Thursday, February 23 2012 :: Keywords: aftermarket report, aftersales, automotive industry reports, automotive research, car parts market, car repair, car servicing, market research :: Permalink

A few weeks ago the phone rang and one of our clients asked: “How much was the parts market worth in 2011?” It’s a seemingly simple question and we do keep track of the sales of replacement parts sold to end purchasers in the markets for servicing and mechanical repairs and car body repairs. But for 2011? And then there is the added problem of defining and measuring parts wholesaling.

With 2011 barely over, we are still collecting all the required data: therefore we could only quote ‘ball park figures’ based on mid-2011 surveys. The resulting estimate was a UK parts market value in the order of £13.5 billion (excluding VAT) last year.

For servicing and mechanical repairs, around £6bn of parts at end purchase prices were sold in 2011 including parts for dealer use (second-hand car refurbishment) and vehicle manufacturer warranty. This includes oils, tyres and DIY purchases for repairs but not accessories, car care, ICE and performance tuning. The car body repair market came in at approximately £3.5bn of parts sales, which includes paints and materials.

Thus together these two market segments amounted to about £9.5bn of parts sales in 2011. Compared to five years ago, and adjusting for RPI inflation, the sales value was up by over 3%. However, this is principally because of a nine per cent increase for servicing and mechanical repair parts while crash parts, paints and materials have apparently fallen by 5%.

As reported here previously, there has been a marginal increase in the servicing and mechanical repair market which accounts for some of the growth in servicing and mechanical repair parts. The devaluation of sterling will also have contributed by making imported parts increase in price above inflation.

The most difficult parts market to assess is wholesaling. Clearly by including the parts wholesaling sector, there is double-counting. Nevertheless wholesaling is a profitable activity and as such should be included in the total parts market potential.

It seems likely that parts wholesaling sales were between £4bn and £4.5bn in 2011, although cumulative turnover depends on how far up the chain you go. We tend to limit our measurements to the levels immediately above repairers. Around two-thirds of wholesale sales were ‘hard parts’ with the rest accounted for by tyres, oils, paints, etc.

Thus the parts market in 2011 probably exceeded £13.5bn and, of course, the aftersales market as a whole also includes labour sales as well as parts, oils, tyres, paints and materials. Quite possibly the whole aftersales market was in excess of £22bn in 2011.

That’s quite an opportunity, although the margins are relatively static and can be extremely keen in some areas of wholesaling. Also, the parts business is by no means straightforward. It is not an easy option and, again, these are just ‘ball park figures.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin.(See auto-retail.co.uk for subscription details.)

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