The Changing Aftermarket Game- How can automotive aftermarket companies benefit from new opportunities?

A host of technological and topographical developments are expected to disrupt the automotive aftermarket industry in the next 10 to 15 years. The ultimate impact of such market disruptions will depend on the supplier’s profitability and how well they can decrease the negative impact by capitalizing on the new market opportunities. To come out ahead and benefit from arising opportunities, automotive aftermarket industry players will have to assess the likely impact of such disruptive trends on their business. If you’re wondering how? This is feasible using supply market intelligence.

By leveraging supply market intelligence automotive aftermarket companies can create a path for themselves that considers their strategic aspirations, the shape of their presence in the global market, their partnerships and position within the value chain, and the tools that enable and deepen their relationships with their customers.

About the Client

The client- is a leading player in the U.S automotive aftermarket industry.

Client’s Challenge

The automotive industry is one of the highly competitive markets in the world. The lack of comprehensives policies to address the changing market scenarios is a major growth obstructor for leading automotive aftermarket companies across the globe. Our client- an automotive aftermarket industry player, was one such player who lacked a comprehensive policy to address the changes in market dynamics.

The used auto parts dealer engaged SpendEdge to leverage its expertise in supply market intelligence and examine five different categories of auto parts, which added up to $120 million in annual spend. Unlike the other supply market intelligence-based assessments, the objective of the automotive aftermarket industry player was not only to minimize category spend. Instead, they wanted to leverage supply market intelligence to rebalance their global supply base and develop effective strategies to address the rising importance of global markets.

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Engagement Overview

The automotive aftermarket industry dealer was losing sales due to the high costs of procuring raw materials and logistics. The procurement team wanted to establish long-term strategic supplier relationships in emerging markets, with a target of procuring 30% of automotive components from suppliers outside of South America. Our team collaborated with the automotive aftermarket industry player to extract information from their internal databases and to project future spend volumes.

Our expertise in supply market intelligence aided the automotive aftermarket player to rationalize their supply base and develop effective strategies to overcome losses. The supply market intelligence experts at SpendEdge conducted multiple rounds of negotiations to determine key suppliers and helped the client to analyze the RFP responses from potential suppliers.

Key Findings

The solutions offered, enabled the automotive aftermarket industry client to reduce the time required to identify capable suppliers from a pool of global suppliers. The introduction of a new approach to tackle price fluctuations and supply market challenges empowered them to identify $30 million in savings for three of the five categories that they deal with. On a broader sense, the automotive aftermarket dealer gained a more comprehensive knowledge of the supply market and achieved its goal of supplier diversification to address the increasing importance of emerging markets.

Would you like to learn more? Get in touch with our supply market intelligence experts.