The automotive industry is currently experiencing a period of transformation, with various factors influencing the current state of automotive and aftermarket sales. From macroeconomic conditions to consumer economic pressures, and the latest areas of innovation-led transformation, there are several key trends shaping the industry in 2024.
In the previous year, global consumers purchased a staggering 68 million new cars, representing a significant increase in year-on-year growth. This brings the industry closer to the pre-pandemic benchmark of 73 million cars bought in 2019. For 2024, the general consensus is that sales will reach around 70 million, with more conservative growth forecast due to the satisfaction of much of the pent-up demand from the low-production years of 2020-2022. Economic challenges faced by consumers across different regions also contribute to the more moderate growth forecast for this year.
In terms of second-hand car sales and automotive aftermarket opportunities, there are some noteworthy insights to consider. We anticipate 36.2 million used car sales this year, a slight increase from 35.9 million in 2023. In Europe and North America, the average age of cars in operation has risen, leading to a potential rise in demand for aftermarket products as the maintenance requirements of these older cars increase.
The automotive aftermarket continues to show growth, with sales revenue increasing by +4% last year, reaching $71 billion. Tires, car chemicals, and spare parts are contributing to this growth, driven in part by an increase in premium purchases across segments.
From a regional perspective, there are notable shifts in the market. For example, there is a trend of car tire growth shifting to emerging economies, with China and the Middle East and Africa being the fastest-growing regions in terms of car tire sales.
Globally, the unit share of car tires sold by smaller brands has increased, reflecting consumers’ shift to lower-priced options as their household budgets were squeezed last year. This expansion of budget brands is not confined to lower price segments, with budget brands offering more SKUs even in higher-end tire segments at better prices than big brands.
In terms of engine oils, global revenue from sales of engine oils for both motorcycles and cars grew +6% last year, with smaller brands significantly increasing their share of both revenue and volume of engine oil sales.
Looking ahead, automotive innovation continues to focus on safety, convenience, performance, design, sustainability, and business models. Technologies such as AI and the Internet of Things are driving transformation across design, manufacturing, and operations, and electric vehicles continue to grow in both the consumer and commercial spheres.
The future of the automotive industry will be connected, autonomous, shared, and electric, but it will take time to reach that future. Manufacturers must maintain a precise understanding of their evolving audiences and align with their evolving lifestyles, needs, aspirations, and barriers to optimize their innovation strategy.
In conclusion, the global automotive industry is undergoing significant changes, driven by a combination of economic, technological, and consumer-driven factors. As we look towards 2024 and beyond, it will be crucial for industry players to adapt to these trends and embrace innovation to stay competitive in a rapidly evolving landscape. To further explore the latest trends and developments in the automotive industry, we encourage you to subscribe to our newsletter and stay tuned for our upcoming posts.