At Automechanika in the Middle East, Vishal Pandey – the founder Glasgow Research & Consulting – delivered a keynote presentation on the latest trends in the global and regional automotive market, and their impact on the aftermarket segment.

1. A presentation by Vishal Pandey
Global Automotive
Aftermarket Trends
and Market Updates

2. Automotive latest news and developments
© 2023 Glasgow Research & Consulting 1

3. Big Data
A connected vehicle today
already generates 25 GB of
data per hour
© 2023 Glasgow Research & Consulting 2
Aftermarket impacted by multiple disruptive trends
Connected vehicles
More than ¾ of new cars
connected by 2025
Autonomous driving
25% fully autonomous
cars by 2035
Shift in Competitive power
More than 500 M&A
transactions in automotive
aftermarket in 2021
Electrification
Over 200 EV models already
announced by OEMs Globally
Shared, multimodal
and micro mobility
~3% of car drivers
will actively use car sharing
by 2025
Digitization of Channels and
Interfaces
30-50% Direct / online
sales by 2025
Increasing importance of
software
90% expert expect Service
more or equally important
than parts

4. Connected vehicles enabling predictive maintenance
For aftermarket players, increasing connectivity delivers the potential of closer, more immediate relationships
with customers
© 2023 Glasgow Research & Consulting
Connected vehicles (CVs) offer new features like route tracking, park
and find, accident and breakdown assistance, dealer search, and
vehicle status information
Response and Readiness Predictive Maintenance
Remote onboard
diagnostics
• Advanced breakdown service
transmits data to enable the
responding party to deliver
appropriate service, including
necessary car parts.
• CVs send status data for
instant analysis and checks,
enabling appropriate actions
to be taken if an
actual/potential malfunction is
detected
• Preventive service based on
driving behaviour and vehicle
usage could replace regular
time-based service intervals.
This type of service could
increase in-workshop traffic
3

5. Autonomous driving impacts aftermarket in various ways
Over the last years, global advanced driver-assistance systems (ADAS) volumes grew significantly. ADAS and
autonomous driving leading to fewer accidents but shorter maintenance intervals
© 2023 Glasgow Research & Consulting
As per industry experts, approx. 50% of passenger vehicles sold in
2030 could be highly autonomous and another approx. 15% fully
autonomous
• Autonomous vehicles (AVs)
will reduce and eventually
eliminate the human error
element of driving leading to
fewer accidents
• AVs need to be fully functional
at all times and equipped with
sensitive components like
sensors that may require more
frequent diagnostic checks
• AVs may shift liability more
toward OEMs, This has the
potential to make OEM-backed
service models preferable to
independent service and
repair models
Fewer Accidents
Changed Service
Requirements
Increased OEMs
Liability
4

6. Shared mobility
Having weathered a pandemic, regulatory whiplash, and a host of other hurdles, shared mobility endures
© 2023 Glasgow Research & Consulting
51%
20%
12%
9%
8%
Reason for Ride
Hailing
Convenience
Cheaper than others
For reimbursed business trips
Do not drive
Don’t have to carry cash
The next big things in shared mobility include autonomous taxis (so-
called robo-taxis) and airborne varieties, which have lately seen
increased traction
• Currently e-hailing has the
highest market share in shared
mobility services. However, robo-
taxis and shared micormobility
are expected to top e-hailing
services in the next ten years
• More than $100 billion have been
invested in shared mobility
companies since 2010; with 72%
coming from VCs and PEs
• This displays a mindset shift from
selling vehicles to providing
shared-mobility services. The
latter may even cannibalize
OEMs’ core business
Future Mobility Modes Investments
5

7. Electrification is shrinking the profit pool
Changing market dynamics will require aftermarket player to invest in adding new competencies, offer different
service profile and focus on developing sustainable/eco-friendly supply chains
© 2023 Glasgow Research & Consulting
Green consciousness leading to electrification of powertrain and
shifting aftermarket requirements
• A technical understanding of
new components (battery,
motor) will be required of all
market players
• Investment in skill sets,
offerings, and messaging that
match the growing call for
sustainability
• Making their products and
operations more sustainable,
developing eco-friendly supply
chains and emphasizing
“green”
New Technical
Competencies
Different Service
Profile
Eco-friendly Parts and
Services
6

