The automotive aftermarket glass industry has been experiencing significant changes with increasing customer expectations, speeding up technological innovations, as well as competitive power shifts. These transitions have reshaped how customers, automotive suppliers and other aftermarket companies think about cars and driving, and how business is handled and value is created in the automotive aftermarket.
Emerging technologies and significant shifts in the automotive aftermarket glass industry will be game-changing factors that all players need to react to now to keep strong positions in the future. Most industry experts believe that significant changes are coming, the effort to create a broad picture of the most important developments that threaten the European aftermarket from the viewpoint of the automotive manufacturers and ideas on how to deal with them.
Automotive glass is available in the form of laminated glass and tempered glass. Laminated glasses are used for the windshield, while tampered glasses are used for the side and back windows. The main intention behind engineering automotive glass is ensuring better visibility, protection from outside weather like fog, sunlight, and rain.
Furthermore, it is a barrier to external noise and provides improved aerodynamics. Strict rules and regulations of the government regarding passengers’ safety have driven the production of the automotive glass. Also, a rise in the number of the population having disposable income and technological innovations in developing countries is fueling the developments in the industry.
As the aftermarket continues to grow, more consolidation can be anticipated. Among the different industry participants present worldwide, the highest consolidation pressure currently exists on the parts distributors who need to reach critical mass and utilize economies of scale (e.g., size of consumer access and sales volume). Automotive aftermarket players, on the other hand, are taking various consolidation-related steps to protect and broaden their postmarket positions further. Distributors of parts, as well as buying groups, seek M&A to increase their size and create an international footprint.
As the age of vehicles grows, the aftermarket sector of OEMs has become increasingly under pressure when their market share in older age segments declines significantly and other players demand their piece of the pie. Although more than 50 percent of passenger cars younger than two years are serviced in the OEM network, this figure for vehicles older than eight years falls to about 15 percent.
The figures are even harder for OEMs in emerging markets due to the higher average age of the vehicles. Although the aftermarket has been one of several OEMs' strategic focus areas for several years now, the level of activity and emphasis on the aftermarket has dramatically increased. Many OEMs are beginning to strongly occupy one or more spaces within the value chain of the aftermarket by developing their networks of non-car brand-specific repair shops for example.
Online channels are acquiring increasing influence in the research and procurement processes of customers–in both developed and emerging markets. Customers switch to online communities and feedback as a way to enhance their purchasing decisions, among many other digital platforms. There are already several platforms for selling online parts. Suppliers, OEMs, distributors, and chains of workshops will continue to increase their engagement online and to launch new channels.
Going digital would allow the industry giants in the automotive aftermarket glass industry to further increase the value of the automotive aftermarket as connectivity enables them to move closer to the end-user and produce big data. With the car turning into a platform for software and applications, however, income could transfer to tech giants or new software entrants. Traditional parts manufacturers, retailers, and workshops may be under pressure as OEMs, intermediaries, and online providers may attempt to maximize their impact on end customers, the player margins accustomed to the full end customer attention.
The automotive aftermarket glass market as a whole is impacted by various disruptions, in particular digitization, transferring competitive dynamics, and modifying consumer preferences. Looking at digitization, for example, the adoption of smartphones has allowed new mobility services, such as e-hailing, while a large share of car-related search and purchase of information has moved online.
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Various patterns are emerging in terms of the evolving competition structure alongside the consolidation of parts distributors and other developments which have been evident for some time now. Firstly, new players are starting to enter the automotive market and existing companies are changing their business models–a phenomenon that will continue in the future. Young generations are far less interested in car ownership when it comes to consumer preferences, while more stringent emission standards give rise to electric vehicles.