E-Commerce Will Significantly Change the Automotive Aftermarket

26 October 2000

E-Commerce Will Significantly Change the Automotive Aftermarket According to Lang Marketing

    WYCKOFF, N.J. - The automotive aftermarket, an industry exceeding $110 billion in 2000 product volume, is in the early stages of a long-running e-commerce revolution in which many aftermarket structures, business practices, and players will be changed or replaced. Lang Marketing (www.langmarketing.com) has concluded an extensive examination of e-commerce and formulated ten predictions covering its aftermarket impact.

    1. E-COMMERCE WILL INCREASE AFTERMARKET VOLUME
    B2C (business-to-consumer) e-commerce will significantly increase
    accessory volume, with DIY replacement products and chemicals
    getting a sales boost as well. The Service market
    (installation by mechanics) will also increase as a result of
    a variety of e-commerce initiatives.

    2. E-COMMERCE WILL CHANGE THE AFTERMARKET PRODUCT MIX
    Accessories and other discretionary aftermarket purchases will
    receive a substantial sales boost from B2C e-commerce through
    increased product selection and buying convenience.

    3. E-COMMERCE WILL GENERATE A BRAND RENAISSANCE IN THE
    AFTERMARKET
    Manufacturer brands took a beating in the brick-and-mortar
    aftermarket during the 1990s. E-commerce will help reverse
    this trend. Brands serve as a guarantee of quality and value
    on the Internet. This will raise the standing of manufacturer
    brands throughout the aftermarket.

    4. E-COMMERCE WILL REDEFINE THE KEY ELEMENTS OF COMPETITIVE
    EFFECTIVENESS
    E-commerce is causing a shift in the competitive paradigm from
    physical assets such as locations and stores to knowledge and
    information conveyed through the Internet regarding products,
    customers, brands, pricing, etc. Brick-and-mortar businesses
    which leverage their physical assets on the Internet will gain
    substantial advantages.

    5. E-COMMERCE WILL BRING GREATER CHANGE TO THE SERVICE MARKET
    THAN TO THE DIY MARKET
    While B2C activity will initially focus on DIY sales, e-commerce
    will play a pivotal role in determining when and where
    consumers have vehicle service performed as well as how that
    service is done. In particular, the Internet will bring about
    a reduction in the vast amount of unperformed light vehicle
    maintenance (estimated by Lang Marketing to top $43 billion
    during 2000).

    6. AFTERMARKET BUSINESS-TO-BUSINESS (B2B) E-COMMERCE WILL GROW
    MUCH LARGER THAN AFTERMARKET BUSINESS-TO-CONSUMER (B2C)
    E-COMMERCE
    Within three to six years, B2B aftermarket e-commerce volume will
    be more than ten times the size of B2C e-commerce aftermarket
    sales.

    7. AFTERMARKET DISTRIBUTION WILL BE MORE CHANGED BY E-COMMERCE
    THAN AFTERMARKET RETAILING
    While B2C e-commerce will grab the initial headlines, the
    distribution of aftermarket products will be changed more in
    the long run by e-commerce than will aftermarket retailing,
    particularly by the dynamic growth of B2B e-commerce.

    8. E-COMMERCE WILL TEARDOWN BUY-SELL BARRIERS IN THE AFTERMARKET
    Sales and product flow in many aftermarket segments have become
    increasingly controlled by "gatekeepers": organizations,
    agencies, and programs controlling buy-sell relationships. The
    direct nature of B2C and B2B e-commerce will teardown many of
    these barriers.

    9. BRICK-AND-MORTAR AFTERMARKET PLAYERS WILL STRIKE BACK WITH
    INNOVATIVE E-COMMERCE INITIATIVES
    While pure-play e-retailers have grabbed the initiative
    (particularly in the B2C sector), the brick-and-mortar
    aftermarket establishment is building an e-presence of its
    own, combining local product availability with innovative
    e-commerce strategies that will not only sell products over
    the Internet but also bring customers to their stores.

    10. E-COMMERCE INITIATIVES BY AUTOMAKERS WILL DRIVE AFTERMARKET
    B2C AND B2B CHANGES
    From Internet-ready cars to selling new vehicles on the Internet
    and setting up parts exchanges for their suppliers, automakers
    are rushing to transform their companies from rust-belt
    legacies into high-tech cutting-edge companies. All of these
    changes will fuel the e-commerce aftermarket revolution.

    About Lang Marketing

    Lang Marketing is a leader in research and analysis of the vehicle products industry, providing a wide-range of multi-client reports and proprietary services to manufacturers, distributors, and retailers of vehicle products, as well as the financial community. Lang Marketing's newest intelligence report, eAftermarket(TM), focuses on the e-commerce aftermarket revolution (published the 1st and 15th of each month). The monthly Lang Report(R) is a primary information source for the vehicle aftermarket.

	   

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