Automotive Repair and Maintenance Services Market Reflecting a CAGR of 5.8% During the Forecast Period 2017 – 2027
Future Market Insights (FMI) analysts forecast the global automotive repair and maintenance services market to grow at a steady annual growth of approximately 5.3% in 2019 to reach US$ 515 billion in revenues. Gains will be driven by a combination of multipronged factors, ranging from industry-specific factors such as increasing average vehicle age to macroeconomic factors pertaining to poor road infrastructure.
While the global automotive repair and maintenance services market remains fairly fragmented, key players including AAMCO Transmissions Inc., Asbury Automotive, Driven Brands, Inc., Sumitomo Corporation, and Goodyear Tire & Rubber Company are expected to spearhead the logistical and technological advancements to remain competitive, while offering a wide range of products and services.
According to FMI’s study, the overall growth of global automotive repair and maintenance services market can be attributed to:
- Increase in average age of vehicles given the automobile manufacturing improvements made in terms of technology and material.
- Poor road infrastructure in the emerging markets of Asia Pacific (Excluding Japan) leading to premature damaging of shocks and struts, suspension damage, steering system misalignment, and engine and exhaust systems.
- Expanding electric and hybrid vehicles production in U.S and Europe considering the recuperating automotive industry in these regions.
- Rising importance of regular servicing in a bid to ensure vehicle and passenger safety.
According to the study, broader trends such as small, locally owned repair shops partnering with insurance firms, leasing firms, and fleet owners, and increased adoption of remote vehicle diagnostic systems will continue to fuel demand for automotive repair and maintenance services.
“Considering advancing vehicle technologies and increasing focus on vehicle safety and connected cars, remote diagnostics systems have found increased adoption particularly in the commercial and utility vehicles, further enabling real time monitoring of vehicle parameters to assess its performance against benchmarks. The study projects higher adoption of remote vehicle diagnostics systems among fleet owners, as a means to detect on-board system failure modes and optimize vehicle maintenance schedules accordingly”, says FMI
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Automotive Repair and Maintenance Services Demand in APEJ Continues to Surge
The FMI study finds that the Asia Pacific (Excluding Japan) will continue to be the largest market for automotive repair and maintenance services. Unsurprisingly, China and India will remain at the forefront, with gains complemented by healthy growth in Australia. The number of vehicles on Australian roads is forecast to rise, lifting industry demand for automotive repair and maintenance services at a stellar CAGR of approximately 10%, over the forecast between 2018 and 2026.
Key insights from segmental analysis, include:
- In terms of services and parts, tires will hold approximately 1/3rd of the global revenues, in 2019, with wear and tear parts and collision body segments following suit.
- High replacement rate and increasing annual mileage per vehicle are the key contributing factors fueling demand for repair and maintenance services of tires.
- Automobile dealerships will generate maximum revenue in the global automotive repair and maintenance services market, considering increasing technical complexity in vehicles, closely followed by franchise general repairs stores.
- Approximately 70 percent demand for automotive repair and maintenance services will be concentrated in the passenger car segment.
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The FMI study also indicates that surging servicing and labor costs can restrict the global demand for automotive repair and maintenance services. Sensing the shift in demand for cost-effective services, automotive repair and maintenance service providers are pushing their offerings through extended warranties for new car owners and lifetime service packages at lower prices for the used vehicle segment.