European Automotive Aftermarket Becoming Increasingly Important for Taiwan-made AM Auto Parts: ARTC
2015/10/21 | By Quincy Liang
The U.S. has been the primary export target for Taiwan-made aftermarket (AM) parts since the 1980s; but exports to Europe has been increasing alongside rising acceptance in the expanding region. The European automotive sector is generally seen for upholding relatively higher standards in manufacturing, quality as well as eco-friendly codes related to production.
Quoting data released by Frost & Sullivan, the Automotive Research & Testing Center (ARTC), a key vehicle testing and R&D institute in Taiwan, says that the overall automotive aftermarket in Europe is valued about 96.42 billion euro, translating into about 27.3 percent of the global overall.
Germany has the largest automotive aftermarket, accounting for 15 percent of Europe's overall, compared to Italy (13 percent) and Russia (12 percent). In Europe, ARTC says, aftermarket conditions vary from one nation to the next, due to differing vehicle ownership volumes, average vehicle age, economic conditions, consumer preferences, etc.
Germany
Germany takes the lead in vehicle ownership volume and aftermarket value among all European countries. In 2014, there were some 44.6 million licensed cars in the nation with average vehicle age of 7.3 years, the lowest in Europe. The leading automobile brand in the country is Volkswagen (VW), with a market share of 35.7 percent.
Frost & Sullivan forecasts that total car ownership in Germany will top 47.8 million units by 2020 with compound annual growth rate (CAGR) of 1.2 percent, when the aftermarket scale will reach 16.37 billion euro, translating into CAGR of 2.1 percent.
Italy
Italy now has about 37.7 million licensed vehicles on the road with average vehicle age of 10.9 years. Due to the nation's relatively weaker economic health, market shares of compact and sub-compact cars are expected to continue going higher over the next few years. Frost & Sullivan estimates there will be about 39.1 million licensed cars in the nation by 2020 (CAGR of 0.6 percent), and the automotive aftermarket will grow at CAGR of 1.7 percent to 13.65 billion euro.
Russia
With about 38.9 million licensed automobiles, Russia now is the second-largest automobile-ownership country in Europe, with the average vehicle age in the nation of 11.5 years, the longest in major European automobile markets. The high growth rate of new-car sales in Russia also drives strong demand for aftermarket auto parts. Frost & Sullivan predicts that by 2020 Russia's automotive aftermarket scale will top 15.68 billion euro, and the vehicle ownership volume will reach 45.2 million units (CAGR of 2.8 percent).
France and the U.K. each now has about 32 million licensed automobiles with average vehicle age of 8.4 years, lower than Europe's average of 9.4 years. By 2020, Frost & Sullivan forecasts that licensed-car volumes in the two nations will be about 33.9 million and 34.1 million, respectively; while both nations' automotive aftermarkets will reach a similar scale of about 11.8 billion euro. France and the U.K., then, will be the fourth- and fifth-largest automobile markets, respectively.
Spain now has about 22.9 million licensed cars on the road, but the nation is expected to be more seriously affected by economic factors that might lead to sub-1-percent new-car sales growth over the next few years. By 2020, Spain's automotive aftermarket is forecast to be valued about 8.33 billion euro.
| Major European Automotive Aftermarkets | ||||||
| Country
| 2014
| Average Vehicle Life
| Largest Auto Brand (Market share)
| 2020
| ||
| Licensed Vehicles
| After- market
| Licensed Vehicles
| After- market
| |||
| Germany
| 44.6 M.
| 14.51 B.
| 7.3
| VW (35.7%)
| 47.8 M.
| 16.37 B.
|
| Italy
| 37.7 M.
| 12.39 B.
| 10.9
| Fiat Chrysler (29%)
| 39.1 M.
| 13.65 B.
|
| Russia
| 38.9 M.
| 12.31 B.
| 11.5
| Renault-Nissan (34.7%)
| 45.2 M.
| 15.68 B.
|
| France
| 32.5 M.
| 10.64 B.
| 8.4
| PSA Group (32.5%)
| 33.9 M.
| 11.82 B.
|
| U.K.
| 32.3 M.
| 10.54 B.
| 8.3
| VW (15.9%)
| 34.1 M.
| 11.94 B.
|
| Spain
| 22.9 M.
| 7.54 B.
| 11.1
| VW (22.8%)
| 23.7 M.
| 8.33 B.
|
| Source: Frost & Sullivan, ARTC
| ||||||
According to ARTC, German consumers have the highest brand loyalty in choosing after-sales auto services. Currently, about 40.9 percent of car owners repair and maintain their vehicles at original vendors' service chains. In all other European nations, especially in Russia, Italy and Spain, most car owners choose to repair and maintain their vehicles at different auto-parts distributors or independent repair shops.
In general, ARTC says, sales of AM replacement auto parts in Europe are showing stable and incremental growing trends; while consumers in the region are showing an increasingly higher acceptance of AM auto parts. The Taiwanese automotive center also adds that the increasing popularity of e-commerce platforms is also compressing the market shares of auto vendors' service chains, to create more and more business opportunities for Taiwan-made AM auto parts.
Statistics compiled by the Taiwan Transportation Vehicle Manufacturers' Association (TTVMA) show that some major European nations, including the U.K., Germany, Netherlands, Italy, etc., are major exports markets for Taiwan-made AM auto parts. In 2014, Taiwan exported about NT$25 billion (US$833.3 million) worth of auto parts to Europe, and the value is expected to further grow, ARTC says.