ASEAN AUTOMOTIVE AFTERMARKET ANALYSIS

ASEAN Automotive Aftermarket is estimated to be valued at US$ 55.3 Bn by 2030.

The automotive aftermarket is the secondary market of the automotive industry which deals with manufacturing, remanufacturing, distribution, retailing, and installation of vehicle parts, equipment, chemicals, and accessories. This is done after the sale of the automobile by the original equipment manufacturer (OEM) to the consumer. The automotive aftermarket deals with oil and lubricants, batteries, tires, filters, starters and alternators, coatings and paint consumables, exhaust components, spark plugs, crash parts, etc. Moreover, there are interior and exterior accessories including audio/video devices, steering wheels, parking brake handles, shift boots, grills, headlight covers, front & rear guards, mirrors, etc. Consumers can repair their vehicles on their own with the DIY segments or can take the vehicle to professional repair facilities.

ASEAN Automotive Aftermarket- Impact of Coronavirus (COVID-19) Pandemic

Due to the outbreak of COVID-19 pandemic has affected the ASEAN automotive aftermarket significantly. The lockdown was imposed across the globe as a precautionary measure by governments. This led to temporary suspension of all businesses in the automotive sector. Supply chain operations were disrupted causing a shortage of raw materials and components required for automotive manufacturing. This hampered the demand and manufacturing of automotive infotainment which have wide applications in the automotive sector and hence the ASEAN automotive aftermarket witnessed slow growth during the pandemic.

ASEAN Automotive Aftermarket- Drivers

An Increase in the Average Age of Vehicles

The average age of a vehicle in operation refers to the average time in years after which a vehicle can be scrapped. This life varies from region to region based on countries' macro and micro economic indicators. For instance, in developed countries such as the U.S. where per capita income is high, the average life of car is less. Whereas, in emerging economies such as Indonesia, Thailand, and Vietnam, vehicles are used for longer period of time. According to CMI analysis, the average age of vehicles is increasing year-on-year.

Increase in Miles Driven Per Vehicle

The average miles driven per vehicle have increased over time. This increase in miles driven per vehicle is closely associated with wear and tear of parts. The increase in miles driven per vehicle affects the aftermarket for automotive parts such as tires as they need to be replaced once they have been driven for a fixed set of miles. The introduction of technologies such as tire pressure monitoring, remote vehicle diagnostics along with better quality services and maintenance have increase the average age of vehicles in the region. Thus, the rise in the average age of vehicles and increase in miles driven per vehicle is facilitating growth of the automotive aftermarket.

ASEAN Automotive Aftermarket- Opportunities

Technological Advancements

With an increase in technological advancements, vehicles are becoming more complex.  As a result, there is need for skilled technicians for repair and replacement of parts. Service centers and franchise stores have the needed parts and trained technicians. Some franchise-based stores also provide training on replacement and repair of parts. Therefore, the growing complexity of vehicles has created growth opportunities for the automotive aftermarket.

Strategic Evolution of Local Repair Shops

Several small locally-owned repair shops don’t offer a complete range of repair and maintenance services, and therefore follow a competitive strategy of specializing in any particular service or expand the number of services and offerings. Additionally, small local shop owners are engaging in strategic partnerships and standardized contracts with fleet operators and leasing firms to provide replacement and maintenance services at lower prices. Moreover, there are more than 5000 independent repair shops in Thailand which is expected to drive the ASEAN aftermarket growth.

ASEAN Automotive Aftermarket- Trends

Use of self-Inflating tires based on Air Maintenance Technology

Inflating the tires too much can lead to wear and tear while not having enough pressure. As a result companies like The Goodyear Tire and Rubber Company has created a self-inflating tire system which can maintain the pressure at desired levels. The self-inflating tire system works on air maintenance technology which uses peristaltic pump to maintain the pressure. With such advancement in technology greater life and fuel economy could be achieved.

Growing use of software driven LED matrix head lamps

The LED matrix headlights is the most recent trends for the automotive headlights. The LED matrix headlight works on glare free high beam function which allows drivers to drive with high beam all the time. An ultra-light sensitive camera detects traffic on the road thus providing automatic distribution of light from high beam to mask specific area. This light provides high beam without blinding other drivers. The LED matrix headlight is a software driven system that adjusts the beam in real time.

