Page 33 - TTG-Taiwan Transportation Equipment Guide 2023-09 Edition

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Industry Trends

Oppor
Opportunities Abound: tunities Abound:

Emerging Trends Propel Automotive ging Trends Propel Automotive
Emer
After
Aftermarketmarket

By Andrew Hsu

The outlook for the automotive aftermarket appears placing a heavier burden on car buyers and forcing car
promising! According to a report by The Business owners to extend the service life of their vehicles. As a
Research Company, market size of the aftermarket result, the average age of vehicles roaming on roads
sector is projected to reach US$1237.49 billion by worldwide is increasing, and, in turn, market demand
2026, with a compounded annual growth rate of for repair and maintenance services is continuously
10.3%. Additionally, Grand View Research forecasts increasing.
the sector will witness a global compounded annual
growth rate of 4.0% from 2023 to 2030. Various signs Moreover, drawing on the rise of emerging
and data consistently indicate a flourishing market economies like China, India, Thailand, and Vietnam,
in the future, supported by the following summarized auto parts manufacturers are increasingly able to
reasons. provide the global aftermarket with more cost-eff ective
products. Also on advancements in production and
Slowdown of Global Economy logistics technology, manufacturers now have the
In 2022, Morgan Stanley’s research insights and ability to effi ciently deliver high-quality goods to even
analysis on the Global Macro Economy, titled “Even more distant markets.
Darker Before the Dawn” (Nov. 13, 2022), state that
the global economy is experiencing a rapid slowdown, Circular Economy in Action
and are teetering on the brink of a recession. Also, According to industry news released at AMPA
BCS-Barclays Plc further highlights that the year 2023 2023, the recent surge in the circular economy has
is anticipated to be the weakest year for the global become a significant driving force behind the growth
economy in four decades. of the automotive aftermarket. As a result, carmakers,
when designing new makes and models, have started
As anticipated, in early 2023, a series of recession to take modularization into consideration. This shift
signals emerged, including the decline in copper leads to a future where more and more automotive
prices, weakening freight rates, and the historic products are designed for easy disassembly, recycling,
inversion of the yield curve. Consequently, the global and reuse to comply with the fundamental principle
economy is gradually entering a recessionary period. of “maximizing resource utilization” in the circular
In response, global central banks, starting with the economy: materials and products can be shared,
Federal Reserve, have begun raising interest rates to rented, reused, repaired, refurbished, and recycled to
curb infl ation. Consequently, loan rates are on the rise, extend their service life.