Research PREVIEW for

Future of Parts and Service Retailing in the Automotive

Aftermarket

Value of E-Commerce Tools Shifts Online

Retailing of Automotive Parts and

Services to Full Throttle

Key Highlights

Source: Frost & Sullivan analysis.

1

China will be the most attractive market for revenue growth in digitization.

A perfect combination of high connectivity, strong sales and aftermarket growth, and overall

attitudes toward eCommerce will bring revenue opportunities through new business models.

2 OEMs and suppliers will increase direct retailing via digital platforms.

Upstream participants will position themselves better in downstream activities such as service,

aggregation, and retailing, especially in Brazil, Russia, India and China (BRIC) markets.

3 Many pure eRetailers and aggregators will be acquired by traditional participants.

Aftermarket participants such as distributors, retailers, suppliers, and original equipment

manufacturers (OEMs) will acquire startups and competitive threats to grow business.

4

Ten to 15% of all global parts revenue will be generated online by 2025.

Developed economies such as North America, as well as some developing economies such as

China and Brazil, will see high growth in the next 10 years.

5 By 2020, 2 out of every 5 parts sold in North America will be a private label.

OEMs, in particular, will use private labels and value brands to expand into the aftermarket as

they face greater pressure to increase profitability through dealership channels.

Key: OEM = Original equipment manufacturer; BRIC = Brazil, Russia, India, and China; VIO = Vehicles in operation

Aftermarket 2025—Key Impact Areas and Trends Convergence of business models from various impact areas will create the strongest value propositions for

customers in the future.

Channels

• eCommerce

• Marketplaces

• Aggregators

• In-vehicle Sales

1 Technology

• Telematics /

Connected Car

• 3-D Printing

• Augmented Reality

• Big Data

• In-store Technology

2 Service

• Subscription

• Remote

• Mobile/Express

• Participatory

3

Customers

• B2B (for eRetailers)

• Women Drivers

• Gen Y

5 Geography

• Urban Store

Formats

• Glocalization

(Expansion to BRIC

markets)

4 Products

• Electronics/

Software

• Private Labels

6

Source: Frost & Sullivan

New Entrants and Disruptive Models in the Aftermarket Traditional participants will need to invest or acquire new entrants in order to survive and grow.

Parts eRetailing

Marketplaces: Amazon, eBay,

Alibaba, Tmall, MercadoLibre

Supplier Direct eStores: Bosch

(Tmall)

OEM Direct eStores: BMW,

Suzuki (eBay)

Click n Collect Stores: Halfords

Connected Car

Remote Servicing: Tesla

Prognostics: General Motors

In-vehicle Retail Interfacing:

General Motors,

Continental

Aftermarket Connectivity

Solutions: Delphi (OBD-II)

New Service Models

Mobile Services: GO Tire

Mobile Vehicle Service:

yourmechanic.com

Quick Service: Ford Quick Lane,

Kwik Fit

Tires eRetailing Aggregator

Mobile Fulfillment: Allopneus Parts Aggregators:

finditparts.com

Service Aggregators:

Whocanfixmycar.com,

autobutler.de, Allogarage.fr

Suppliers Direct selling:

Goodyear

Participatory Services

Augmented Reality: AUDI, BMW,

Volkswagen

Source: Frost & Sullivan

The Connected Parts Store in 2025 The integration of available technology, to aid customer purchase pathways, and of evolving service channels

will help realize the retail store of the future.

Customized order

fulfillment options with

details available both

online and in-store

Conveniently

dedicated pick-up

space for click and

collect customers

Relaxed space for female

customers, single

mothers, particularly at

service centers Secure payment

options, self check-

out, pay-by-phone Electronic display of parts/virtual screens

with real-time information on pricing,

offers, availability

Self-service options

with clear directional

guidelines

In-store technology

inclusion such as

virtual assistants

Self-serving kiosks,

especially for

merchandising, DIY

customers

Attractive signage,

social media feeds

with customer

feedback

Trained female staff

targeting the increasing

number of female customers

On-call support, designated relationship

managers for premium customers

especially at service centers

Future of Automotive Parts & Service Retailing: Future Auto Parts Retail and Service Centre,

Global, 2025

Source: Frost & Sullivan

FUTURE PARTS RETAIL & SERVICE CENTER

The Full Analysis Features the Following Contents

Section Slide

Executive Summary 3

Research Scope, Objectives, Background, and Methodology 27

Top Transformational Shifts in Retailing and Their Impact on Aftermarket 34

Aftermarket 2025 Impact Area—Channels 43

Aftermarket 2025 Impact Area—Technology 58

Aftermarket 2025 Impact Area—Service 77

Aftermarket 2025 Impact Area—Customers 84

Aftermarket 2025 Impact Area—Geography 91

Aftermarket 2025 Impact Area—Products 101

OES Channel—Case Studies and Scenario Analysis 108

Independent Aftermarket—Case Studies and Scenario Analysis 117

Component Suppliers—Examples and Benchmarking 123

Conclusions and Future Outlook 131

Appendix 138

Key Questions This Study Will Answer

What are they key trends impacting the future of aftermarket parts and service retailing?

What are the current strategies for selling parts and services, among OEMs, suppliers, and

independent aftermarket participants?

What is the level of preparedness of each of the market participants in light of the evolving trends?

Future of Parts & Service Retailing Aftermarket: Key Questions This Study Will Answer, Global, 2014

What are the value propositions, strengths, and weaknesses of key competitors across different

channels?

What are the different dynamics of interest particular to each market across the globe?

1

2

3

4

5 Source: Frost & Sullivan

Research Methodology: Frost & Sullivan’s research services are based on secondary and primary

research data.

Secondary Research: This encompasses the extraction of information from existing reports and project

material within the Frost & Sullivan database, and includes data and information gathered form technical

papers, specialized magazines, seminars, and Internet research.

Primary Research: More than 10 interviews have been conducted over the phone by senior

consultants/industry analysts with original equipment suppliers, regulation authorities, and distributors.

Primary research accounts for 80% of the total research.

Company Company

BMW Whocanfixmycar.com

Ford Federal Mogul

NAPA Goodyear

AutoZone Allopneus

Michelin EuroCarParts

Research Methodology

Future of Parts & Service Aftermarket: Key Industry Participants, Global, 2011–2020

Source: Frost & Sullivan