The Australia Automotive Aftermarket Market is estimated to be valued at USD 13.45 Bn in 2024 and is expected to reach USD 17.38 Bn by 2031, growing at a compound annual growth rate (CAGR) of 3.73% from 2024 to 2031.

The Australia automotive aftermarket has been witnessing consistent growth over the past few years. The number of vehicles on road has steadily increased creating demand for repairs and maintenance. Further, Australians are holding their vehicles for longer which is increasing the lifetime value of aftermarket products and services per vehicle. Older vehicles require more repairs and parts replacement driving the aftermarket revenues. However, newer vehicles come with advanced technologies which allow predictive repairs and maintenance through telematics-collected data analysis. This helps reduce unexpected breakdowns. Aftermarket companies are focusing on enhancing customer experience through improved supply chain and logistic networks to ensure timely availability of parts across Australia. The rising vehicle parc and demand for maintenance of older vehicles will continue supporting the revenue growth of Australia automotive aftermarket market in the coming years.

Drivers of the Market:

Increase in miles driven per vehicle driving the market

With more people living further away from their workplaces and social hubs due to housing affordability issues, average annual mileage travelled by vehicles has been steadily increasing in Australia over recent years. Vehicle owners are required to drive longer daily commutes which inevitably leads to faster wear and tear of components like tires, brake pads, belts and hoses. Moreover, a large section of the population in cities like Melbourne and Sydney regularly undertake long weekend drives to beaches and countryside areas outside city limits for relaxation. All of this has contributed to average Australian cars now averaging close to 20,000 km of driving annually compared to only 15,000 km around 5 years back.

This rise in annual usage is directly translating to more frequent replacement and repair needs. More miles mean faster degradation of consumable parts that need routine replacement like brake pads or shorter lifespan of components like timing belts that must be replaced at fixed interval of kilometers. Even for non-consumable parts, the cumulative effect of more distance covered is bringing forward their repair or replacement cycle. Shock absorbers and suspension bushes that may have lasted 8-10 years on average vehicles are now starting to fail in 6-7 years of city driving. Furthermore, with new car sales markedly declining since the late 2010s due to high prices and economic uncertainty, many Australians are holding onto their existing vehicles for longer instead of upgrading. This is putting even greater stresses on the existing vehicle parc and correspondingly driving more aftermarket demand for repair and maintenance services.

Increasing requirement for aesthetics, infotainment and comfort in vehicles driving the market

Rising disposable incomes over the last decade have seen Australian consumers prioritizing in-car comfort, connectivity and customization features more than ever before. There is a growing need amongst drivers to personalize the interior and exterior appearance of their vehicles through aftermarket modifications. Installing flashy alloy wheels, tinting windows, upgrading sound systems and adding other visual customizations have become increasingly mainstream hobby and passion for many in cities. Similarly, the always-on connectivity demands of modern life are also driving enhancements to factory-fitted infotainment interfaces. Upgrades such as bigger touchscreens, driver assistant technologies, phone mirrors and rear seat entertainment suites are examples seeing brisk demand.

Furthermore, Australians also attach greater importance to ergonomic and wellness features in vehicles today. Customizable seating, massage functions, air ionizers are examples witnessing rising uptake. Enhancing the basic function of transportation into a mobile comfort zone thus appears to be an important motivator. In line with other consumer appliances, vehicles too have become projected symbols of prestige, style and individual expression. Aftermarket players are effectively tapping into these evolving lifestyle requirements and emotions through specialized interior, exterior personalization offerings along with convenience and well-being enhancing technologies. It allows them to not just serve typical repair-maintenance needs but also expand into higher margin, elective enhancements market appealing to non-essential product seeking consumers.

Market Challenges and Opportunities:

Increase in the Repair and Maintenance Services Cost restraining the market

One of the major challenges faced by the Australia automotive aftermarket is the increase in the repair and maintenance services cost. The cost of labour, spare parts and overall cost of repair and maintenance activities in Australia has increased substantially in the past few years. According to our analysis, the average cost of repair and maintenance of a vehicle in Australia has increased by over 25% in the last 5 years. This increasing cost is majorly due to rise in prices of spare parts, higher labour costs and increase in GST and other indirect taxes on such services.

The rising cost has made vehicle repair and maintenance activities more expensive for both individual consumers and commercial fleet operators. With the cost rising so sharply, consumers are deferring their repair needs or switching to cheaper alternatives like used parts to save costs. This has negatively impacted the demand for new spare parts. Commercial fleet operators are also finding it difficult to justify higher maintenance budgets, thereby potentially reducing the frequency of repair and maintenance cycles. The increasing cost is restraining further growth of the auto parts and service market in Australia. Unless costs are controlled, this trend may continue restricting the market size and revenue potentials in the coming years.

Online sales of auto parts creating opportunities for companies

One significant opportunity for companies in the Australia automotive aftermarket is the growth of online sales channels, especially for auto parts. Currently only about 15-18% of auto parts are sold online in Australia compared to over 25% in other developed automotive markets. However, online penetration is growing rapidly driven by increasing internet and smartphone usage among consumers. The younger population in particular is more comfortable researching and purchasing auto parts online rather than visiting physical stores.

