Digital Business Models Mitigating COVID-19 Implications on Global Aftermarket Performance in 2020
This study evaluates the trajectories of global economic recovery in the aftermath of the pandemic and elucidates the medium-term impact of muted demand and supply on aftermarket revenues for 2020. Taking the long-term view, the study also underscores growth opportunities and evolving business models that, if leveraged on, will aid the aftermarket’s resurgence when the global economy is restored to pre-pandemic levels.
According to Frost and Sullivan’s analysis, aftermarket revenue expanded by 4.1% in 2019. This was largely driven by a 3.2% growth in vehicles in operation, with the contraction in global gross domestic product (GDP) growth stifling consumer expenditure on new vehicle purchases. Slowdown in new vehicle sales also meant increased focus on the aftermarket from all stakeholders, more so from the OES channel, to sustain business at the dealer level by offering new vehicle services. This translated into the development of newer partnerships and evolution of newer channels to the market. For 2020, Frost and Sullivan had initially forecast a 4.0% growth in aftermarket revenues, with India and China leading the growth. The COVID-19 pandemic has put paid to these hopes, and the global automotive aftermarket will have to pull through headwinds that will result in the industry posting a de-growth, ranging between 4.9% and 11.6%, depending on the nature of the ensuing economic recovery across regions.
The study aims to gauge the severity of the impact of the ongoing COVID-19 pandemic on the global automotive aftermarket in 2020.
Although automotive sales had slackened in 2019, resilience from the global vehicle stock was expected to fuel growth opportunities for aftermarket stakeholders in 2020. With disruptions to businesses from fears of contagion snowballing into an economic crisis the world over, the aftermarket will also have to pull through its share of headwinds.
To ascertain the impact of the COVID 19 pandemic on aftermarket revenues across regions and part categories
To understand how the aftermarket ecosystem is responding to mitigate the impact of the pandemic on businesses
To determine the trajectory of post-pandemic recovery across regions and segments
To highlight the upcoming business models that will see adoption in the wake of the pandemic
KEY ISSUES ADDRESSED
What are the main factors that will drive and restrain the size of the global automotive aftermarket in 2020?
How will the virus’ impact on the general macroeconomic performance translate into the global automotive aftermarket business?
How does the effect of the pandemic on aftermarket performance vary from region to region?
What is the region-wise outlook for emerging growth opportunities such as digitization and sanitization services against the backdrop of the pandemic?
Which companies are likely to gain the first-mover advantage in the recovery phase owing to early reorientation in their existing business models?
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