ASEAN Automotive Aftermarket- Restraints

Unorganized Aftermarket for Replaceable Components Such as Filters and Lubricants

The aftermarket for components such as automotive filters and lubricants among others is enormous as these require continuous replacement. The ASEAN market has large number of the local automotive parts manufacturers which served domestic customers’ demand. The aftermarket in the ASEAN region is highly unorganized as a large number of local players operate in the market and supply low standard air filters, coolants/lubricants at a lower price. As countries in the region are cost sensitive, consumers are likely to buy low price components, making it challenging for global players to operate in this region. Moreover, using low quality intake air filters with ineffective filters-media can damage the engine and its components. Similar effect can be observed by using low quality lubricants.

Increase in the Replacement and Maintenance Cost

With the increasing technical complexity of vehicles, cost of replacing parts and maintenance costs have increased substantially over time. Furthermore, with advancement in replacement parts, tools and equipment used for maintenance, there has been a surge in aftermarket costs. Moreover, increasing cost of labor across the globe and low consumer preference for costlier parts and services is restraining the growth of the market. According to CMI analysis, the annual passenger car maintenance cost per unit is expected to increase during the forecast period.

Figure 1: ASEAN Automotive Aftermarket Share (%), By Vehicle Type, 2023

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ASEAN Automotive Aftermarket- Segmentation

ASEAN Automotive Aftermarket report is segmented into Component & industrial vertical.

By Automotive Component: Battery, Body Parts, Brake Parts, Exhaust Components, Filters, Lighting and Electronic Components, Tire, Engine Components, Powertrain, Electrical & Air Conditioning, Wheels, Lubricants, and Others

By Vehicle Type: Car, Bikes, Vans, Racing Bikes, & Cars, and Commercial Vehicles

By Sales Channel: General Repair & Service Stations, Body Shops, and Independent & OEM Authorized Service Center/Dealers

ASEAN Automotive Aftermarket: Key Developments

Major market players are focusing on product launches, in order to enhance their product portfolio.

In April 2021, Lippert Components Inc., manufacturers and suppliers of highly engineered components to the RV industry announced the acquisition of Kaspar Ranch Hand Equipment, LLC. With this acquisition, Lippert Components Inc.’s aimed to expand its presence in the automotive parts aftermarket.

In February 2020, MotoRad LTD., developers and manufacturers of high-quality, reliable and durable thermostats, caps and engine management solutions for the Aftermarket, partnered with the Automotive Aftermarket Suppliers Association (AASA) and Auto Care Association to endorse the “Your Car. Your Data. Your Choice.” Campaign. This campaign was launched to inform vehicle owners about their automobiles' data with vital maintenance and repair information.

For instance, in February 2021, Goodyear Tire & Rubber Company acquired Cooper Tire & Rubber Company with the aim of consolidating their brand portfolio and offering comprehensive services across the entire market value spectrum.

In June 2023, Continental, an automotive company specializing in brake systems, systems, and components, introduced the UltraContact NXT series tire, notable for its significant use of sustainable materials. The tire incorporates a substantial portion of recycled, renewable, and ISCC PLUS mass balance-certified materials, accounting for up to 65% of its composition. The UltraContact NXT tires will be offered in a total of 19 different sizes to cater to various vehicle requirements.

In April 2023, Delphi Technologies, an autonomous automotive firm, unveiled a total of 87 products in its lineup. Among them, 65 parts catered to the company's core range, focusing on chassis, fuel delivery, and engine management. Meanwhile, Sparta, the company's specialized brand, introduced the remaining 22 parts, specifically designed for its fuel portfolio.

ASEAN Automotive Aftermarket: Key Companies Insights

Major players operating in the ASEAN Automotive Aftermarket include 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

*Definition:

The automotive aftermarket is the automotive industry market which includes equipment, replacement tires, service repair, collision, repair and accessories, etc. Companies operated in automotive aftermarket are manufacturing, remanufacturing, retailing, distribution, and installation of replacement vehicle parts, automotive accessories, service repair, and equipment