ASEAN 3 auto aftermarket positioned for high growth, Frost & Sullivan says

April 9, 2014
The automotive aftermarket sector in the three largest ASEAN markets - Indonesia, Thailand and Malaysia - is positioned for high growth as millions of new vehicles enter the market, predicts Frost & Sullivan.

The automotive aftermarket sector in the three largest ASEAN markets - Indonesia, Thailand and Malaysia - is positioned for high growth as millions of new vehicles enter the market, predicts Frost & Sullivan.

Frost & Sullivan’s Strategic Analysis of ASEAN Automotive Aftermarket finds that the aftermarket parts market is expected to grow at a compound annual growth rate (CAGR) of 12.9 percent from 2010 to 2018.

Silka Yosa, Consulting Analyst, Automotive Practice, Asia Pacific at Frost & Sullivan predicts wiper blades to be one of the fastest growing segments in the automotive aftermarket sector due to the short life-span of the product. She said that wiper blades' replacement in ASEAN 3 could grow at a CAGR of 15.2 percent to reach $243.5 million in 2018.

"The growth rates for products such as wipers, clutches, compressors, filters and brakes are expected to be high, in the region of 13 per cent annually for the next 5-7 years, due to the boom in ASEAN vehicle sales," she added.

However, components such as starters, alternators, radiators and fans are expected to have a lower growth rate as their sales only peak when the vehicle reaches 8 to 12 years old, she said.

Yosa also said that it is common for vehicle owners to return to their respective authorized service centers for servicing and maintenance procedures due to warranty obligations in the first few years of ownership.

However, when a vehicle exceeds its factory warranty period, most people take it to an aftermarket shop for routine maintenance because of its lower pricing and usually better proximity, she said.

She also said that performance chemicals such as fuel or oil treatment additives are used to restore engine performance, provide cleaner injectors, improve fuel efficiency and overall engine protection.

However, ASEAN vehicle owners are generally skeptical about using such products unless they are endorsed or recommended by OEMs or service centers, Yosa said.

She added that most vehicle owners rely on recommendations by dealers or aftermarket service centers for replacement of vehicle parts and components.

"Vehicles under manufacturer warranty are bound by replacement of only original, approved parts. Consumers not bound by warranties generally opt for aftermarket parts due to pricing, but still consider factors such as brand, quality, and warranty when making a choice," she said.

She added that remanufacturers are successfully penetrating the ASEAN aftermarket, with recycled auto parts such as starters and alternators. "Sales of vehicle accessories such as in-dash navigation, electronics, and high-performance upgrades show strong growth among young driving population."

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