UK aftermarket grows as vehicles gain technology
07 June 2017
07 June 2017
According to new figures released by the SMMT, the UK’s parts and servicing industry grew again in 2016, with turnover rising 2.4% to £21.6 billion (€24.7 billion). Growth has been achieved as a result of record numbers of new car registrations, and increased reliability, which in turn means vehicles remain on the road longer while still requiring servicing and repair.
New research commissioned by the SMMT shows that in the year 2016, UK motorists increased their annual spend on vehicle maintenance by 1.7% to an average of £707 (€811). This is due in part to the replacement of more high-tech components found on newer vehicles, which require new skills and equipment to fit. While tyres, lubricants and filters are still the most commonly replaced items, the research shows that demand is rising fastest for telematics devices and tyre pressure monitoring sensors.
The figures highlight the automotive aftermarket’s contribution to the UK economy. Figures from the industry, which includes parts makers, distributors, retailers and workshops, reveal it grew its contribution by 2.5% to £12.5 billion (€14.3 billion) and created 1,400 new jobs, meaning the sector now employs around 347,000 people.
The increasing digitalisation of cars and components presents both challenges and opportunities for the sector as it strives to keep pace with advanced vehicle technology, data-driven servicing and the changing needs of motorists. The research shows that British motorists are also leading the way in online car maintenance, with one of the fastest adoption rates in Europe.″¯Last year, UK consumers bought a higher percentage of automotive parts, accessories and services online than they did cosmetics and groceries. Together they spent some £920 million (€1.05 billion) on items such as tyres, brakes and batteries, and by 2022 this is forecast to rise by more than 75% to £1.65 billion (€1.9 billion).
The research also identifies a growing appetite for emerging forms of mobility such as car-sharing schemes. These are forecast to attract around 2.3 million members worldwide by 2025. Consumers are also turning towards online services, such as online comparison websites, popular in the insurance market but only just taking off in the UK servicing sector. An estimated 100,000 people in the country are currently using these sites to compare servicing and repair prices and this is set to grow significantly, meaning some aftermarket companies will need to adapt their business models to take into account a new digital strategy.
Mike Hawes, SMMT chief executive,″¯commented: ′Today’s figures show just how vital the UK automotive aftermarket is to our economy and society, supporting hundreds of thousands of jobs and keeping vehicles safe – and the country moving. Our car maintenance sector is one of Europe’s most competitive, with vehicle owners enjoying more choice over where they have their cars serviced. The shift to digital vehicles and services will help drive this further, but the sector must continue to invest in the advanced skills, equipment and systems needed to stay abreast of evolving technology and changing mobility patterns.’
As the number and age of vehicles on UK roads increases, thanks to a strong new car market, ever-improving reliability and more complex servicing techniques, by 2022 the UK automotive aftermarket is projected to be worth some £28 billion, with an employee base of 400,000.