Leading this opportunity is the convenience offered by online platforms for customers to research technical specifications of thousands of parts, read reviews, make price comparisons within minutes and get doorstep delivery. Companies that establish strong online sales channels with better search functionality, mobile friendliness and customer support are well poised to capitalise on this growing trend. Having an integrated online and offline strategy allows companies to serve both tech-savvy younger customers as well as older customers who still prefer traditional retail stores. Overall, the digital transformation of auto parts sales and increasing preference for online purchases provide significant market opportunities for brands that make the right investments and have an omnichannel strategy.

Insights By Accessories - Comfort and Convenience Drive Interior Accessories

In terms of By Accessories, Interior contributes the 63.20% share of the market owning to consumers' rising focus on comfort and convenience when travelling. Interior accessories such as seat covers, floor mats, steering wheel covers and dash mats have become very popular as they help protect a vehicle's interior from dirt and wear & tear. Australians drive significant yearly distances and want their vehicle interior to remain clean, scratch-free and ergonomic for long rides. Interior accessories appeal to this need for durability as well as adding a personalized touch.

Consumers are willing to spend more on high quality, feature-rich interior accessories that blend functionality with aesthetics. Leather and suede materials are gaining preference over regular fabrics for their premium feel. Accessories with additional features like heating and cooling functions for seats further enhance comfort, especially during extreme weather. Manufacturers launch new designs frequently to match different interior themes and car models. An expanding aftermarket means buyers have a huge variety of styles, colors and brands to choose from.

Ease of do-it-yourself installation is another factor spurring interior accessory sales. Most products come with detailed fitting instructions and mounting solutions so that drivers can set them up independently without professional help. This saves on installation costs and allows customizing the interior as per changing needs or moods. Do-it-yourself setup has made interior accessories an impulse buy for many Australians.

Insights By Parts - Reliable Performance Drives Tyre Dominance

In terms of By Parts, Tyres contribute the 52.40% share due to their critical role in vehicle performance and safety. Australian roads range from highways to off-roads, putting continual wear and tear on tyres. Their reliable function is a top priority, with drivers needing replacements regularly. While OEM tyres are an option, affordable aftermarket tyres are widely available in different brands, sizes, tread patterns and price points.

Tyre technology too has evolved, with newer compounds and thread designs that optimize grip, mileage and ruggedness for diverse terrains. All-season and all-terrain tyres have boosted in popularity. Run-flat and self-sealing tyres add convenience by sustaining inflation even after a puncture. Customers also replace tyres periodically to maintain optimum engine efficiency and braking ability.

Mechanics and fitment centres play a big role by recommending appropriate tyre models match a vehicle’s usage profile as well as weight and speed capabilities. Their expertise alongside tyre manufacturers’ extensive distribution networks ensure basic replacements are never in short supply. This ready access and knowledge infusion regarding the right tyre specifications to suit individual needs has made them the default urgent purchase over other parts.

Insights By Services - Value Service Drives General Automotive Repairs Dominance

In terms of By Services, General Automotive Repairs contribute the highest share as they provide the best value solution for common issues. Unlike complex transmission or electrical problems, general repairs for components like brakes, shock absorbers, cooling and exhaust systems are affordable and accessible. There are many independent garages with trained technicians who can handle such repairs promptly at lower costs than dealers.

Further, general repairs can sometimes be postponed for non-critical applications, but regular maintenance is still recommended to maximize vehicle life. It is more cost-effective to fix smaller problems before they worsen. Online forums too have made it easier for DIY enthusiasts to attempt basic repairs independently with guidance from experienced users. This has put downward pressure on prices.

General repairs also allow car owners flexibility based on budgets. Minor fixes can be independently arranged without major investments. Dealers provide warranty service for major repairs, giving customers multiple affordable options near their location. Investing in maintenance regularly delivers better long-term value than relying on one major service later. This has made general repairs the go-to for majority vehicle issues.

The major players operating in the Market include Denso Corporation, Hella KGaA Hueck & Co., Continental AG, Delphi Automotive, ACDelco, Faurecia SA, Magneti Marelli SpA, Robert Boosch GmbH, Aisin Seiki Co.,Ltd., Bridestone Corporation.

• In April 2024, Denso Corporation, a leading global mobility supplier based in Kariya, Japan, announced the launch of MobiQ, its new brand focused on aftermarket smart mobility and vehicle-to-everything (V2X) products and solutions. This announcement was made at the ITS America Conference & Expo 2024 in Phoenix, showcasing Denso's commitment to enhancing vehicle connectivity and safety through innovative technologies.
• In July 2023, Capricorn Society Limited, a member-based organization supporting over 25,000 automotive businesses in Australia and New Zealand, and Repairify Australia Holdings Pty Ltd, known for its innovative remote automotive repair solutions, formed a joint venture. This collaboration aims to deliver advanced remote diagnostic services to automotive repairers across the region, enhancing their capabilities to manage modern vehicle servicing efficiently.
• In January 2020, Continental AG, a leading global technology company specializing in automotive parts and systems, launched a new web portal for the automotive aftermarket. This platform consolidates all product and service information, making it easier for workshops and dealers to access a comprehensive catalog of Continental's offerings, which include tires, drive components, and diagnostic solutions.

• By Accessories
  • Interior
  • Exterior
• By Parts
  • Tyres
  • Wear&Tear Parts
  • Lubricants
  • Collision Body
  • Exhaust Components
  • Others
• By Services
  • General Automotive Repairs
  • Automotive Transmission Repairs