- Rising valuations in the segment.
- Increasing variances in demand and value trajectory among component clusters and vehicle categories. This is particularly obvious when compared to traditional expectations of steady low-digit growth.
- Quality original equipment (OE) products leading to older vehicles. The average age of vehicles has increased from 8-9 years old to 12+ over the last 20 years. OE reliability generates skepticism around the validity of ‘like-for-like’ premium part replacement cycles.
DuckerFrontier’s automotive aftermarket experts constantly monitor and deliver granular feedback on these segment trends and product-specific growth in this sector, with a focus on investment opportunities and risks. As a result, we have seen three questions consistently arise. Here are DuckerFrontier’s insights on how your business should consider the level of threat to your individual acquisition and growth plans.
How will ‘fully’ autonomous vehicles affect the products I sell in the automotive aftermarket?
Despite some autonomous adoption, the automotive aftermarket parts industry will see limited ‘fully autonomous’ market impact until 2035-2040. Even then, the impact will remain minor with <5% of the population classified as level 4 autonomous. However, with steadily increasing OEM technology content, parts and service providers will need to pivot with the ‘new’ market. This includes utilizing traditional market participants to new entrants that specialize in these evolving technologies.
How will increasing electrification affect my automotive aftermarket product portfolio?
Conversion to electric vehicles will have a profound effect on the need for traditional time- or mileage-based wear part replacements. EVs do not require brake pad replacements, nor oil/filter changes at the same rates of traditional ICE vehicles.
How will Mobility as a Service (MaaS) affect purchase/replacement of my automotive aftermarket parts?
Original equipment manufacturing (OEM) market evolution points to rebranding and a strategic focus on “mobility service providers.” The impact of these service providers can reach far into the critical domains of traditional aftermarket suppliers. OEMs seek to build consumer connectivity that surpass dealer-based hand-off – where the relationship after the sale is funneled through the dealer and opens to the aftermarket – and build consumer relationships. In many cases, aftermarket parts suppliers need to rethink their overall go-to-market strategies to capture an increasingly fleet- and subscription- based Vehicles in Operation (VIO) strategy.
With over 60 years of experience, DuckerFrontier’s in-depth automotive aftermarket research leverages a mix of market analytics and industry access. Therefore, our team delivers quality commercial diligence and research for a broad mix of financial sponsors, advisors, corporate entities and industry associations. DuckerFrontier has conducted over 50 commercial growth and sponsor diligence assignments over the last 4 years. How can we help deliver better outcomes for your business? Contact us here to connect with a team member.