Frost & Sullivan: Rapid Rise in Operational Vehicles Drives Revenue Growth in Latin American Automotive Aftermarket
- Repair service providers must keep up with new vehicle technologies to expand consumer base
SAO PAULO, June 17, 2013 /PRNewswire/ -- A rapid increase in the installed base of vehicles has spurred demand for service maintenance and parts, boosting the Latin American automotive aftermarket. While Brazil, which has recently become the world's fourth largest automotive market, will continue to pull regional growth, the aftermarket is expected to undergo structural changes in the coming years following new regulations and increasing competition.
New analysis from Frost & Sullivan (http://www.automotive.frost.com), 360 Degree Analysis of the Latin American Automotive Aftermarket, finds that the passenger and light commercial vehicles (LCV) market earned revenues of $25.32 billion in 2012 and estimates this to reach $32.47 billion in 2017. Brazil and Mexico currently account for the largest share of total revenues, at 40 percent and 26 percent respectively. Colombia and Peru will witness the strongest growth going forward.
"Regulations limiting emissions, mandating equipment such as airbags and anti-brake systems, and influencing technological content in vehicles will generate demand for part replacements in Latin America," said Frost & Sullivan Automotive and Transportation Industry Analyst Michel Johanson. "Higher import duties and stricter part standards will also limit the use of illegally imported parts and will aid market development."
With customers choosing to maintain existing vehicles instead of buying new ones due to rising inflation, the aftermarket will receive a boost from the estimated 6.6 million vehicles – built between 2009 and 2011 – that are reaching the end of their warranty period. End users are likely to prefer higher technological content in newer parts. While the incorporation of expensive advanced fuel systems, telematics and similar electronic features will drive higher revenues, addressing these evolving user needs will be a complex task.
The automotive aftermarket pool is also expected to see a dip in the number of new vehicles as warranty coverage terms rise from three to as high as ten years due to competition among car manufacturers. Pressure from original equipment manufacturers has led spare part suppliers to design products with better life expectancy, further reducing replacement rates.
The lack of a preventive maintenance culture and the inclination of car owners to repair their vehicles only when necessary also curb aftermarket growth in Latin America. Products such as tires and brake parts that are indispensable for car functioning and security will be the most serviced.
"Repair service providers must keep up with new vehicle technologies to widen their consumer base," suggested Johanson. "Since a huge share of independent repairers will be unable to afford training and equipment, service chains are expected to witness robust growth."
The implementation of stricter emission and security standards in certain countries coupled with product quality control will bolster the aftermarket for replacement parts and increase spending per car. As the market matures, it will become more competitive and structured with the development of buying groups and private labels.
If you are interested in more information on this research, please send an e-mail to Francesca Valente, Corporate Communications, at francesca.valente@frost.com, with your full name, company name, job title, telephone number, company e-mail address, company website, city, state and country.
360 Degree Analysis of the Latin American Automotive Aftermarket is part of the Automotive & Transportation Growth Partnership Service program. Frost & Sullivan's related research services include: 360 Degree Analysis of the Automotive Market in Argentina and the Future of the Powertrain Market and Engine Technology Uptake Analysis in Brazilian Passenger Vehicles. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.
Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.
- The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
- The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.
For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?
Contact Us: Start the discussion
Subscribe: Newsletter on "the next big thing"
Register: Gain access to visionary innovation
360 Degree Analysis of the Latin American Automotive Aftermarket
NC1E-18
Contact:
Francesca Valente
Corporate Communications – Latin America
P: +54 11 4777 5300
F: +54 11 4777 5300
E: francesca.valente@frost.com
Share this article