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Advancements in Digitisation and Channel Expansion will Transform European OES Channel

2017-03-14 18:57
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-OEMs must expand growth strategy from brand dealerships to authorised workshops to drive profits, finds Frost & Sullivan's Mobility team

LONDON, March 14, 2017 /PRNewswire/ -- The European original equipment service (OES) channel is expected to generate revenues of 51 billion euros by 2022, based on the strength of new business models. However, Europe's vehicle market is aging, so OES channels must innovate their aftersales customer journey to compete with the independent aftermarket.

"OEMs are embracing new business models such as parts eRetailing, non-dealer network expansion, multi-brand parts to enhance the aftersales experience and draw customers closer," said Frost & Sullivan Mobility Program Manager Anuj Monga. "Luxury OEMs will benefit from telematics-backed aftermarket opportunities, and volume brands will benefit from independent aftermarket (IAM)-focused parts and services."

Strategic Analysis of the European Original Equipment Supplier (OES) Channel, part of Frost & Sullivan's Automotive & Transportation Growth Partnership Subscription, finds that the total authorised equipment supplier revenue at the dealer level will grow from EUR49.68 billion in 2015 to EUR50.73 billion in 2022.

Click here (https://goo.gl/N5vUqP) for complimentary access to more information on this analysis and to register for a Growth Strategy Dialogue, a free interactive briefing with Frost & Sullivan's thought leaders.

Key OEM strategies include:

  • Ford is expected to enhance its aftermarket brand, Motorcraft, in Europe.
  • PSA has invested in digital startups such as MisterAuto and AutoButler to expand its aftermarket reach.
  • Hyundai-Kia plans to launch a multi-channel eRetail platform in Europe, which will help lower its operational costs.
  • Volkswagen has created a direct route to the IAM in the United Kingdom through its TPS channel in a bid to earn a share of the IAM, which constitutes more than three-fourths of aftersales business in the region.
  • BMW could expand its own web store channel strategy outside of Germany, depending on the outcome of the current pilot project. It already has an eBay store that provides original replacement parts for its vehicles.

Other growth opportunities and trends include:

  • The European market will adopt a more flexible structure to directly compete with the IAM for 80 percent of passenger car vehicles in operation (VIO), which will be out of warranty by 2022.
  • The average vehicle age of passenger cars will grow from 9.73 to 10.73 by 2022.
  • Overall aftermarket revenue will grow at a compound annual growth rate of 1.9 percent due to the ageing vehicle parc; however, IAM is expected to gain about 1-2 percent market share from OES over the next seven years.
  • OEMs will keep an eye on legislation for in-vehicle data collection and communication, which will prove to be their next big strength in the European aftermarket.
  • The heterogeneous European network is shifting towards OEM authorised workshop contracts, which will allow for greater independence and potential to service multi-brand cars.
  • Mass-market European brands, such as Volkswagen, Renault, and PSA, constituted about 50 percent of the vehicles in operation in 2015.

"OEMs must focus on both brand dealerships and authorised workshops to drive profits and market penetration in a highly competitive and dynamic ecosystem," noted Monga.

Other topics covered under this subscription include competitive profiles of automotive aftermarket eRetailers in Europe, Europe private vehicle leasing market strategic analysis, global on-demand bus transit market, future of car retailing in Europe, and benchmarking of OEM strategies and eRetailing in the global automotive aftermarket. All studies in the subscription provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants. For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Contact us: Start the discussion

Strategic Analysis of European Original Equipment Supplier (OES) Channel
MCOF-18

Contact:
Jana Schöneborn
Corporate Communications – Europe
P: +49 (0)69 77033 43
E: jana.schoeneborn@frost.com

http://www.frost.com

Twitter: @FS_Automotive

Facebook: FrostandSullivan

Linkedin: Future of Mobility

Source: Frost & Sullivan
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