Global Spare Parts Market

The global Spare Parts market was worth USD 22.6 Billion to grow at a CAGR of 5.75% from 2021 to 2027 due to rising disposable incomes in emerging nations, particularly in Asia, and the permission of 100% FDI in countries like India provide attractive development prospects for the automotive sector in the area. Government incentives, rising regional demand, and cheap availability of raw materials are likely to be significant drivers of light-duty vehicle growth in the area, which will boost demand for spare parts throughout the forecast period. Access to a comprehensive component variety, along with the ease of transactions made possible by digitizing global automotive component sales, is intended to alleviate obtainability concerns, therefore propelling the spare part market. As more individuals become interested in the Internet of Things (IoT) and digitization trends, the resulting digitalization will significantly influence the sector. Furthermore, advancements in propulsion technology have provided various business prospects.

On the other hand, high research and development expenditures are projected to hamper market growth throughout the projection period. Automobile manufacturers have several limitations when it comes to their production methods. One of these restrictions is the cost of production. However, certain automobile replacement components, such as aftermarket filters, allow selecting a part appropriate for the vehicle’s operating circumstances.

What are Spare Parts?

A spare part is an interchangeable item maintained in stock and used to repair or replace failed units. Spare parts are an essential element of logistics engineering and supply chain management, and spare parts management systems are frequently used. A spare part is an additional piece, a replaceable component, or an item similar to and interchangeable. Construction spares, maintenance spares, capital spares, and insurance spare parts are among the types of spare components used in the project. Spare parts are critical in equipment maintenance since no equipment can be returned to its original state for proper operation without them.

Growth Driver

Rising scrapping rates

The demand for spare parts tends to rise as the scrapping of automobiles and engines rises. Because of more strict environmental rules in industrialized nations, scrap rates are greater, resulting in more frequent replacement of motor vehicles and their engines than in developing countries. Similarly, industrialized countries are more likely than developing countries to adopt new technology and advances in engines, such as hybrid engines. The rising demand for new cars with lower fuel consumption is fueled by greater government support with comparably tighter emission standards, resulting in increased demand for new vehicles with lower fuel consumption, fuelling the demand for the spare parts market.

Rising E-Commerce Market

Because of people’s increased online activities, the spare parts market is expected to develop positively. Technology advancements and significant improvements in logistics have enabled producers to deliver high-quality items more quickly, boosting the market’s development. Online purchasing for automotive spare parts is becoming more popular. As automotive technology advances, more hybrids and electric vehicles are introduced to the market, supporting the spare parts industry’s development. Furthermore, with the development of mobile purchasing, internet platforms such as Amazon and eBay are anticipated to positively impact the spare parts market.

Pre-Covid-19 impact on Spare Parts Market

In the pre-covid-19 period, the rise in the disposable income of consumers in emerging countries such as China and Brazil had a beneficial influence on the growth rate of the spare component market. The need for car components was expected to increase as demand for demand engines grew. Rigid regulatory requirements for automobile safety are expected to propel market economies across the world. Major players in the industry are extensively deploying modern-age production technology, such as E-commerce, to optimize their production costs, with online sales enabling rapid improvements in logistics, allowing manufacturers to offer high-quality goods faster and boosted the growth of the spare parts market in the pre-covid-19 era.

Covid-19 impact on Spare Parts Market

The spare parts market is the most vulnerable sector to the COVID-19 epidemic, and it is presently experiencing unprecedented instability. The COVID-19 pandemic harmed the spare component market, which may be linked to many production stoppages in the manufacturing industry due to government-imposed lockdowns and travel restrictions. The whole automobile industry’s supply chain has been interrupted, affecting the manufacture of replacement parts on the market. The spare parts industry’s main issue has shifted from disruptions in the world’s supply chain to a general drop in demand for automotive components. With the suspension of all non-essential services, demand for commercial vehicle components is projected to fall, limiting the growth of the spare parts industry.

Post Covid-19 impact on Spare Parts Market

The spare part market is projected to increase steadily since the demand for car parts is closely connected to automakers’ success, as they are the main buyers of industry products. One of the major elements driving the expansion of the spare part market in the post-Covid-19 period is the benefits of original replacement components. The growing demand for hybrid and all-electric cars and the increased availability of automotive components on e-commerce platforms are expected to drive market expansion over the forecast period. Furthermore, the growth in used automobile sales is anticipated to open up plenty of possibilities for major companies in the spare parts industry in the post-covid-19 era.

