Mega trends and mega change

Jan. 1, 2020
Jeff Henning with Ernst & Young delved into some automotive megatrends that will “affect revenue, profitability and business models.”

CHICAGO —

Mega trends are calling for mega change in the aftermarket.

Jeff Henning with Ernst & Young delved into some automotive megatrends that will “affect revenue, profitability and business models.” From this focus, four themes emerged that are affecting not only the automotive industry, but the aftermarket in particular.

A push for safer, cleaner transportation

To aid individual mobility for the future, governments are regulating for enhanced vehicle diagnostics, safety technologies and enforcement of driver distraction laws, like banning cell phone use and texting while driving. From an environmental perspective, many are looking to regulate alternate powertrain infrastructure, changes in vehicle design and aerodynamics and fuel efficient technologies.

So what does this mean for the aftermarket? The aftermarket will have to upgrade employee skill sets, infrastructure and technical knowledge for manufacturing and servicing. It will need to strengthen relationships with OEMs to stay updated on changing technologies.

For environmental changes, the aftermarket will have to develop a flexible manufacturing system and supply chain. To mitigate regulatory risk, suppliers will need to diversify their product portfolio.

Telematics is an avenue for aftermarket growth

Many are relying on in-vehicle diagnostics to stay in tune with their car and what it needs, and these systems also help drive consumers to independent shops for maintenance and repair.

Telematics will help to improve safety and security and entertainment and connectivity.

“This is a huge purchase factor. It is what the consumer of the future wants. It will create significant opportunity. This is where the aftermarket is headed,” Henning says. “And the aftermarket has the opportunity to go in front of the OEM and take the lead because they can move quicker.”

Social media redefining aftermarket marketing, education

Social media is now fundamental to marketing, and this is a very inexpensive enabler for a two-way conversation with consumers.

“The ability to understand what the other side has to say is very important,” Henning says.

“Social media helps companies to understand who their customers are and what they are doing and saying. It identifies what information is valuable to your customers. It also allows you to keep an eye on your competitors.”

Consumers today are more willing that ever before to tell you what is on their mind, and the ability to have “strategic listening posts” is a great opportunity to better tailor your business for greater success.

Collaboration among industry stakeholders
“If there is going to be opportunities to take competitive advantage, a lot of those are sourced out of a collaborative effort,” Henning says “It is going to be the enabler for change and growth.”

Working together will help to improve costs, revenue and service levels.

Partnering with OEMs and suppliers allows aftermarket companies to try and meet vehicle customization and personalization needs.

Collaboration with manufacturers, retailers and installers will propel an understanding of how to deliver value to consumers and will further drive aftermarket success.

Collaboration with companies outside the automotive industry will help offer new opportunities to meet evolving customer demands.

“The key is to integrate all this information into your strategy and how you go to market,” Henning says.

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