South Africa Automotive Aftermarket Industry, Forecast to 2023

South Africa Automotive Aftermarket Industry, Forecast to 2023

Growth of 5.5% Expected as Right to Repair Policy and Online Retail Will Force OEMs, Dealers, and Suppliers to Re-imagine Business Models and Forge New Partnerships

RELEASE DATE
27-Feb-2019
REGION
Africa
Research Code: 9AB2-00-D8-00-00
SKU: AU01805-AF-MR_22891

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$1,500.00

$1,125.00 save 25 %

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Description

This report is a synopsis of the trends and factors impacting the South African automotive aftermarket sector. It provides an economic analysis to assist the reader in understanding the economic backdrop against which the aftermarket is performing and being challenged. It is clear that the previous government’s maladministration of the economy led to its weakening and the rand’s depreciation, which has had serious knock-on effects for the aftermarket sector.

Another important element is the performance of the new vehicles sector and how vehicles in operation are being impacted. These variables have a direct effect on the performance of the aftermarket. Although the weakened economic climate has caused a decline in new vehicle sales, the vehicle parc has continued to show consistent growth. The parc has, however, aged with the average age of the South African passenger and light commercial vehicles rising to 12.2 years since manufacture. An aging parc generally incurs higher maintenance costs and therefore drives growth in the aftermarket.

The South African automotive aftermarket sector has exhibited strong growth since the early 2000s and is forecast to grown annually at 5.5% until 2023. Heightened levels of investment into the sector combined with new entrants, most notably small-sized businesses, have seen total revenue reach $6.6 billion in 2017. As a consequence of new entrants, concentration levels in the industry have dropped, thereby reducing any one company’s ability to control prices and effectively raising levels of competition in the industry.

Tires remain the largest generator of revenue in the industry while service parts and then parts and accessories follow closely. South Africa’s laggard status as an adopter of electric vehicles will mean that it remains oriented toward servicing and replacement parts while the advanced markets of the United States and Europe gradually move to toward electric components for the drivetrain. Authorised dealers constitute approximately 20 to 30% of the aftermarket sale of parts while the independent aftermarket distributors and retailers account for the lions share.

The introduction of the right-to-repair policy in South Africa is expected to have a significant impact on both the aftermarket retailers and the repairer industry. The policy aims to raise competition among industry players by reducing barriers to entry and ultimately, the price of servicing/repairing vehicles that remain under warranty from the factory. The local industry is faced with significant change; the rise of online retail and the right-to-repair policy will challenge businesses in the short to medium term. The adoption of new business models and establishment of new partnerships will be essential to achieving strong growth up to 2023.

Key Issues Addressed

  • What are the main factors that will influence the size and direction of the South African automotive aftermarket in 2018?
  • What are the changes in sales and VIO that have occurred since 2006?
  • What were the developments in the South African automotive aftermarket in 2017 and what is their impact?
  • What the outlook for eRetailing between 2018 and 2023?
  • What will be the emerging trends in the South African automotive aftermarket space between 2018 and 2023?

Table of Contents

Key Findings

Research Scope

Research Aim and Objectives

Key Questions This Study Will Answer

South African Automotive Aftermarket—Key Trends

Market Outlook

Market Outlook (continued)

Economic Growth and Stability

Key Variables

New Vehicle Sales

Vehicles in Operation

Vehicle Market

Market Size

Market Breakdown and Performance

Parts Breakdown

Income Breakdown by Parts Category

Top Aftermarket Suppliers

South African Automotive Aftermarket Structure

Key Distributor/Service Groups Compared

Automotive Aftermarket: Revenue Distribution

Distributor Profile: Africa Automotive Aftermarket Solutions

Distributor Profile: Autozone

Distributor Profile: World-Wide Automotive Group

Online Sector Overview

Right to Repair Overview

Growth Opportunity 1: Right to Repair

Growth Opportunity 2: Digitization of Capabilities

Strategic Imperatives for Success and Growth

Key Conclusions and Future Outlook

Legal Disclaimer

List of Exhibits

List of Exhibits (continued)

Acronyms Used

The Frost & Sullivan Story

Value Proposition—Future of Your Company & Career

Global Perspective

Industry Convergence

360º Research Perspective

Implementation Excellence

Our Blue Ocean Strategy

Related Research
This report is a synopsis of the trends and factors impacting the South African automotive aftermarket sector. It provides an economic analysis to assist the reader in understanding the economic backdrop against which the aftermarket is performing and being challenged. It is clear that the previous government?s maladministration of the economy led to its weakening and the rand?s depreciation, which has had serious knock-on effects for the aftermarket sector. Another important element is the performance of the new vehicles sector and how vehicles in operation are being impacted. These variables have a direct effect on the performance of the aftermarket. Although the weakened economic climate has caused a decline in new vehicle sales, the vehicle parc has continued to show consistent growth. The parc has, however, aged with the average age of the South African passenger and light commercial vehicles rising to 12.2 years since manufacture. An aging parc generally incurs higher maintenance costs and therefore drives growth in the aftermarket. The South African automotive aftermarket sector has exhibited strong growth since the early 2000s and is forecast to grown annually at 5.5% until 2023. Heightened levels of investment into the sector combined with new entrants, most notably small-sized businesses, have seen total revenue reach $6.6 billion in 2017. As a consequence of new entrants, concentration levels in the industry have dropped, thereby reducing any one company?s ability to control prices and effectively raising levels of competition in the industry. Tires remain the largest generator of revenue in the industry while service parts and then parts and accessories follow closely. South Africa?s laggard status as an adopter of electric vehicles will mean that it remains oriented toward servicing and replacement parts while the advanced markets of the United States and Europe gradually move to toward electric components for the drivetrain. Authorised dealers co
More Information
No Index No
Podcast No
Author Zaheera Ahmed
Industries Automotive
WIP Number 9AB2-00-D8-00-00
Is Prebook No
GPS Codes 9800-A6,9801-A6,9832-A6,9AF6-A6