Frost & Sullivan recently published '2017 Outlook for the Global Automotive Aftermarket'. The outlook encompasses some of the top trends across different regions and also builds a forecast for 2017, looking back at the market in 2016.

1. 2017 Global Automotive Aftermarket Outlook
B2B eCommerce, Uberization of Repair Services will Draw Investment
and Determine Competitive Strategy
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March 2017
Global Automotive & Transportation Research Team at Frost & Sullivan
KEY FINDINGS

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Contents
Section Slide Number
Executive Summary 3
Research Scope, and Objectives 8
Global Aftermarket Overview 12
North American Automotive Aftermarket Outlook 29
European Automotive Aftermarket Outlook 36
Chinese Automotive Aftermarket Outlook 46
Latin American Automotive Aftermarket Outlook 52
Indian Automotive Aftermarket Outlook 59
Growth Opportunities and Companies to Action 65
Key Conclusions and Future Outlook 68
Appendix 70
The Frost & Sullivan Story 74

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Executive Summary

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Key Highlights of 2016
Continued adoption of new business models by OEMs and suppliers — especially in Europe — were among
the key trends in 2016.
Global VIO grew by 3.7%; vehicle age continued to rise in many emerging markets
In 2016, total global vehicles in operation (VIO) increased to 1.16 billion, which created incremental
growth opportunities for replacement and maintenance-related services.
Aftermarket spending took a minor hit due to a slowdown in economic growth
Most major markets worldwide saw a lack of domestic demand and a gross domestic product (GDP)
growth slump that averaged a decline of 0.4 percentage points.
B2C eCommerce revenue increased to $21 billion; about 3.7% of parts were sold online globally
The popularity of online sales in the automotive aftermarket continued, growing 15.9% over 2015.
OEMs/suppliers increasingly participated in direct eRetailing
Many original equipment manufacturers (OEMs) and suppliers established or expanded direct
eCommerce platforms and introduced new business models. BMW, Michelin, and Goodyear focused on
direct eStore operations, while others such as PSA strengthened initiatives around eRetailing in their
long-term plans.
Uberization of the service aftermarket emerged
Investments in service aggregation grew, with new alliances and entries across regions (e.g., Autobutler
and eBay, Whocanfixmycar and UK OEMs, Openbay and Autozone).
Source: Frost & Sullivan

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0.00
1.00
2.00
3.00
4.00
5.00
Implications of geopolitical
changes in some of the biggest
markets (US, UK)
Growing penetration of online
sales for automotive parts
In-vehicle sales (telematics-
based business solutions)
Multi-brand vehicle servicing
opportunity in some markets
Strengthening of traditionally
non-automotive participants in
automotive aftermarket (e.g.,
Amazon)
Forecasted GDP growth
slowdown in most markets
globally
Strengthening of eCommerce
channel in B2B sales
Service aggregation, mobile
service next-generation business
models
Automotive Aftermarket: Senior Management Top-of-Mind Issues, Global, 2017
Data collected from 2016–2017 interviews and discussions with senior managers to
CEOs from Tier I suppliers globally
Key: 0 is no concern; 5 is high concern.
2017 Aftermarket Industry Senior Management Top-of-Mind Issues
Implications of a changing geopolitical environment and a possible economic slowdown, and a stronger
presence of non-automotive participants in the aftermarket, will be most talked about issues in 2017.
Source: Frost & Sullivan