Type Segmental Analysis

By Type, the Spare parts market is segmented into Auto Vehicle engines, Power trains & Parts, Auto Vehicle Electrical & Electronic Equipment, others. In terms of market size, the auto vehicle sector led the market in 2020 and is expected to continue to do so in the coming years. Because engines have a shorter replacement cycle than their component equivalents, it is anticipated to remain the dominating category. Various accessories, lubricants, pumps, and other component providers make up the Auto vehicle spare parts suppliers. In addition, service enablers such as repairing services providers and entertainment service providers are part of the spare part industry value chain. The automotive industry is seeing a growth in demand for hybrid electric vehicles, which will ultimately stifle demand for exhaust components and specialist equipment for these specialized vehicles, boosting the need for auto vehicle parts.

Application Type Segmental Analysis

By Infrastructure type, the Spare Parts market is divided into Industrial Sector, Technology Industry, Automotive sector, others. The automotive segment is leading the spare part market in 2020 as the automobile sector operates in a fast-paced environment, with new technology appearing on the market nearly every day. As a result, vehicle part manufacturers align their strategies with current developments to maintain competitiveness in such a dynamic market. With the introduction of cutting-edge technology in automobile engine radiators, the automotive segment is expected to grow.  Leading firms are already preparing to manufacture lightweight vehicle components to create lighter and more fuel-efficient parts than their counterparts. Such innovative designs would enhance floor area while lowering costs, enabling the growth of the automotive sector.

Service Channel Type Segmental Analysis

By Service Channel, the Spare parts market is categorized into OEM, Aftermarket. The OEM segment is expected to dominate the spare part market during the forecasted period due to OEMs’ set goals for their service centers’ component sales. In these instances, it’s in the service center’s best interests to sell some of their monthly objectives on the open market. One of the key elements supporting OEM’s market domination is the growing demand of customers for warranties. OEMs provide goods that have a longer product lifespan, are more reliable, and perform better. Over the projected period, the factors above are likely to improve OEMs’ position in the spare part market.

Region Segmental Analysis

The Spare Parts market is segmented into North America, Europe, Asia Pacific, South America, and Middle East & Africa. The Asia Pacific region is leading the Spare Parts market during the forecast period. The region’s spare parts sales are projected to increase due to new technological applications in manufacturing automobile components. Rising sales and production of automobiles and the digitalization of distribution networks for automotive components are driving the regional market. Local firms and multinationals see the region as a source of components, intending to supply low-cost components to major car manufacturers.

Furthermore, with the availability of raw materials and low-cost labor, firms in the Asia Pacific region may offer significant cost savings. Furthermore, the area includes nations like China and India, which account for around 34% of worldwide car manufacturing. Active braking systems are becoming more popular, which helps sales of luxury and premium cars. The spare parts market is likely to develop during the projected period due to rising commercial and government investments and FDI participation.

Competitor Analysis 

Sumitomo, Denso, Magna International Inc., NTN Corp., Mando, Hyundai Wia, MRF, TVS, Bharat Forge, Continental AG, ZF Friedrichshafen AG, DENSO Corporation, and Lear Corporation and other prominent players are the key players of the Spare Parts market.

Key Stakeholders

• Market research and consulting firms
• Industry associations
• Global Spare Parts market product manufacturing firm
• Research organizations and consulting companies
• Organizations, associations, and alliances related to the Spare Parts market.
• Regulatory bodies
• Suppliers
• Retailers

Recent Developments

• In September 2021, Market Rate IQ, a new product from C.H. Robinson, is designed to help businesses navigate spot market prices by comparing current spot rates to a third-party benchmark and identifying areas where they may save money.
• In July 2021, Volocopterand and DB Schenkerr announced that they completed a collaborative static proof of concept (POP) for VoloDrone ground operations in logistics centers at Messe Stuttgart. With the help of the Fraunhofer Institute for Material Flow and Logistics, the partners are designing the first blueprint for electric cargo drone ground operations in logistics.
• In June 2021, Simon Loos announced using 22 Volvo FH 420 tractor units on LNG, primarily for national network distribution from Nieuwegein/Geldermalsen, to reduce his CO2 emissions significantly.