Mexico Automotive Aftermarket demand valued at over USD 34 billion in 2017 and the industry is predicted to grow at a CAGR of around 5% up to 2024.
Increasing requirements for regular maintenance, upgraded accessories and automotive components for enhancing the vehicle performance will fuel Mexico automotive aftermarket growth. Also, increase in the average distance driven per vehicle owing to changing lifestyle and rising requirements for travelling long distance have resulted in increased wear and tear. This in turn has escalated the maintenance and replacement rate of automotive parts, thereby positively influencing the industry growth.
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Motor vehicle production in 2017 was 4.07 million units in comparison to 3.60 million units in 2016, witnessing an increase of 13.0% across Mexico region. Proliferating vehicle production to meet the transportation requirements across the country is expected to fuel the business growth. Escalating number of vehicles on road are among the major causes of increased traffic congestions and road accidents. For instance, in 2015, Mexico witnessed 16,039 road fatalities. Road accidents will drive the requirement for replacement and repair of vehicle components and in turn will surge the industry growth.
Augmenting internet usage will help the automotive sector to establish its foothold in the e-commerce trade, resulting in proliferated sales of vehicle parts owing to easy availability. For instance, in 2017, Amazon India launched “Checkfit & Garage” feature for simplifying the purchasing of suitable automotive parts and accessories. The ease of ordering online and simplicity in the process of purchasing the product will escalate the e-commerce business growth.
Large count of used cars across the region is among the major growth factors for Mexico automotive aftermarket. For instance, in 2016, International Trade Administration reported that an average Mexican consumer owns a 14-year-old vehicle. Additionally, over 50% of the total vehicles are approximately 10 years old. Poor road infrastructure and old vehicles have put substantial strain on the vehicle performance and are expected to positively influence the growth of replacement parts segment.
Stringent government regulations to minimize carbon emission have resulted in increased need for automotive vehicles maintenance. Increasing requirements for compliance with government norms and providing quality vehicle parts will present favourable growth landscape. However, accessories and replacement parts used in vehicles are made from raw materials including iron, aluminium and steel. These materials have witnessed significant price volatility over the past few years, is expected to hinder the Mexico automotive aftermarket industry growth.
Mexico automotive aftermarket replacement parts segment will witness noteworthy growth from 2018 to 2024. It can be attributed to increased parts replacement requirements owing to reduced vehicle performance, high wear and tear, and damaged caused in road accidents. Moreover, significant presence of old vehicles in parc and lack of proper road infrastructure are expected to present considerable growth demand over the forecast period.
Accessories demand is expected to witness significant gains over the forecast timeframe owing to increasing consumer inclination towards high comfort and attractive vehicle aesthetics. Growing demand for vehicle customization for enhancing the functionality and performance of the vehicle is expected to present strong growth landscape over the forecast timeframe.
Mexico automotive aftermarket by professional channel segment dominated the market size, owing to high profit margins and attractive revenue. Improved product quality, reliability, warranty, and facilities including drop and pick on discounted rates have positively influenced the customer confidence. Moreover, auto manufacturers are key service provider of aftermarket products. High consumer reliance on these vehicle manufacturing market participants will in turn provide strong growth prospects for the professional channels.
Do-it-yourself (DIY) segment will observe highest CAGR over the forecast timeframe owing to its easy availability and cost-effectiveness. Accessing professional services for replacement of small parts requires significant efforts and capital. Availability of DIY kits eases the effort and capital requirement. Moreover, industry participants are increasingly involved in addressing the consumer queries through online portals which in turn will accelerate the Mexico automotive aftermarket industry growth. OEM’s contributed significant industry share in 2017, owing to surge in increasing automobile warranties, digitization of auto repair & maintenance services, and increased usage of advanced technologies for auto part repairs.
Some of the major Mexico automotive aftermarket participants include Continental AG, 3M Company, Delphi, Federal-Mogul, Denso, Magneti Marelli, Robert Bosch, and Cooper Tire & Rubber Company. Manufacturers are increasingly focussing on R&D activities for expanding their regional presence and production facilities across the economy. For instance, in 2017, Nexteer Automotive and Continental AG entered into a joint venture for working on advanced steering and driver assistance for automated vehicles.
Aftermarket deals in distribution, manufacturing, retailing, remanufacturing, and installation of vehicle components after the sale of vehicles. Mexico automotive aftermarket is led by growing production demands and annual sales of passenger and commercial vehicles. Augmenting requirements for enhancing the vehicle life and reducing the carbon emissions have fuelled the Mexico automotive aftermarket industry size.
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