Automotive Parts Remanufacturing Market Forecasted to Reach US$ 91 Bn Value by 2
Posted by Pradnya on March 5th, 2019
Automotive parts, after a certain period of usage, undergo wear and damage, and require replacement. Automotive parts will thus continue to witness significant demand in the aftermarket, which in turn is likely to create multiple growth opportunities for the automotive parts remanufacturing market players.
Attractive cost savings and profitable margins associated with the automotive parts remanufacturing market have been securing a profitable position for automotive remanufacturers over the years. Remanufactured parts cost nearly 50-75% as much as the original product - while providing the same quality, which remains the key booster to demand growth of remanufactured parts.
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The global automotive parts remanufacturing market is estimated to grow at a value CAGR of 7.1% over 2018-2026, roughly equating US$ 91 Bn by the end of 2026.
Automotive Parts Remanufacturing Market Analysis by Component
By component, electrical & electronics parts are projected to lead the automotive parts remanufacturing market in terms of value. The growth of this segment can be primarily attributed to increasing rate of replacement of alternators and starters. Engine and related parts also hold a significant value share in the automotive parts remanufacturing market, i.e. over 30%.
Automotive Parts Remanufacturing Market Analysis by Application
On the basis of application, the passenger cars segment is projected to register the highest CAGR growth and account for 37.1% of the total market share in the automotive parts remanufacturing market. Growing individual buying power and growing need for personal commute are some of the factors responsible for the growth of the segment in the global automotive parts remanufacturing market.
Automotive Parts Remanufacturing Market Analysis by Region
On a regional level, North America is projected to retain the lead in global automotive parts remanufacturing market, in terms of revenue share. Europe is estimated to follow North America and will reportedly generate significant demand for remanufactured automotive parts in the coming years. In terms of growth rate, China is estimated to lead the automotive parts remanufacturing market, followed by Latin America and South East Asia Pacific, as these regions are witnessing high volume automotive sales, subsequently followed by notable demand for automotive parts.
Increasing Average Vehicular Age to Drive Demand for Replacement and Maintenance of Automotive Components
With improvements in material and technology used for automotive manufacturing, the average operational age of automotive vehicles has increased substantially. The number of vehicles more than 12 years in age is projected to increase by 15% over the next five years. The number of vehicles that are 16-24 years old increased 1.3X in 2015 as compared to 2000, which is expected to create significant demand for automotive parts remanufacturing market.
? As suggested by a recent consumer survey, a considerable number of people are consciously keeping their old cars as alternative vehicles rather than selling them. As a result of increasing vehicle age, there is a significant need for repair and replacement of parts, which is expected to drive the demand for automotive parts remanufacturing
Automotive Parts Remanufacturing Market Structure Analysis
The global automotive parts remanufacturing market is fairly fragmented, owing to the presence of a number of large multi-national corporations, followed by a fair share of domestic players spread across various regions.
The tier-I players are estimated to occupy approximately 25% - 30% of the automotive parts remanufacturing market, while the tier-II players are estimated to account for approximately 35%-45% of the market share. Tier-III players are estimated to account for approximately 25-35% of the market share in the automotive parts remanufacturing market.
Some of the key global market leaders in the automotive parts remanufacturing market are Volvo AB, Robert Bosch, BBB Industries, Cardone Industries, Valeo SA, Meritor Inc., ATC Drivetrain LLC, and Motor Parts of America, among others.
