Original equipment manufacturers (OEMs) are playing a pivotal role in shaping the dynamic landscape of the evolving aftermarket mobility domain. They are persistently establishing fundamental benchmarks for quality and safety, wielding a profound influence across the entire ecosystem. Despite encountering formidable competition from independent parts manufacturers, trailblazing OEMs are influencing not just the accessibility and quality of spare parts but also steering the course of technological advancements, sustainability endeavors, and customer interactions. They are progressively adopting an ecosystem-centric strategy, engaging in collaborations with diverse stakeholders to foster inventive solutions such as data-driven maintenance and connected repair platforms.
Here in this story, we examine how OEMs are actively fostering an environment that nurtures the development of the global aftermarket ecosystem.
How is your team collaborating with ecosystem players to foster growth in the global aftermarket industry?
Fuelling Technological Advancements and Innovation:
OEMs are consistently expanding the horizons of technological innovation within the automotive ecosystem to enhance vehicle performance, safety, and efficiency. Their progress extends to the aftermarket industry, where they strive to provide consumers with cutting-edge components. Take the example of Gulf countries, which are witnessing a spurt of independent aftermarket players integrating state-of-the-art equipment and offering cost-effective solutions to authorized service centres.
Is your team analyzing how OEMs are innovating across regions to align with automotive ecosystem megatrends?
Steering Sustainability Initiatives:
In an era characterized by increasing emphasis on environmental awareness, OEMs are spearheading sustainability initiatives with an aim to decrease the carbon footprint of the aftermarket industry. These automakers are working aggressively towards managing the environmental impact of auto-parts disposal, and vehicle reuse. They are also implementing innovative best practices across vehicle remanufacturing, recycling, and end-of-life activities.
Hyundai & Kia Sustainability Developments and Partnership Ecosystem
- Hyundai & Kia, as a part of the Supplier CO2 Emission Monitoring System, plan to use blockchain technology and artificial intelligence (AI) to monitor carbon emissions at every supply chain stage, collecting carbon emissions data in the process.
- The company works with tier I suppliers in establishing supplier Environmental, Social, and Governance (ESG) risk management assessments and setting preventive goals to avoid risks along the supply chain.
- It evaluates suppliers based on quality, technology, supply stability, and sustainability by conducting audits and providing environmental management system certification and training programs to
tier I suppliers globally.
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Driving Quality Assurance and Standardization:
One of the primary impacts of OEMs to the aftermarket mobility industry is establishing of stringent quality standards. As manufacturers of original vehicles, automakers are setting the benchmark for performance, quality, safety, and reliability to name a few. This commitment to quality ensures that aftermarket parts and services meet the same rigorous standards, assuring consumers of compatibility and dependability.
Standardization on the other hand is crucial for maintaining the reliability of vehicles. This not only profits consumers by ensuring the longevity and performance of their vehicles but also nurtures a competitive aftermarket ecosystem where various providers stick to common standards, facilitating interchangeability and ease of access for consumers throughout the value chain. For example, the implementation of the Bharat Stage Emission Standards 6 (BS-VI) in India, resulted in many OEMs deciding not to sell diesel vehicles, impacting diesel powertrain part sales.
In Focus – India
- While multi-brand service chains pose significant competition to the original equipment suppliers (OES) channel in vehicle servicing due to their robust quality brand image, their impact is constrained by limited presence.
- The absence of quality standards and regulations in the aftermarket is prompting an increase in local manufacturing and the import of inferior parts.
- Substandard parts and cheap imports from China are causing an adverse impact on the sales of quality parts especially in the northern and eastern parts of India.
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Is your leadership team implementing best practices in the aftermarket space to drive growth?
About Frost & Sullivan
Frost & Sullivan, the growth pipeline company, enables clients to accelerate growth and achieve best-in-class industry positioning in terms of innovation and leadership. The company’s ‘Growth Pipeline-as-a-Service’ provides corporate management teams with transformational strategies and best-practice models that catalyze growth opportunity generation, evaluation, and implementation. Let us coach you on your transformational journey, while we actively support you in fostering collaborative initiatives within the global aftermarket ecosystem. This journey is fueled by four powerful components, ensuring your success in navigating dynamic business and industry landscapes.
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