8. Digitization of channels and interfaces
For aftermarket players, increasing connectivity delivers the potential of closer, more immediate relationships
with customers
© 2023 Glasgow Research & Consulting
Digitization of channels and interfaces (e.g., e-commerce) reduces
information asymmetry and increases price transparency for
customers
• Large numbers of customers are using digital
channels to gain a clearer picture of cost and
quality
• More aftermarket customers are using online
channels to evaluate workshops, and even more
use digital tools to inform their purchase of car
parts
• Looking ahead, workshops are expected to
increase their e-commerce activity on
distributor-independent B2B platforms and shop
less via traditional parts distributors’ physical
channels
• End customers also increasingly use digital
platforms to purchase parts online
Price Transparency Online Sales
7

9. Increasing importance of software
For aftermarket players who start to build their software skill sets, there is significant potential for operations
optimization and valuable new use cases in “Virtual Repair Support” and “Maintenance and Monitoring”
© 2023 Glasgow Research & Consulting
54%
40%
6%
Important future for
aftermarket
Service
Parts
Both
More than 90% of industry experts expect that aftermarket SERVICE
will become more or equally important than PARTS
• Potential to be able to remotely
replace modules or offer
“virtually guided” services –
reduce customer trips to
workshops
• Remote, on-board diagnostics
can help as “advance warning”
to identify technical issues
early in the life cycle
Virtual Repair Support
Maintenance and
Monitoring
8

10. Big Data enables advanced analytics
Optimizing value chain, improving forecasts, operations, and performance through big data can be the
differentiator for aftermarket players
© 2023 Glasgow Research & Consulting
Big data enables advanced analytics of field and customer data,
allowing for use cases on both revenue and cost sides
• Big data analytics has the power to help
aftermarket players understand their customers’
behaviors, preferences, and needs; and help them
tailor their offerings, leading to higher revenues
and increased customer satisfaction
• A CV today generates 25GB of data per hour,
including the collection of telematics and driver
behavior data
• Big data and advanced analytics will allow
aftermarket players to store and process vehicle,
customer, and vehicle usage data to optimize the
value chain end-to-end based on predictive
maintenance
• Better medium-term predictions can even lead to
more optimized parts production cycles
Deeper Consumer Insights Value Chain Optimization
9

11. Shifts in competitive power
The landscape of companies occupying key places along the automotive aftermarket value chain is changing in
two specific ways: who is playing and how they are playing
© 2023 Glasgow Research & Consulting
33%
25%
14%
10%
18%
Aftermarket M&A by
supply chain position,
2021
OEM
Service provider
Transaction services
Distributor
Others
Entry of new players, Industry consolidation and integration forces all
aftermarket player to extend their value
• Experts predict that digital/e-
commerce new players will
expand their value chain in the
automotive aftermarket,
becoming the second most
important player after OEMs
within the next decade
• The growing and aging car parc,
increased utilization, and miles
driven are positive factors driving
financial performance and
contributing to increased
consolidation in the automotive
industry.
• # of transactions accelerated
from 275 in 2018 to 526 in 2021
New Players Industry Consolidation
526
transactions
10

12. Key Takeaways for Automotive in the GCC region
• Governments across GCC are actively promoting the use of electric vehicles (EVs) by offering various
incentives such as tax exemptions, free parking, and free charging at public charging stations
• Saudi Arabia has an expanding network of charging stations, with plans to install up to 50,000 charging
stations across the country by 2030.
• The UAE has an extensive network of charging stations, with over 300 public charging stations in Dubai
alone. This makes it easy for EV owners to recharge their vehicles
• In 2022, Lucid Motors has announced a new deal for the construction of a world-class production factory in
Saudi Arabia with a capacity of 155,000 electric vehicles
• Lucid Motors has announced that its first electric vehicle (EV) to be assembled in Saudi Arabia will be
launched this year September 2023
• Saudi Arabia has also launched its own electric car brand called Ceer, which is a joint venture between the
Saudi sovereign wealth fund PIF and the Taiwanese contract manufacturer Foxconn
Government
initiatives
1
Improved
Charging
infrastructure
2
Focus on
Manufacturing
3
© 2023 Glasgow Research & Consulting 11

13. © 2023 Glasgow Research & Consulting
Vishal Pandey
Glasgow Research & Consulting
Research and Consulting
P.O. Box 445190, Dubai, United Arab Emirates
Contact Information
Tel: +971 (0) 4 566 8869
Mobile: +971 (0) 55 974 4360
Email: vishal@glasgowinsights.com
Web: www.glasgowinsights.com