Aftermarket players have yet to master the power of branding.
The aftermarket is a potentially attractive arena in the automotive value chain, but it faces major obstacles. The industry is highly fragmented, has large inefficiencies, and is highly competitive.
On the whole, auto parts companies currently have poorly executed branding strategies. And it shows – only 12.6% of motorists ask for a specific make when replacing their tires. Yet the tire sector is the most heavily branded in the aftermarket.
‘Power brands’ could transform the aftermarket sector. To avoid their products becoming commodities, component manufacturers must particularly target motorists and the mechanics who determine which product is picked from the shelf.
Meanwhile retail outlets need to push the proprietary benefits of their services. The fast-fit sector (with a large number of branded outlets) already holds the dominant position. The likes of Kwik Fit are heavily embedded in motorist’s psyche. These strongly branded national chains are expected to grow well compared to outlets that portray a fuzzy brand image.
The aftermarket has great potential but is currently not conducive to long term profitability. There are few other industries which can match the aftermarket for a lack of strong branding. Serious investment is necessary, which companies will have to weigh against the long term benefits. The winners in the aftermarket will be those manufacturers that get motorists to ask for their parts by name.
