Automotive Trade Developments 2023 | Automotive Gross sales & Aftermarket Insights

The automobile trade is predicted to develop within the coming years, regardless of the unstable macroeconomic backdrop. International automobile gross sales in 2023 are forecast to prime 69 million, fuelled by larger penetration in rising markets, rising adoption of electrical autos and the reopening of China following its rest of Covid-19 restrictions. When coupled with constant manufacturing quantity and the sector’s demand backlog, these alternatives provide some resilience to the cost-of-living disaster and provide chain issues which might be impacting gross sales and manufacturing. We count on automobile gross sales to rise additional to 74 million in 2024, persevering with the upward trajectory we have now seen since 2020 towards the degrees attained within the years earlier than the pandemic.

Untapped potential in rising economies

Greater than 85% of the world’s inhabitants stay in Asia Pacific, the Center East and Africa (MEA) or South America, but these areas mixed have fewer automobiles than North America and Europe. We count on to see a few of this potential unlocked within the years forward, with increased penetration in each automobile gross sales and automotive aftermarket classes. 


Regular development within the automotive aftermarket

Price-conscious motorists in Western developed economies are more and more reluctant to commerce of their automobiles for newer fashions, creating the chance for development of their automotive aftermarkets. There are three principal components driving this market saturation:

  1. higher high quality and longer-lasting automobiles,
  2. sturdy second-hand automobile markets
  3. and shoppers ready for the worth of electrical autos to drop to allow them to change. 

The common age of a automobile in Europe is now 12 years, in contrast with simply 7.4 years in 2014. In North America, too, the typical age of automobiles has crept up, from 11.4 years in 2014 to 12.2 years in 2022. With a mixed complete of over 750 million passenger automobiles in operation on the 2 continents, this shopper habits is predicted to result in larger demand for tires, spare components and automobile chemical compounds.

Certainly, the worldwide automotive aftermarket grew by 3% to $64 billion in 2022, with regular development throughout all classes and all areas, aside from China and Developed Asia.

Tires, which account for nearly three-quarters of aftermarket gross sales worth, have been up by 2% in 2022, spare components by 6% and automobile chemical compounds by a sturdy 8%.



Income was additionally 10% up on pre-pandemic ranges, most noticeably for automobile components, which noticed a 20% improve between 2019 and 2022.

The expansion within the aftermarket is pushed largely by post-pandemic mobility and better product costs on account of current spikes in transport and commodity prices, moderately than demand, which fell in most areas in 2022 and in each class aside from automobile chemical compounds. Bucking the pattern have been MEA and Rising Asia, the place each income and gross sales quantity noticed double-digit development in 2022, one other indicator of potential being unlocked in rising markets.

The automotive aftermarket was definitely not proof against the impacts of the cost-of-living disaster, nonetheless. Following a buoyant 2021, development slowed steadily all through 2022 and particularly in This fall as motorists felt the double pinch of excessive vitality and meals costs.



Tire traits: huge and finances

All-season tires and people with the most important rim sizes continued their sturdy development trajectory, pushed by the rising urge for food around the globe for greater automobiles. We’re seeing innovation which means shoppers now not must buy separate units of winter tires in areas the place winter climate isn’t sometimes harsh. For shoppers, this implies price financial savings as they modify their tires as soon as annually whereas paying a better price for the service.

Gentle truck tires have been a standout performer in 2022, rising by 5% on 2021 ranges and 22% vs 2019 amid elevated demand for logistics drivers and last-mile supply. Nonetheless, this development is principally being pushed by the US market the place there’s a increased saturation of larger automobiles.

Passenger automobile tires, although nonetheless dominating the market, carried out weakly by comparability, up just one% on 2021 and there was no development in 4×4 tires over the yr.


Price range manufacturers for automobile tires grew throughout most areas, particularly Latin America and the US, as shoppers tightened their belts in response to inflationary pressures. Another excuse behind finances model development is availability. Through the pandemic finances manufacturers particularly from China appeared for development in different areas, leading to increased shares in market. When these markets reopened, shoppers with restricted budgets went on the lookout for the perfect offers. As a long run pattern, medium and finances manufacturers have elevated their distribution in addition to costs and can possible proceed cannibalizing the premium share.

Generally this meant a decline or solely very modest development in premium manufacturers. The exception was in MEA which noticed double-digit development in any respect value ranges, led by sturdy premium model development.

There have been value hikes for tire manufacturers throughout the board, particularly finances traces, which took 21% of the gross sales worth share in 2022 in contrast with 17% in 2019. Tapping into the candy spot between tighter family budgets and the urge for food for SUVS, manufacturers additionally elevated the vary of large-rim tires obtainable at low-end costs.


Small and artificial engine oil traits

International engine oils noticed sturdy year-on-year income development of 6.6% in 2022, pushed largely by value will increase. There was additionally modest year-on-year unit development of two.2% though efficiency was barely weaker than pre-pandemic ranges.

Globally, gross sales worth was up 13% on 2019, with the best improve seen in Europe and Rising Asia.

Totally artificial oils that provide higher efficiency and comfort at a better value continued their upward pattern to command 54% of the market, and we count on this premiumization to proceed in 2023.

One other pattern we registered was the rise of smaller manufacturers, resembling Idemitsu and Motul, who proceed to encroach available on the market share of bigger market leaders. Nonetheless, the 2 largest corporations mixed nonetheless have a 29% stake out there.

After the sharp rise in oil costs following Russia’s invasion of Ukraine in February, costs of worldwide engine oils started to stabilize at excessive ranges in the direction of the top of the yr, however uncertainty stays relating to future costs on account of excessive market volatility.

E-mobility traits: sustainability and effectivity

Battery-electric and plug-in hybrid autos accounted for 13% of worldwide automobile gross sales in 2022 in contrast with 8% in 2021, as key markets pressed on with targets to part out inside combustion engines over the following twenty years. Nearly six out of 10 shoppers say they’ll contemplate a hybrid automobile as their subsequent buy and the relentless march in the direction of electrification could be seen in metrics resembling world income from electrical automobile automobile tires which jumped up by greater than 1,000% between 2019 and 2022.



The electrical automobile trade might see excessive ranges of development over the approaching years. For sensible automakers and their tier 1 suppliers, there are alternatives to innovate within the rising software-defined automobile (SDV) house with new software-centric options and capabilities that enhance security, comfort and the in-vehicle expertise. As companies come below growing strain to chop carbon and optimize logistics to mitigate inflation, there’s additionally rising curiosity in environment friendly electrical fleet autos that scale back the whole price of possession.

Outlook for 2023

Managing excessive inventories and navigating market value volatility of uncooked supplies are among the many challenges the automotive aftermarket and automobile trade are prone to face in 2023. Inflation, meals and vitality prices will proceed to be on the forefront of shoppers’ minds, pushing them towards extra reasonably priced merchandise.

Nonetheless, premium segments that provide efficiency and comfort, resembling all-season, greater rim sizes and artificial oils, will proceed to gasoline development. Rising economies will provide alternatives for sensible producers whereas China’s reopening will help the sector’s resilience. In the meantime, the sustainability crucial will reward modern manufacturers whose merchandise reply to mounting regulatory and shopper strain for extra environmentally pleasant options.


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