The Impact of the Top 3 Strategic Imperatives on the Automotive Aftermarket Industry

Competitive Intensity

Why

• GCC aftermarket is fragmented with the presence of several OEM and IAM brands.
• Chinese and Indian aftermarket branded parts are witnessing growth due to their low-cost and reliability.

Frost Perspective

• Following the COVID-19 pandemic, consumers have become more price-sensitive and are seeking cost-effective solutions for vehicle maintenance and repairs.
• Asian brands from China, Indonesia, Thailand, and India are offering reliable parts at lower cost.

Internal Challenges

Why

• The GCC region is highly reliant on imported vehicle components and parts, which leads to high cost.
• The lack of robust local manufacturing base is a major industry challenge.

Frost Perspective

• The Saudi Arabian government is encouraging both its own local automotive sector development and the establishment of local operations by global vehicle manufacturers.
• Saudi Arabia is planning to produce 300,000 vehicles domestically by 2030. This initiative aims to achieve multiple benefits, including the creation of jobs and upskilling opportunities, not to mention the strengthening of the country’s auto parts manufacturing supply chain.

Internal Challenges

Why

• Competition in the aftermarket is becoming fierce, with physical stores now having to compete with online platforms.
• Online service are connecting customers with medium and small garages.
• OEM service centers and garages have also developed online channels to reach the customers better.

Frost Perspective

• Online platforms offer higher visibility into the cost and availability of parts in the market.
• Online retailing of parts and service are expected to gain higher prominence in the coming years.
• Auto parts wholesalers and large retail are building online platforms to tap into this niche segment of customers.

Scope of Analysis

• This study provides an overview of the Gulf Cooperation Council (GCC) automotive aftermarket (for passenger cars and light commercial vehicles), including market size and structure. Aftermarket products include all non-warranty replacement parts installed after the initial sale of the vehicle from the dealer.

• Definitions:

  1. The PV parts aftermarket includes OEM dealership networks and independent aftermarket shops.
  2. Revenue includes parts and service labor.
  3. Revenue is measured at net level and is expressed in US dollars, unless otherwise noted.
• In GCC, the aftermarket is segmented into 2 areas: OE parts and IAM parts. OE parts are identical to the components installed at the factory when the vehicle was first manufactured. Most OE parts are sourced from OEMs. IAM parts are re-designed and engineered to replicate the original equipment fit, form, and function. They are marketed by independent parts manufacturers to warehouse distributors (WDs), retailers, and various service channels throughout the aftermarket.
• Revenue is resented at retail level, where the products are at the last level of distribution (purchased by end users); value in US dollars.
• The market size, by parts type is provided for the base year (2022) only at the GCC level, KSA and UAE markets. The market size, by parts type is not provided for Oman, Qatar, Kuwait, and Bahrain markets.

Segmentation

Automotive Aftermarket

Parts

• Tires
• Batteries
• Lubricants
• Brake Parts
• Filters
• Spark Plugs
• Wiper
• Starters & Alternators
• Other Mechanical & Repair
• Other Collision
• Services

Country

• Saudi Arabia
• UAE
• Oman
• Qatar
• Kuwait
• Bahrain

Note: The scope of the study includes vehicles only intended for passenger carrying. The market size information is provided for parts segment for 2022.

Competitive Environment

Key Competitors

• Burj Al Maqasir Trading Co. LLC
• KAPICO Group Holding Co. KSCC
• Diamond Auto Spare Parts LLC
• Zubair Automotive Group
• Global Auto Parts W.L.L.