product searches, related item sales, pricing, and brand preference could revolutionize the way that you approach the marketplace. If you haven’t seen the report it can be accessed at this link.
Conclusion and Next Steps
While domestic markets and existing routes to market are rebounding, it is essential to look outside your neighborhood for take advantage of the evolving opportunities, as well as the tools and resources available to you through your association.
Subscribe to Aftermarket Business World and receive articles like this every month….absolutely free. Click here.
