The auto industry crisis hit the aftermarket in the top five European countries hard last year, slashing sector revenues by 9.3 billion euros or 2.7 percent as both volumes and unit prices fell, according to the London-based Datamonitor research firm.
Andrew Jackson, who follows the auto industry for Datamonitor, estimates that the crisis will lead to a shakeout of more than 15,000 of Europe's 906,000 aftermarket outlets by 2013 as smaller ones fail, merge or as chains pare the number of their service points.
A growing need to install more sophisticated machinery and hire expert mechanics as vehicles become more complex means that weaker outlets will find it increasingly difficult to stay in business, Datamonitor says.
“More skilled labor and more technical machinery is just all very costly,” says Jackson, Datamonitor's lead automotive analyst.
But Jackson says independent service chains stand to be clear winners from the auto-industry downturn.
“They traditionally undercut the prices of the automakers' service outlets, and savvy motorists are switching to them,” he said. “As such they should recover faster in the long run.”
Small repair shops with a neighbourhood identity also will do well if they are well capitalized and price competitive, he says, because many car owners are reluctant to drive far from home for service.
Despite the lingering effects of the recession, the aftermarket in the five biggest markets is set to grow 5.7 percent by 2013 to 204 billion euros, Datamonitor estimates.
Growing consumer confidence will boost sales and expand the total car parc by 6.4 percent to about 311 million units by 2013, the firm estimates. At the same time, parts sales are expected to increase by 6.3 percent to 126.4 billion euros while the demand for more skilled labor will increase shop-labor revenue by 4.9 percent to 78.5 billion euros.
“The largest amount of automakers' profit still comes from the aftermarket,” says Jackson. “It's the reason why most manufacturers are still alive.”