Why Automotive Aftermarket is Pivotal for the Success of the Global Automotive Industry
In the coming next few years, automotive aftermarket has a dual role to play; pulling out the automobile sector from the pandemic-induced decline and facilitating a shift towards electric mobility. Both these responsibilities are extremely crucial and might, in fact, decide the very future of the global automobile manufacturing sector. Going by the trends of the past few months, automobile aftermarket is poised to fulfill both of its roles successfully.
Apart from the construction sector, the Covid-19 pandemic has had the most disastrous effect on the automotive manufacturing industry. This was primarily due to the lockdowns which were put in place across the globe to curb the spread of the virus. Additionally, the import-export restrictions heavily disrupted the global supply chains, thus bringing down the growth rate of automotive industry further. However, the global automotive industry has been quick to recover from the pandemic-induced slump and register astonishing growth numbers in the past few months. As per market analysts, the global automotive aftermarket has played a huge role in helping the automobile industry to regain its lost glory. As per a report published by Research Dive, a dramatic rise in the digitization of automotive component delivery services in the past few years is anticipated to boost the growth rate of the automotive aftermarket, which, in turn, is expected to help the global automotive manufacturing industry.
A Close Look at the Impact of Growth in Automotive Aftermarket on Automobile Manufacturing Industry in the Post-Pandemic Period
As said earlier, there were massive supply-side issues which plagued the automotive industry during the pandemic period. However, this was, by no means, the only reason why there was a decline the growth of the industry. Another important factor which affected the market was the demand-side crunch. During the pandemic, most people used up their savings for their daily sustenance and a huge chunk of population lost their jobs which cut their spending capability drastically. As a result of this cash liquidity crunch, the demand for new automobiles also reduced, thus affecting the industry. However, as the pandemic subsided and restrictions were slowly lifted, the first natural step for many people was to service and, if the need arose, repair their vehicles before using them again. This led to a gradual increase in the demand for automotive components which helped in restarting the production cycles of the automobile manufacturing companies. Additionally, the demand for automotive components was augmented by a general rise in the awareness regarding the importance of regular maintenance and repair of automobiles. Thus, though the demand for new vehicles didn’t rise, the automotive aftermarket played a key role in the reigniting the flame for the automobile industry.
The automobile industry has been in a state of flux since the start of the 21st century, especially in the last decade, due to the growing popularity of electric vehicles. Though, in the long run, the automobile industry is surely to gain from this EV paradigm shift, the dynamic nature of this phenomenon has led to a certain plateauing of growth for the industry for now. One reason behind this might be that people are still trusting traditional vehicles and postponing their decision of buying electric vehicles so as to buy “better and advanced” models in the next few years. Hence, facilitating a smooth-yet-swift shift towards EV mobility becomes crucial for the automobile industry. Automotive aftermarket once again becomes crucial here; automotive aftermarket can help to address the demands of people who trust traditional vehicles, while at the same time supplementing the needs of the EV industry by launching advanced electric automotive components to facilitate the EV shift. A robust infrastructure which is needed for the EV transformation can thus be established with the support of automotive aftermarket.
Looking at the dual role played by the automotive aftermarket in pushing forward the automobile sector and facilitating the emergence of new-age electric vehicles, it wouldn’t be an exaggeration to say that automotive aftermarket is, in fact, the backbone of the automobile industry. This is exactly why governments in various countries gave huge subsidies to the micro, small, and medium scale industries operating in this market to boost the automobile industries. Moreover, investments in the research and design of automotive components have played a major role in establishing the significance of this market in the overall automobile sector. The Research Dive report, thus, correctly captures the expected rise of the automotive aftermarket in the next few years.
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