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Car Maintenance

The Automotive Aftermarket: Navigating Disruptive Changes

The automotive aftermarket is currently experiencing significant transformations driven by evolving market forces and industry dynamics. These changes have the potential to reshape the way aftermarket parts and services are delivered and consumed. In this in-depth exploration, we will delve into the various factors at play and their implications for different stakeholders in the industry.

Unraveling the Future of the Automotive Aftermarket

Overview of the Automotive Aftermarket in 2023

In 2023, the automotive aftermarket witnessed remarkable growth, reaching approximately US$391 billion. This growth was fueled by a confluence of factors within the rapidly changing industry. OEMs and major Tier 1 suppliers dominated the landscape, but the industry now faces significant disruption as automakers pivot their strategies around electric vehicles (EVs) and component sourcing. Retailers and consumers alike are being forced to rethink their approaches to aftermarket parts and services.The delivery systems that provide parts or services to consumers play a crucial role in the aftermarket. Franchised dealership service centers, independent garages, automotive retail chains, and big box retailers all contribute to the ecosystem. Major automotive-focused retailers lead in comprehensive aftermarket services, while specialty shops and big box retailers like Walmart and Costco dominate certain segments, such as tires.

Impact of EVs on the Automotive Aftermarket

EVs are set to have a profound impact on the automotive aftermarket. They will significantly influence OEM insourcing and the number of parts required to manufacture vehicles. Certain aftermarket categories and vehicle channels are more vulnerable to negative change over time. Traditional batteries and exhaust systems, in particular, stand to be hurt by the shift toward EVs. Although the aftermarket for these components will likely continue in the foreseeable future, the overall volume will shrink as the percentage of new vehicles represented by EVs grows.EVs also present unique challenges for independent garages and workshops. Historically strong with technicians well-versed in internal combustion engine systems, these shops will need to expand their capabilities to include technicians skilled in EVs. Otherwise, they risk losing access to a growing segment of business.Furthermore, a farther-reaching and less obvious effect on the automotive aftermarket comes with the broader transition to autonomous driving through EV development. While the transition toward autonomous driving has been in effect for years via technology developments already in place with ICE vehicles, such as lane assistance, adaptive cruise control, and collision-detection braking, software like Tesla's autopilot is rapidly accelerating the pace toward fully autonomous driving.As this technology matures, industry experts expect autonomous vehicles to lead to fewer accidents, more mobility fleets like Waymo, and potentially decreased private vehicle ownership. "While autonomous vehicles are also designed to drive in an 'optimal' fashion, they should in theory also require less wear-and-tear maintenance," the report said. "These factors would contribute to a significant decline in ongoing vehicle maintenance, hurting direct aftermarket players like parts retailers and independent garages."Experts also anticipate that a shift toward autonomous driving will change regulatory requirements around part sourcing and insurance liability. This would likely mean an even greater shift toward the OEM service model, where parts are consistent throughout the value chain and service delivery is 'certified' by OEM technicians.

Opportunities in the Autonomous Vehicle Aftermarket

Autonomous vehicles will provide significant data-driven opportunities for the aftermarket. With increased data coming from vehicles themselves due to autonomous systems, predictive maintenance will become an increasingly important competitive pillar for aftermarket service providers. This will likely primarily benefit the OEM service model. By leveraging this data, aftermarket service providers can offer more proactive and efficient maintenance services, enhancing customer satisfaction and loyalty.In conclusion, the automotive aftermarket is at a crossroads, facing both challenges and opportunities. As EVs and autonomous driving continue to gain momentum, industry players must adapt and innovate to stay relevant. By understanding the evolving market forces and industry dynamics, stakeholders can position themselves to thrive in this new era of the automotive aftermarket.

A motoring expert has sounded a warning to drivers, suggesting that hefty repair bills may soon be on the horizon. A recent study revealed that a significant 63% of Brits are unaware of the essential steps to maintain their cars. In an era where vehicles are generally more reliable, regular servicing remains crucial to sustain power and fuel economy and prevent serious problems from emerging.

Why Routine Maintenance Matters

Tim Rodie, an automotive expert at Motorpoint, emphasized the importance of making routine maintenance a priority. He pointed out, "It's astonishing to discover that many motorists lack confidence in completing basic car maintenance tasks and don't consider it their responsibility to perform these checks at home. Ultimately, as road users, we all have a duty to stay on top of our car maintenance to ensure the safety and roadworthiness of our vehicles."

Checking Tyre Tread Depths

To assist drivers in feeling more confident about servicing their vehicles, Tim recommended starting with checking tyre tread depths using a 20p coin. Legally, all cars must have a minimum of 1.6mm thread across the central 75% of any tyre surface. While tyres are typically checked during vehicle servicing, drivers are responsible for ensuring they have a safe amount of tread. At home, the simplest way to quickly assess this is by inserting a 20p piece into the grooves of each tyre. If the outer band of the coin is not visible, the tyre is within the legal limit and safe to drive.

For example, imagine a driver who had never checked their tyre tread depths before. After using the 20p coin method, they discovered that one of their tyres was dangerously close to the legal limit. This realization prompted them to take immediate action and get the tyre replaced, avoiding a potential accident due to poor tyre condition.

Monitoring Engine Oil Level

Tim also urged all drivers to check their vehicle's oil level at least once a month and top it up if needed. He explained, "Engine oil is often overlooked, but it is vital in minimizing friction and keeping the vehicle running smoothly. It keeps the inner workings of the car clean and reduces corrosion, helping the car stay in excellent condition for a longer period. Be sure to check your oil before any long journeys or once a month as part of your car maintenance routine."

Let's consider a case where a driver neglected to check their oil level regularly. As a result, the engine started to experience excessive friction, leading to decreased performance and potential damage. By following Tim's advice and regularly checking the oil level, the driver could have caught the issue early and taken the necessary steps to prevent further damage and costly repairs.