MOVING FORWARD, STRONGER TOGETHER
Short-term challenges but optimism for the future
The 6th annual NEXUS Business Forum, N!BF 2020 in Amsterdam, once again demonstrated the friendship, openness and transparency that exists within the NEXUS Community, a progressive alliance that is strongly engaged with life as well a business.
Over this and forthcoming blogs we will share with you some valuable insights from automotive industry experts who attended N!BF 2020. Today’s blog highlights the presentation by Geng Wu, Associate Partner with the consultancy McKinsey.
We are facing a lot of short-term challenges. We do not know how the current situation will impact the aftermarket, but what we do know is where we are today and what the main projections are for the future.
We can view the long-term with some optimism and can look forward to a period of growth, despite some forecasts showing difficult years ahead for car sales. The car parc, however, will not decrease but will remain stable, due mainly to a shift in vehicle age.
There are some main trends we should have in mind when talking about the future: electrification, autonomous driving, shared mobility. The EVs component of the aftermarket will grow by 24% per year, in 2030 over 2% of the market will be related to batteries and over 2% of the business will be based on fleets. And of course, there will be increased demand for work-force.
There is no doubt that there is a transformation in the aftermarket, not only in the trend of parts and services but also in the technology used for components. Tyres and brakes will grow in the future and for each of the 108 components analysed by McKinsey, there’s a potential opportunity for suppliers and manufacturers over the next 10 years.
The industry is also living in a dynamic moment and the independent aftermarket is consolidating. So, what will the ecosystem look like in 2040 or 2050? What will be the market shares of OES and OEM?
The answer is not easy to predict, especially in times like these. As well as external factors, much depends on what people will do now and what will take in consideration on higher notes. The recommendation is to keep in mind four simple approaches:
1. There must be a shared vision of the industry – to compete with large stakeholders in the industry, a shared vision and target is required to grow each ecosystem equally
2. Also, broader collaboration to invest in and explore data, knowledge sharing and best practices
3. Talent management and recruiting, new generations will hit the market and to approach them it is necessary to create a new format, branding and communication
4. The aftermarket has a history of being stable and slow but in the future we will be required to be faster and dynamic, an aspect that is very important in building a successful future.
Geng Wu mainly advises clients from the automotive industry across functions and along the value chain. He holds a BSs from the Catholic University of Eichstätt–Ingolstadt, in Bavaria, as well as an MA from the University of St. Gallen, Switzerland. During his studies, Geng gained practical experiences as an intern at Bosch, P&G, and consultancies as well as a research assistant at the Centre for Customer Insight at the University of St. Gallen.