Looking at the next 15 years of automotive aftermarket sales
The global automotive industry is on the cusp of a massive transformation. With megatrends likely to redefine the future of car sales and the automotive aftermarket worldwide, this study seeks to quantify trends’ effects and opportunities for original equipment manufacturers (OEMs)—while providing strategies and approaches to navigate the dynamic and challenging transition.
To get a clear picture of current industry trends and their implications for the future of car sales and the automotive aftermarket, including impact on OEM revenues and profit, this study seeks to answer the following key questions:
How will trends affect traditional business segment's vehicle sales and aftersales?
What are opportunities and risks involved with new business segments such as mobility and digital services?
When and how will these developments and trend effects differ across core markets?
Key takeaways from the study
Without significant transformation, OEMs will likely struggle to remain as profitable as today in 2035.
Highly profitable aftersales business may suffer from the strong negative impact of electrification. As a result, total business will likely decline by 10 percent despite growing car parc by more than 50 percent.
More than 80 percent of total growth would be generated in the Chinese market. Europe, the United States and Japan are expected to show only moderate growth.
Only very few players will win the race for mobility services and only a strong emergence of current industry trends will make mobility as a service an attractive revenue stream.
The study underlines the enormous pressure on car manufacturers to act. This pressure was already high before the coronavirus outbreak—it will further increase the need for transformation in the industry. As a result of the coronavirus pandemic, we expect the developments forecasted in the study to occur faster and more intensively.
Trend analysis and forecast of industry drivers
For each automotive trend, Deloitte forecasts a base case and a disruptive case of trend emergence. This reflects different manifestations of consumer, business, technological, and regulatory forces and lays the foundation for a nuanced assessment of trends. The study focuses on industry drivers with the highest potential for disruption, ultimately resulting in four main trends that will shape the future of car sales and the automotive aftermarket until 2035:
By 2035, the connectivity of both cars (connected car) and customers/drivers (connected customer) will differ significantly across markets driven by technical infrastructure and consumer preferences.
See graphic: Share of cars with V2X functionality for new vehicle sales in 2035.
In the future, various drivetrains will coexist, with battery-electric vehicles leading the way. The emergence of alternative drivetrains is mainly driven by decreasing production costs, regulation, charging infrastructure, and increasing performance.
See graphic: Share of cars with alternative drivetrains for new car sales in 2035.
Shared mobility will increase the utilization per vehicle and shift ownership from private customers to fleet operators. Growth in mobility services is expected with the emergence of autonomous driving.
See graphic: Utilization per vehicle measured in average kilometers driven per year in 2035.
The largest technological hurdle lies between level 3 and level 4 autonomous driving. The expectation is that at least level 4 is to be applied initially in specific use cases only.
See graphic: Share of autonomous vehicles (level 4/5) for new vehicle sales in 2035.
See graphic: Advanced driver-assistance systems (ADAS) levels–overview.
About Deloitte Technology, Media & Telecommunications
To ensure sustained business growth, it is critical that organisations address the increasing disruption posed by emerging technologies. Deloitte’s Technology, Media & Telecommunications (TMT) industry practice brings together thought leaders and trusted specialists to shape many of the world’s most recognised brands in these fields. Through its work, the TMT team aids clients in creating competitive advantage and helps them succeed in an increasingly digital world.
Deloitte Global’s annual TMT predictions serve as guideposts for future business strategy by providing a 1-5 year outlook on key trends in the global technology, media, and telecommunication industry sectors. The trends help identify key challenges and areas of focus for the world’s TMT brands as they navigate the impact of new technologies shaping the future of industry.
To learn more about Deloitte’s TMT practice and its signature piece of thought leadership, connect with us on Twitter at @DeloitteTMT or at www.deloitte.com.
As an integral part of this study, a model to assess the quantitative implications of possible future states on OEM revenues and profit pools was designed. For each revenue stream, in both new and traditional business segments, it analysed how levers react to the emergence of industry trends in order to calculate OEM revenues and profits.
Create transparency to make profound decisions
As an initial step, the study recommends that OEMs create full transparency about how industry trends affect their business, today and in the future. OEMs are encouraged to take the report analysis of the proxy OEM and carefully adapt it to the specificity of their own business.
Ensure enablers are in place
Whether OEMs aim to participate in new business segments or not, in order to respond to technological advancements, the transformation of current products and processes is imperative.
Ensure omni-channel capability
OEMs have to significantly transform their current stationary sales and after-sales network regardless of the future-state scenario. This includes various fundamental sales transformation changes.