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Strategic Analysis of the Canadian Automotive Aftermarket, Forecast to 2025

  • Report

  • 114 Pages
  • December 2018
  • Region: Canada
  • Frost & Sullivan
  • ID: 4721848

This study covers the Class 1-3 vehicles aftermarket in terms of volume (in million units) and value ($ million) across Canada. The base year for the analysis is 2017 and the forecast period is 2018 to 2025. This research compiles findings from various reports published over the past two years.

The study includes analyses of vehicles in operation, new and used vehicle sales, and parts replacement revenues in the automotive aftermarket. It discusses the growth opportunities and challenges offered by new business models and technologies such as eRetailing, telematics, as well as electric and autonomous vehicles in the aftermarket ecosystem. It also includes profiling of major aftermarket players such as Uni-select, Wakefield, Vast-Auto Distribution Ltée, Lordco Parts, UAP, Inc. (NAPA Canada), WORLDPAC, Spectra Premium, MAS Automotive Distribution, Mevotech, Gates Canada, and other establishments.

The Canadian vehicle portfolio has a greater concentration of light trucks and SUVs owing to their high residual value and functionalities. This trend offers more revenue potential for the aftermarket players, as light trucks have higher priced parts, which increases the value per parts and services. Moderate economic growth, inflation, and higher interest rates are expected to dampen the growth of new car sales to less than 1% CAGR till 2025. The used vehicle sales, however, are expected to rise steadily during the forecast period. The share of 4-7 year old vehicles is likely to remain stable. The large population of out-of-warranty vehicles, fueled by the growth of used vehicle sales,  boosts the revenue-generation opportunities for the independent aftermarket (IAM). Early adoption of technology-based business models and services such as eRetailing, service aggregations, and telematics-based prognostics will help increase the market share of aftermarket participants. The eRetail channel for automotive parts and services in the Canadian aftermarket is expected to grow at a CAGR of 8.6% during 2017-2025. The growth is due to the strong penetration of Internet/smartphone usage and online discounts.

Research Scope

This study's objectives are to:

  • Estimate the total market opportunity based on a top-down analysis of vehicles in operation, replacement rates, and available pricing data.
  • Identify the top automotive parts distributors and service providers in the Canadian automotive aftermarket.
  • Provide insights into new business models and vehicle technologies and how it could disrupt the Canadian automotive aftermarket value chain.
  • Identify the growth opportunities and challenges that exist within the Canadian automotive aftermarket and how it would impact market participants.

Key Issues Addressed

  • What is the short- to medium-term outlook for the Canadian automotive aftermarket?
  • What is the structure of the Canadian automotive aftermarket? Who are the key industry participants?
  • Which products and services will offer the highest future growth opportunities?
  • How is the competitive landscape changing?
  • What are the impacts of Mega Trends such as eRetailing, electric vehicles, telematics, and ADAS/autonomous vehicles on the Canadian aftermarket? How is it going to affect the market participants?

Table of Contents

1. Executive Summary
  • Key Takeaways
  • Emerging Trends and Business Models
  • Parts Replacement Revenue
  • Key Findings and Future Outlook

2. Research Scope, Definitions, and Vehicle Segmentation
  • Research Scope and Definitions

3. Research Objectives, Background, and Methodology
  • Research Aim and Objectives
  • Key Questions this Study will Answer
  • Research Background
  • Research Methodology

4. Definitions and Segmentation
  • Product/System Segmentation
  • Market Definitions
  • Vehicle Segmentation
  • Distribution Channel Structure

5. Market Overview
  • Canadian Demographic Highlights
  • Overall Canadian Economy
  • Average Annual Kilometers Travelled
  • Automotive Repair and Service Centers
  • Automotive Repair and Service Technicians

6. Aftermarket - Demand Analysis
  • New Vehicle Sales Analysis and Outlook
  • Total Vehicles in Operation
  • Vehicle in Operation Analysis - Key Takeaways
  • Vehicle in Operation by Age
  • Vehicle in Operation by Age - Opportunity Analysis
  • Vehicle in Operation by Brand
  • Fleet Vehicle Sales
  • Fleet Vehicle Segment - Opportunity Analysis
  • Parts Replacement Revenue Forecast

