What will the aftermarket look like in 2035?

electric vehicles. Ecommerce. vehicle complexity. consolidation. Autonomous driving. connectivity. How will these and other trends impact the automotive aftermarket over the next decade, and more importantly, how should aftermarket suppliers respond?

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A new study — “The US Automotive Aftermarket in 2035” — seeks to answer those questions, with aftermarket suppliers “confronting more tipping points than ever before,” according to Automotive Aftermarket Suppliers Association (AASA) President and CEO Paul McCarthy .

“And the reality is we can’t handle them all,” McCarthy said at the 2022 AASA Vision Conference in Dearborn, Michigan. “So we need to understand which ones will really bother us and which ones might be less important. Because if we know one thing, the aftermarket in 2035 will not look like it does today.”

about:blankPerformed by the management consultancy Roland Berger, the study deals with the current and future situation of the automotive aftermarket. One of the most alarming conclusions from the study is that aftermarket suppliers are unwilling to address nine high-impact trends: BEV (Battery-Electric-Vehicle) penetration; e-commerce and o2o (online-to-offline); consolidation; labor shortage; supply chain disruption; data access; autonomous driving; supply chain footprint; and sustainability.

Barry Neal, Senior Partner at Roland Berger, and Neury Freitas, Principal at Roland Berger, presented an overview of the study results at the AASA Vision Conference. Here are some of the highlights.


How big and how fast will BEVs impact the independent aftermarket? It all depends on what part of the market you serve.

The study estimates that by 2035, only 2% of vehicles 12 and older will be electric, while 11% of 8- to 11-year-old vehicles will be electric. However, the impact of BEVs will be more pronounced on newer vehicles, as 32% of 0-3 year old vehicles are expected to be electric.

“The more dependent you are on the OES or OEM channel, the more or sooner EVs will actually impact your business,” Freitas explained.

At 100,000 miles, BEVs require 50% fewer service visits than internal combustion engine vehicles, based on OEM service recommendations. At 200,000 miles, that gap shrinks slightly to 47%.

“There are clearly services that will disappear in an electric vehicle,” Freitas said. “Everything to do with the engine, everything to do with the combustion, will go away.”

BEVs require battery coolant, but due to regenerative braking, EV braking systems typically last longer.

“The hoop players are really happy,” added Freitas. “They wait for EVs because either you have a heavier vehicle that needs a stronger tire structure – so they’re more expensive – or if you use a regular tire, it wears out quicker. So that’s positive.”


The pandemic has accelerated o2o’s growth in the automotive aftermarket as more consumers buy parts and book appointments via their mobile devices. The linking of the offline and online world “brings many advantages and a lot of convenience for consumers,” according to Freitas.

Increased consumer convenience and cost savings across the value chain will continue to drive o2o’s growth in two phases: parts efficiency as proactive diagnostics and digital parts/service selection and planning enable a lower cost structure; and labor efficiency as advanced booking/scheduling and predictive maintenance improve workload and throughput.

“As a first step, if you get the increased convenience for consumers along with the potential cost savings of knowing what parts are needed and where they are needed before they are actually needed, you can save a few steps [from] in the value chain and in the supply chain, and you can actually save real money because you don’t need a hot-shot [delivery], for example,” explained Freitas. “And then, as a second step, once we’ve reached a large enough critical mass and the workshops are able to schedule similar services sequentially, we might be able to get some efficiencies from the technicians as well.”


According to Roland Berger, the US is the leader in consolidation, with the top 10 distributors in the US Independent Automotive Aftermarket (IAM) holding 75% to 80% of the total market share. Europe is a distant second at 30% to 35%, while China is at 5% to 10%.

Roland Berger sees further consolidation for parts suppliers and service providers (mechanics and collision). Going forward, there won’t be as many opportunities for large retailers to acquire distributors, Freitas assured.

“Therefore, if one of these big companies has a hiccup in the next 12, 13 years, we see a chance that two of these top four or five players will actually merge and become an even bigger player,” added Freitas.


Looking at the bigger picture, unemployment rates in the US were at historic lows in the years leading up to the COVID-19 pandemic. As the pandemic escalated in early 2020, it skyrocketed. Since then, the unemployment rate has been steadily declining. According to the US Bureau of Labor Statistics, the unemployment rate fell to 3.6% in March.

Neal and Freitas presented two charts that bode ill for the future of IAM. A chart showed a steady decline in the number of students completing post-secondary degrees in automotive repair since 2010. The other chart showed the imbalance between tech supply and demand since 2010. While the tech shortage is nothing new, the gap between supply and demand is expected to widen in 2025 and beyond.

Freitas concluded: “Unless the industry really organizes itself, we don’t think this problem will be solved anytime soon.”


The headline reads: China seems to be losing its cost advantage – even without tariffs.

If you wanted to make products cheaply, China has been the obvious destination for the past decade. However, factoring in the rising cost of outbound freight, raw materials, manual labor and other variables, China will lose its cost advantage to Mexico as soon as this year. By 2035, according to Roland Berger, it will be significantly cheaper to manufacture goods in Mexico compared to China due to the projected increase in labor costs in China.

Not surprisingly, Roland Berger predicts that the proportion of U.S. auto parts made in Mexico will rise from 24% in 2020 to 31% in 2035.


By 2035, nearly 100% of new vehicles sold in the United States will be connected, meaning they will be able to receive and transmit information. Extrapolated to the entire US vehicle fleet, 66% of the vehicles will be connected.

How we’ll get to this point – and how that will impact IAM – is less certain. Currently, automakers control most of the data generated by vehicles, which is bad for consumers, bad for IAM suppliers, and good for OEMs. In the medium term, Roland Berger anticipates a shift towards open APIs (Application Programming Interfaces) and “mixed control” of vehicle data.

In the long term, a move towards open APIs and open data would be best for IAM providers. However, where we end up will likely be determined by federal legislators and the OEMs.


Given the results of the study, Neal and Freitas outlined a number of potential steps IAM suppliers could take.

“In terms of individual responsibilities, it’s important to review the portfolio and product strategy,” Neal said. “As you look at the influx of new technologies, both electronics, battery electric vehicles, ADAS and autonomous, how do you align your portfolio with them and what is your strategy, be it a last man? -Standing strategy or looking for a third foothold in relation to other opportunities or developing an EV strategy to take advantage of some of the new opportunities that are emerging?”

Referring to the tech shortage, Neal also emphasized the importance of supporting trade schools “as well as advocacy support at the high school and middle school levels for robotics programs and mechanical programs to ensure interest in this future tech force as well as industry level support for new entrants and opportunities supporting aspects such as augmented reality and remote support for on-site technicians so that some of these newer solutions can support a broader workforce in terms of the skills set in the technology in the future.”

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