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Looking ahead at 2023, and what we can expect for the Automotive Aftermarket regarding “trends”, and “future-technologies”, specific to the Remanufacturing Sub-Sector

Since the outset of the global pandemic in the first-quarter of 2020, countless Industries (and “economies of scale”) have changed its focus in terms of their business-models, in-doing-so, adapting to Industry “trends”, “new-technology”, and the likes thereof. While the pandemic served as the primary driver of Industry evolution (moving Industries into an accelerated rate insofar the diversification, expansion, and branching-out of one’s business), it also accelerated the adoption of already emerging trends.

Since the outset of the global pandemic in the first-quarter of 2020, countless Industries (and “economies of scale”) have changed its focus in terms of their business-models, in-doing-so, adapting to Industry “trends”, “new-technology”, and the likes thereof.

While the pandemic served as the primary driver of Industry evolution (moving Industries into an accelerated rate insofar the diversification, expansion, and branching-out of one’s business), it also accelerated the adoption of already emerging trends.

Several significant trends have begun to reshape the Automotive Aftermarket Industry as we know it, whereby three of the most notable are:

  1. Focus on Green Initiatives:

EV or Electric Vehicle technology are in the increase, and purchases are on the rise. There is a major increase, in both Electric Vehicles, and Hybrid Vehicle technology, globally) and are rising if compared to historical sales.

In response to this growing demand for EVs, OEMs are doubling down on investments in “green” initiatives. They are also working around the clock to improve the efficiency of existing models and exploring new ways to effectively address the demand for zero-emission Vehicles.

  • Growing Popularity of Mobility as a VAS product, or “value-add” Service:

The phrase “mobility as a service” is a broad term for services that allow Consumers to buy short-term mobility. It provides an alternative to purchasing personally owned Vehicles. Examples of these services include ride-sharing platforms and short-term Electric Bike rental programs, to name but just a few.

The aforesaid growing demand in mobility, indicate a shift in Consumer habits from traditional Vehicle buying to more flexible solutions. An increase in remote work opportunities and the rise of more convenient food delivery services, fuel the growth of the “mobility as a service” Market.

  1. Increased Use of Digital Sales Experiences:

Modern Consumers have grown accustomed to making purchases by simply clicking a few buttons on their laptops or smart-devices. As a result, they have come to expect that all transactions will be equally as efficient and frictionless. This expectation directly conflicts with the traditional car-buying experience, which typically takes hours to navigate.

While it was possible to purchase a Vehicle online before the pandemic, fewer than one out of ten vehicles were purchased online. By 2021, we saw a growth in this number. Buying a Vehicle online is faster, more efficient, less stressful, and easier. That’s why this trend is expected to continue well past 2023.

Those operating within the Automotive Aftermarket space or ancillary sectors should keep a close eye on these three trends, as they are poised to reshape this economically important Industry.

How does Businesses in the Automotive Aftermarket stay relevant?

One way to stay relevant will be to RECOGNIZE and to understand CURRENT economic trends (or disruptive trends). Let’s have a look at CURRENT economic disruptions within the Automotive Aftermarket, by way of a SWOT analysis.

A SWOT analysis (S = Strength | W = Weakness | O = Opportunity | T = Thread) is a good exercise to go through on an annual basis in terms of the health of your “business”.

CURRENT economic trends / disruptions, listed (inter alia):

  1. Gap in qualified Artisans, and uptake of Apprentices;
  2. Economic setback as a result of the pandemic;
  3. Importation of sub-standard engines, components, and parts;
  4. Legislation on component importation, and carbon-credits;
  5. Anticompetitive behaviour in the Automotive Aftermarket;
  6. Loss of key staff to other Countries;
  7. Rapid changes in Technology;
  8. Market demand in the “REMAN” sub-sector are stable, but may become a thread in time to come i.e. new technology – thus the importance to diversify, and adapt to Market demand (where Skills Development will play a key role); and in conclusion
  9. All of the aforementioned aspects are priority matters and / or projects concluded, or in progress by RMI | ARA.

Now let’s look at how these (disruptive) trends align with historical economic disruptions within the Automotive Aftermarket:

Understanding historical “Industrial Revolutions”, referring to Industry 1.0 to 5.0 – one can position oneself best to stay current. In order to stay relevant, one has to adapt to Industry demand i.e. the only constant in life is change!

Industrial Revolutions have historically served to separate man’s work from machine’s work, and since then, operations have developed rapidly. We have undergone three Industrial Revolutions, find ourselves amid a fourth, and already transitioning to the fifth.

Industry 1.0:

Steam engines helped birth the 1st Industrial Revolution (18th Century).

Industry 2.0:

Electricity was the fuel of Industry 2.0 (19th Century).

Industry 3.0:

The integrated circuit chip made the first computer era possible (20th Century).

Industry 4.0:

Industry 4.0 is about something we all are familiar with; the Smart Device (21st Century).

Industry 5.0:

With Industry 5.0 we’ll see much more advanced collaborative interactions between humans, machines, processes, and systems for maximum performance optimization.

Examples of the aforementioned includes Web-based-Video (with the likes of Netflix & ShowMax) | Ride-sharing services (2 or more owners of one Vehicle) | VR or Virtual Reality (will change how we do business) | Cryptocurrency i.e. BitCoin; have you noticed how Industry 4.0 (the Internet of Things) have changed how we do Banking | 3D Printing | Li-Fi, a 100X faster than Wi-Fi.

Schematic structure of Industry 1.0 to 5.0:

Methods that Businesses can implement to align with disruptions (in using it to your advantage):

Methods to align with disruptions, listed (inter alia):

  1. Embrace new Technologies i.e. Hybrid Technology | EVs – Electric Vehicles | Autonomous (or Connected Vehicle) Technology;
  2. Where need be, expand your business with new and dedicated departments, to widen the scope of your “product offering” i.e. Hybrid Regenerative Braking Systems and EV Power Transmissions;
  3. To align your business with newly & afresh Technologies such as EV, and Hybrid Technology, by-way of upskilling yourself and your staff-compliment with the skill-set to render services on these Technologies; a demand that’ll to see a steep increase as OEMs bring (release) the aforesaid “technologies” into Market.

A vehicle is no longer just a mode of transport. “Connected-Vehicle” technology has created a new commercial environment that embraces both vehicle and driver (referring to Industry 5.0). Technology offers new and profitable revenue streams, as in the case of the previous Industrial Revolutions.

A well designed all electric Vehicle does not have or need a transmission. Remember that an electric motor generates full torque at stall. That means when you hit the “gas” it goes, right-away. And since there is no transmission, there is also no need for a clutch. When the Vehicle is at rest, the electric motor is not running, so no clutch is needed.

Pictorial illustration of “regenerative braking”:

Regenerative-braking, a mechanism found on most hybrid and full-electric Vehicles (EVs). It captures the kinetic energy from braking and converts it into the electrical power that charges the Vehicle’s high voltage battery. Regenerative braking also slows the Vehicle down, which assists the use of traditional brakes.

Pictorial illustration of Hybrid & EV Power Transmissions: