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The Automotive Aftermarket

Posted on: 10-12-2015 13:14:09872


In the automotive industry selling processes are not limited to the initial ‘money for vehicle’ sale between a car dealer and a customer. In fact, automakers generate only 37% of their total revenues through this initial sale whereas the remaining 63% are earned in the automotive aftermarket.

This market focusses on the maintenance and repair of vehicles to ensure customers are purchasing durable consumer goods. Products and services which therefore share a direct relationship to the previously acquired product, e.g. the vehicle, are marketed in this area. These include wearing parts, body panels, motors, gearboxes, car glasses, oils, chemicals and tires amongst others.

As shown by the aforementioned percentages, this market plays a pivotal role in helping to ensure an automaker’s economic well-being. Due to the high volume of stock required to maintain old vehicles (the average age is 11.3 years) and increasing mobility rates in emerging countries, this market will continue to grow during the coming years. The competitive nature of this industry and the now synonymous price wars apparent within this field, will however make it harder for new entrants and increase the difficulty for existing players to even survive in this domain.

A study by Frost and Sullivan anticipates that changes in both technology and consumer behaviour are on the horizon; ‘in-vehicle’ sales and a switch to focus more heavily on female drivers just two examples. New technologies such as 3D printing will also add to supply chains complexity. E-commerce will therefore be viewed as increasingly important, especially under the pressure to provide day-to-day delivery. All of this will require stock optimization as well as the smooth execution of strategic guidelines in the operational business.

All market participants will need to improve their supply chains in order to remain competitive, but also to protect themselves from the future. A deluge of more complex supply chain networks is on the horizon, but most current landscapes will not be able to cope. New strategies for purchasing, selling and planning will be required to ensure that these new forms of production will leverage the full potential of ERP systems.

Complex links like future supply shortages have to be predictable, so that these insights can be used to make the right decisions in good time. The usage of predictive analyses to close the gap between strategy and operative business will become a success factor of higher significance than ever before. Every Angle offers a solution for all of this. Both retrospective causal analyses and real insights about future shortages are being made possible by connecting supply chain information. This results in the optimized execution of existing processes in the automotive industry. New supply chain challenges will then be measured by reality, not by the original process planning.

Sally Horlbeck
DACH Marketing Manager

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