No organization can realize sustainable, long-term success if it fails to keep tabs on evolving trends affecting the market segments critical to its prosperity. As 2020 marks the start of a new decade, the aftermarket auto parts industry is staring at a number of geographical and technological trends. These promise to transform it in unprecedented ways. Here’s a look at some of the more important trends in this regard.
The World Wide Web has changed how people buy stuff. With more than 4 billion Internet users worldwide, any business that ignores this platform is missing out on much-needed potential revenue. E-commerce has experienced especially rapid growth thanks to the proliferation of smartphones. Now, the average person will simply pull out their phone and run a search query to find and order what they are looking for.
A growing number of prospective aftermarket car and aftermarket Caterpillar parts buyers will do the entire shopping and purchase process online and only wait for the item to be delivered. That includes taking a look at videos, reviews, testimonials, white papers, and news that would confirm whether the part they are considering is worth the money.
Aftermarket parts suppliers, on the other hand, will invest more time and money in online advertising so as to reach and capture their target audience.
The modern vehicle is all but a giant interconnected mobile computer. With dozens of microprocessors, tens of gigabytes of data are generated each hour. These include driver behavior and telematics. And with the Internet of Things taking center stage, the amount of data generated and captured by cars will only continue to rise.
This data, as well as the advanced analytics it can be subjected to, is bound to become a key asset for aftermarket parts manufacturers and suppliers. The information could unleash numerous benefits, including customer insights, parts improvement, and predictive maintenance. Of course, all this has to be done while conforming to the relevant data protection and privacy laws, such as the EU’s General Data Protection Regulation (GDPR).
Consumers will turn to the Internet as their first port of call when researching the viability and value of a particular product. While quality is certainly a major part of purchase decisions, there’s no downplaying the role of price. Customers can ultimately only buy that which they can afford. An increasing number of websites will aggregate the price of auto parts from different suppliers in order to clearly show where the best deals are.
For suppliers, price transparency will bring increasing pressure on margins as they seek to offer a price that is within the range of their competitors. There’ll also be a push to provide value-adding services that may tip the competitive scales in their favor.
Average Vehicle Age is On the Up
The age of motor vehicles is on the rise. Light trucks and passenger cars in the US had an average age of 11.8 years in 2019. Industrial and commercial vehicles such as tractors haven’t been left behind in this trend. The reasons for the steadily increasing average age are diverse. Better built vehicles, higher quality fuels, longer loan repayment periods, and stagnating incomes among the middle class.
Irrespective of the cause, the older a car becomes, the more it requires its original parts replaced. This is good news for the aftermarket parts industry as it points to healthy growth for the foreseeable future.
These aftermarket car part trends are already visible today in some shape or form. They are bound to intensify in the short- to medium-term at least.