Automotive Aftermarket - Greetings from the 2021 Service Logistics Asia Summit!

The high-level keynote speeches, workshops, and panel discussions with global industry experts, discussing the challenges in Service Logistics and Aftermarket, were the highlights of the conference. The Automotive Aftermarket is facing challenging times ahead, with a forecasted valuation of USD 800 billion by 2027 (Global Market Insight Inc., 2021) or even higher at USD 1.2 trillion by 2030 (McKinsey, 2018), bringing both huge opportunities and risks. The industry is challenged by the need to undertake comprehensive business transformations, enabled and forced by digitization and new technologies. 

Beyond the mega trends in the Mobility Industry, such as autonomous driving, connected vehicles, shared mobility, and digitization, it is important to consider the specific Aftermarket trends and game changers. What major topics are driving the Aftermarket agenda?  

• The shift towards Electric Vehicles (EV) will change the agenda in the mobility industry resulting in a new landscape in the Automotive Aftermarket business. According to the BBC News, June 2021 “By 2025 20% of all new cars sold globally will be electric, (...) That will leap to 40% by 2030, and by 2040 virtually every new car sold globally will be electric, says UBS.”

• New digital players will enter the aftermarket resulting in a new landscape with high level of competition. This new players with Digital Business Models will play a key role in resetting the aftermarket landscape. There is no time to wait for something. The Redesign of Aftermarket Business Models and the digitization of distribution channels are ultimate success folders. 

• Consolidations / Mergers & Aquisitions will play a pivotal role as well. Aquisitions of companies, consolidation of buying groups or/and new aftermarket conglomerate's will reinforce a new market structure. Especially in mature markets (Europe, North America), the consolidations can become a game changer. 

• Expanding Sales trough OEM factory fill will be a reinforced driver for profits and changes the traditional Aftermarket structure as well. Global Market Insight Inc. (2021) reports "that Industry experts speculate the OEM factory fill segment to account for USD 60 billion by the end of 2027." 

• The development of future-ready aftermarket organizations will become increasingly important as new aftermarket ecosystems evolve, especially in the area of aftermarket operations management that drives supply chain and logistics towards the next level of excellence.