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1
Trump presidency, Brexit will create uncertainty around parts pricing and availability
A changing global political climate resulting from the Trump presidency in the United States, the United Kingdom’s
impending exit from the European Union, and similar tension in other EU countries might affect tariffs in late 2017 or
early 2018 and create price volatility.
2
Global VIO expected to increase by 3.9% during 2017
The number of VIO globally is expected to reach 1.21 billion, up from 1.16 billion in 2016. At the micro level, an
uncertain US economic outlook, marginal contraction in the eurozone, and Japan’s economic growth will reduce some
of the demand for replacement and maintenance-related services.
3
Online sales in the automotive aftermarket expected to generate revenue of $24.5 billion globally
Led by the United States, Germany, France, the United Kingdom, and China, online sales of aftermarket replacement parts
will account for 4% of global revenue at the retail level.
4
OEMs and traditional participants will prepare to compete with marketplaces and tire eRetailers
OEMs and traditional companies will look to challenge the dominance of marketplaces and tire eRetailers, which generate
almost 50% of all online sales of replacement parts and tires in the automotive aftermarket. Mass-market OEMs such as
Ford and Renault and luxury OEMs such as BMW will continue to expand eCommerce platforms in more countries.
5
Small to medium-sized pure players continue to lose US share; outlook is more stable in Europe
Pure players selling directly and smaller eCommerce participants selling via marketplaces will continue to get muscled out
by bigger participants; in Europe, these competitors will not see strong growth but revenue and market share will remain
stable.
6
Continued investment in automotive start-ups , particularly in countries such as India
eRetailing is growing in popularity in the Indian automotive aftermarket. Mahindra is investing in digitization of the channel,
and more OEM activity is expected. Suppliers and start-ups alike will contribute to the aftermarket’s evolution.
Top 6 Predictions for 2017
Increased competitiveness on the back of growth in emerging markets and technological capabilities will drive
the automotive aftermarket in 2017.
Source: Frost & Sullivan

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Past 3 Years Next 3 Years Change
Customer Strategy
Strategic Partnerships
New Product Development
Technology Strategy
New Product Launch
Geographic Expansion
Competitive Strategy
Mergers & Acquisitions
Distribution Channel Optimization
Vertical Market Expansion
4 p.p.
7 p.p.
1 p.p.
8 p.p.
9 p.p.
2 p.p.
4 p.p.
4 p.p.
Stable
4 p.p.
Base: All respondents (n=303)
Q4. Which key strategies have delivered most growth in the past 3 years in your organization? (MULTIPLE RESPONSES)
Q5. Which strategies will you rely on to drive growth in the next 3 years in your organization? (MAX 3)
42%
41%
36%
31%
30%
29%
27%
17%
17%
13%
38%
48%
37%
39%
21%
31%
23%
21%
17%
17%
●
Automotive Industry CEO Survey: Key Strategies, 2016
Growth Strategies
Most CEOs stress developing strategic partnerships leveraging the use of technology. Aftermarket competition
will not be any different and will see an impetus towards adopting these measures in 2017.
Source: Frost & Sullivan

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Research Scope, and Objectives

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Passenger cars and light trucksVehicle Type
2016–2017Study Period
2016Base Year
North America, Latin America, Europe, China, and IndiaGeographical Scope
Revenue includes parts only and excludes service unless
otherwise noted. All revenue is measured at the manufacturer
level and is expressed in US dollars
Revenue
Research Scope
Source: Frost & Sullivan

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d Aim
• The aim of this study is to identify the size and direction of the global automotive parts and services
aftermarket, and its growth opportunities.
d Objectives
• To calculate the size of the global automotive aftermarket through analysis of VIO and replacement
rates
• To update the main Frost & Sullivan research findings for each region
• To identify the main industry trends in each region
• To determine which regions and segments will enjoy the highest growth potential
• To analyze the effect of Mega Trends such as eRetailing and telematics solutions on demand for
aftermarket parts and services
• To predict major benchmarks that the global aftermarket will achieve in 2016 and beyond
Research Aims and Objectives
Source: Frost & Sullivan

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Key Questions this Study will Answer
Source: Frost & Sullivan
What are the main factors that will influence the size and direction of the global
automotive aftermarket in 2017?
Automotive Aftermarket: Key Questions This Study Will Answer, Global, 2017
How does the industry outlook vary from region to region?
What is the outlook for eRetailing in each region during 2017?
What developments in the global automotive aftermarket in 2016 will have an impact
during 2017?
How are emerging regions being served, or underserved, by automotive parts and
services suppliers?