ASEAN AUTOMOTIVE AFTERMARKET SIZE, TRENDS, SHARES, INSIGHTS AND FORECAST - 2027 ANALYSIS

1. Coherent Market InsightsMarket Research and Business Consulting Serviceshttps://www.coherentmarketinsights.comASEAN AUTOMOTIVE AFTERMARKET SIZE, TRENDS, SHARES, INSIGHTS AND FORECAST - 2027 ANALYSIS

2. Market Overview • The automotive aftermarket is the secondary market of the automotive industry which deals with manufacturing, remanufacturing, distribution, retailing, and installation of vehicle parts, equipment, chemicals, and accessories. This is done after the sale of the automobile by the original equipment manufacturer (OEM) to the consumer. The automotive aftermarket deals with oil and lubricants, batteries, tires, filters, starters and alternators, coatings and paint consumables, exhaust components, spark plugs, crash parts, etc. Moreover, there are interior and exterior accessories including audio/video devices, steering wheels, parking brake handles, shift boots, grills, headlight covers, front & rear guards, mirrors, etc. Consumers can repair their vehicles on their own with the DIY segments or can take the vehicle to professional repair facilities. • The ASEAN automotive aftermarket was accounted for US$ 25,250.2 Mn in 2019 is expected to exhibit a CAGR of 9.7% during the forecast period.

3. Market Dynamics- Drivers • Growing disposable income and rise in the vehicle part is expected to drive growth of the ASEAN automotive aftermarket during the forecast period • Increasing vehicle demand and rapidly rising urban population density are expected to boost ASEAN automotive production output. Disposable income in ASEA has increased significantly and as a result of this, consumers’ expenditure on automotive parts is increasing thereby boosting automotive sales. This, in turn, has led to increasing vehicle parc and thus a rise in demand for aftermarket services. Moreover, proactive government policies such as First Car Scheme policy (2012-2013) by Thailand government under which first time car buyers are provided with tax rebate of up to US$ 3,250. This led to a 33% increase in vehicle sales in Thailand in 2012-2013.  According to OrganisationInternationale des Constructeursd’Automobiles (OICA), the sales of passenger cars  in Singapore increased from 17,197 units in 2012 to 43,423 units in 2016 while that in Philippines the sales rose from 21,860 units in 2012 to  62,560 units in 2016. Therefore, these factors are expected to drive the market growth in the near future. • Poor quality of road infrastructure is expected to propel the ASEAN automotive aftermarket growth over the forecast period • The road infrastructure quality in emerging economies from ASEAN is not adequate. Poor quality of road infrastructure leaves a negative impact on the life and parts of vehicle. A pothole can cause a severe impact that can lead to damaging of wheel rim and tires. Moreover, pits on the road can lead to premature wears and tears on struts and shocks, steering system, suspension damage, misalignment, exhaust system damage, or damage to the engine. Some countries in ASEAN have extremely poor road infrastructure quality, which leads to more wear and tear thereby requiring the need for replacement of parts. Thus, such factors are expected to propel the ASEAN automotive aftermarket growth over the forecast period.

4. Indonesia country dominated the ASEAN automotive aftermarket in 2019, accounting for 34.5% share in terms of value, followed by Thailand and Malaysia, respectively

5. Market Dynamics- Restraint • High replacement and maintenance cost is expected to restrain growth of the ASEAN automotive aftermarket during the forecast period • Increasing technical complexities of the vehicles, cost of replacement parts, and maintenance costs are the major factors impacting growth of the market. Moreover, cost of tools and equipment has increased in the recent past, due to advancements in replacement parts. These factors combined with increasing labor costs and reluctance of customers to adapt to these high-cost parts are expected to restrain the market growth in the near future. According to the primary interviews conducted with key opinion leaders, the annual passenger car maintenance cost per unit is expected to increase up to 2X over the forecast period. • Inconsiderate attitude towards maintenance and services is expected to hinder the ASEAN automotive aftermarket growth over the forecast period • In emerging countries from ASEAN, cars owners are unwilling to invest in preventive maintenance, which leads to high costs. Majority of owners get their car serviced and parts replaced under the warranty period. However, after this period, service frequency increases significantly. This is typically due careless attitude of vehicle owners towards safety of vehicle and focus on saving additional expenditure in maintenance. Thus, these factors are expected to hinder the ASEAN automotive aftermarket growth over the forecast period.

6. Market Opportunities • Increasing demand for used-cars in Thailand can provide lucrative growth opportunities • The number of warranty vehicles in Thailand is expected to increase, owing to large inventory created by the increase in sales of vehicles in 2012 under the first scheme policy. According to Coherent Market Insights’ analysis, while Bangkok is the most lucrative market for independent aftermarket services, the demand for North-Eastern regions is expected to increase in the near future. Moreover, according to a survey conducted in Thailand, the used car dealership owners are pairing up with finance companies to grant loans hence there is expected to substantial increase in the Thailand aftermarket. • Major business opportunity for locally-owned repair shops • Majority of local repair shops do not offer a complete range of repair and maintenance services. Thus, shop owners can follow a competitive strategy of providing specialist service or they can increase number of services they are providing. Moreover, small shop owners can enter into partnerships with fleet operators and leasing firms to provide lucrative replacement and maintenance services at lower prices. According to Coherent Market Insights’ analysis, there are over 5,000 independent repair shops in Thailand.

7. Market Trend • Adoption of self-inflating tires is an emerging trend in the market • Inflating a tire beyond a limit can result in wear and tear while not having enough pressure. As a result of this, companies such as the Goodyear Tire and Rubber Company have produced self-inflating tire system, which can maintain the pressure at preferred levels. The self-inflating tire system works on air maintenance technology, which utilizes peristaltic pump to maintain the pressure Most of car owners are focused on adopting self-inflating tires system, in order to avoid unnecessary maintenance costs. • Advent of silicon anode batteries in electric vehicles is another major trend in the market • Silicon anode batteries have greater energy density and enhance battery life. This is due to growing focus of automotive manufacturers on incorporating these batteries in electric vehicles. The use of silicon anode batteries could significantly improve battery life, which is why it is gaining popularity among OEMs.

8. Segment Information In ASEAN automotive aftermarket, by vehicle type segment, passenger car sub segment dominated the ASEAN market in 2019, accounting for 73.1% share in terms of value.

9. Competitive Section • Key players operating in the ASEAN automotive aftermarket are Bridgestone Corporation, ACDelco, Denso Corporation, Aisin Seiki Co., Ltd., HellaKGaAHueck & Co., BorgWarner Inc., Robert Bosch GmbH, Continental AG, MagnetiMarelliSpA, Delphi Automotive PLC, and Faurecia SA.

10. Key Developments • Key players operating in the market are focused on product launches, in order to enhance the product portfolio. For instance, in ACDelco, a U.S.-based provider of automotive parts introduced its ‘Cabon Air Filter’ at ACMA Automechanika. • Major market players are involved in contracts and agreements, in order to gain competitive edge in the market. For instance, in December 2018, Aisin Seiki Co. Ltd. entered into an agreement with Denso Corporation to form a new company, ‘BluE Nexus’ to develop and sell driving modules for electric vehicles.

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