New opportunities will emerge as vehicle parc set to exceed 10 million by 2022, finds Frost & Sullivanâ€™s Mobility team
The Kingdom of Saudi Arabiaâ€™s (KSA) automotive parts aftermarket is undergoing significant changes that are pushing companies to realign their business models with new conditions. Declining demand for new cars, growing competition, and change in brand preferences are opening up fresh business opportunities for parts suppliers, distributors, and retailers.
Frost & Sullivanâ€™s industry docket, Auto Component Aftermarket Outlook, Saudi Arabia (KSA), 2017, finds that despite current challenges, the market is set to experience an annual growth rate of 5.9 per cent from 2017 to 2022, with over 10 million vehicles in operation by 2022. The docket shows the potential of KSAâ€™s parts aftermarket across light, medium, and heavy vehicles, and the key forces behind future development, including vehicle sales and vehicles-in-operation changes. Additionally, it provides an insight into the existing part distribution structure, which will bring value to companies either already in the market or planning to explore the KSA parts aftermarket.
A macro-micro overview showcasing insights relative to global trends across industries is available for the Middle Eastern & North African (MENA) and South Asian (India) markets.
â€śFactors supporting medium- and long-term growth include evolving customer preferences toward leaner and more transparent distribution structures, recovering GDP, increasing motorisation rates, a growing population, and government sector diversification expenditure plans,â€ť said Frost & Sullivan Mobility Senior Consultant Vitali Bielski.
Customers are becoming increasingly more demanding. With significant competition, aftersales activities will become a crucial differentiator. To gain a competitive advantage in an evolving market, players should:
- Adopt new business models to cater to increasingly demanding customers;
- Distributors and wholesalers should actively explore retail channels and presence online;
- Sell accessories and mobility solutions; and
- Establish quick service centres, mobile services with optimised labour rates and menu pricing.
â€śFast moving parts like tires, batteries and lubricants account for the largest share of the parts market and at the same time show the highest intensity of competition attracting new brands,â€ť noted Bielski. â€śIn the future, there will remain strong growth opportunities for both OEM and independent aftermarket parts as private customers and fleets will seek ways to reduce total cost of ownership.â€ť
Analysis of the â€śIndian Auto Component Aftermarket Outlook, 2017â€ť is also available.
Â *Source: AETOSWire.