7. Distribution Channel Analysis
  • Percentage of Revenue by Distribution Channel
  • Value Channel Analysis

8. Automotive Trends - eRetailing
  • eRetailing - Overview
  • eRetailing - Key Influencers
  • Comparative Benchmarking of Key eRetailers - Web Traffic

9. Automotive Trends - OES Aftersales 2.0
  • OEM Aftersales Transition
  • Customer Service Strategies for Aftersales 2.0
  • eCommerce - BMW Direct eStore
  • IAM Parts - Ford’s Omnicraft
  • New Service Models - Ford’s Quick Lane
  • Digital Engagement - Chevrolet Owner Center
  • Connected Repair - GM OnStar

10. Automotive Trends - Telematics
  • OBD and Embedded Telematics Systems
  • Canadian Embedded Telematics - Unit Shipment Forecast
  • Canadian OBDII Telematics - Unit Shipment Forecast
  • Impact of Telematics on the Aftermarket - Key Takeaways

11. Aftermarket Telematics Service Providers/Data Platform Profiles
  • Geotab, Inc.
  • Fleet Complete
  • Mojio, Inc.
  • Pitstop

12. Automotive Trends - Electric Vehicles
  • Electric Vehicles - New Vehicle Sales
  • Key Demand Drivers in EV/PHEV Adoption
  • Parts Overview and Expected Trend - EV vs ICV
  • Emerging Services in the EV/PHEV Eco Systems

13. Automotive Mega Trends - Autonomous Vehicles
  • Automation Levels - Society of Automotive Engineers (SAE) Definitions
  • Autonomous Vehicles and Impact on VIO
  • Impact of ADAS/Autonomous Vehicles on the Aftermarket

14. Growth Opportunities and Companies to Action
  • Growth Opportunity - Invest in New-age Diagnostic Equipment and Up-skill Service Professionals
  • Strategic Imperatives for Success

15. Conclusion and Future Outlook
  • Key Conclusions and Future Outlook
  • The Last Word - 3 Big Predictions
  • Legal Disclaimer

16. Appendix - Key Distributors/Retailer Profiles
  • Company Profile - Uni-Select, Inc.
  • Uni-Select - Key Business Model
  • Automotive Highlights - Uni-Select, Inc.
  • Wakefield Canada, Inc.
  • Vast-Auto Distribution Ltée
  • Lordco Parts Ltd.
  • UAP, Inc. (NAPA Canada)
  • WORLDPAC, Inc.
  • Carquest Corporation
  • Automotive Highlights - Canadian Tire Group
  • Canadian Tire Subsidiaries and Auto Segment
  • Automotive Business Review
  • Market Engineering Methodology

17. Key Supplier Profiles
  • Spectra Premium Industries, Inc.
  • MAS Automotive Distribution, Inc.
  • Mevotech, Inc.
  • Gates Canada, Inc.

18. Amazon
  • Company Overview - Amazon
  • Automotive Business Strategy - Amazon

19. eBay
  • Company Overview - eBay
  • Business Strategy - Fee Structure for Sellers
  • Business Strategy - eBay
  • Impact of Service Aggregators
  • List of Exhibits

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • Amazon
  • BMW
  • Canadian Tire Group
  • Carquest Corporation
  • Chevrolet
  • eBay
  • Fleet Complete
  • Ford
  • Gates Canada, Inc.
  • Geotab, Inc
  • GM
  • Lordco Parts Ltd.
  • MAS Automotive Distribution, Inc.
  • Mevotech, Inc.
  • Mojio, Inc.
  • Pitstop
  • Spectra Premium Industries, Inc.
  • UAP, Inc. (NAPA Canada)
  • Uni-Select, Inc.
  • Vast-Auto Distribution Ltée
  • Wakefield Canada, Inc.
  • WORLDPAC, Inc.