Highlights from our annual auto parts industry analysis
(NOTE: this article is from January, 2019. For a more current forecast click here.)
• Online auto parts market will pass $12B in 2019 in the US; Projected at $19B by 2022.
• North American auto parts online market nearly $16B in 2019, excluding auctions, used parts.
• Digital: Auto parts industry analysis shows $148B in parts sales influenced by online. Will grow to over $160B in 2022 (scroll down).
• Over $7B in online parts sales will be on mobile in 2019 (scroll down).
• Amazon auto parts sales will pass $8B in in 2019 (scroll to bottom).
In our annual auto parts industry analysis, the U.S. online automotive market will continue its impressive growth rate. It will exceed $12 billion for the first time. This is a little more than a 16% increase over 2018 online parts sales.
Online auto parts market size will pass $12 Billion in 2019, more than a 16% increase from 2018 Click To TweetWe estimate that online parts sales in Canada will reach C$3.8 billion/US$2.9 billion in 2019. Online parts sales in Mexico will come in around US$700 million. That makes the North American online auto parts market size about US$15.9 billion in 2019.
Although not part of our auto parts industry analysis, the Australian online market for auto parts was estimated at $484 million in 2018, growing at 7% per year. That puts the Australian online parts market around $518 million in 2019.
Auto parts industry analysis: Digital impact on retail sales
Digital influence is an overwhelming factor on online parts sales, as well as on sales through brick & mortar retailers. Just over $148 billion in auto parts & accessory sales in the U.S. will be influenced by digital in 2019.
First, let’s define digital influence.
It’s something that occurs along a consumer’s path to purchase as consumers and service professionals search for and read information online. It’s also when they read reviews, as they are exposed to product and brand advertising, and as they watch video advertising or video content.
Nearly all consumers do online research along their Road to Purchase. About nine out of 10 consumers now do some form of research online before they purchase an auto part or accessory. This happens whether they eventually buy at a brick & mortar retailer, or buy online.
Digital affects auto parts retail market in many ways
This online research includes looking for information and reviews. They also verify fitment on manufacturers’ websites. Consumers are exposed to online advertising. They also go to automotive forums, or conduct specific long tail searches on Google or Bing.
Hedges & Company consumer surveys show four sources for online research have most of this online activity. They are online search (74% of all consumers); auto parts retailer websites (73%); manufacturer websites (57%) and automotive forums (47%).
Consumers are exposed to more online advertising every year. This includes text ads on Google or Bing. Google Shopping and Bing Shopping have increased as sources of information. Banner ads on websites create billions of impressions each month.
By 2022, the internet’s influence on parts and accessory sales will increase to over $160 billion in parts and accessory sales. This includes auto parts sold through chain retail stores, automobile dealers, big box retailers, local independent brick & mortar retailers and jobbers.
It also includes online sales. By definition, 100% of online sales count as influence from digital.
Auto parts industry analysis: Online market includes $7.5 billion from mobile in 2019
It’s almost a daily occurrence for many people today. That includes consumers shopping for auto parts and accessories.
Online sales transacted on mobile phones will account for $7.5 billion in the U.S. in 2019. That’s about a 30% increase over 2018 when mobile nearly hit $6B. Today most parts and accessory websites get more than 60% of total traffic on mobile devices.
Mobile auto parts eCommerce will continue to grow rapidly online. It has an annual growth rate of over 25% projected over the next few years.
Most of the automotive aftermarket has transitioned to mobile-friendly websites. But, today you need to pay attention to marketing to mobile devices and users, too.
Mobile #autoparts sales will be $7.5B in the U.S. in 2019 Click To TweetIf you’re not testing different strategies and bid modifiers for mobile phones and tablet it’s time to start.
Going back to our reference under digital influence to the consumer’s Road to Purchase, not only are consumers shopping on mobile devices, they’re shopping on all devices depending on how far along they are on the “Road.” It’s common for consumers to use multiple devices while making a buying decision.
Quite often, online research is completed, a decision is reached, then the consumer’s mobile phone is merely the last device used to buy a product.
Amazon auto parts sales
Amazon continues to grow as a source for auto parts and accessories.
Our forecast puts Amazon auto parts sales, accessories, and car care product in 2019 at $6.3 billion, plus $1.6 billion in OEM replacement parts sales for a combined total of $8 billion. We see Amazon’s amazing growth rate to slow slightly over the next few years.
In 2019, @Amazon will sell $8 billion in OEM replacement #autoparts and #aftermarket parts and accessories Click To TweetMost of Amazon auto parts sales growth comes from direct Fulfillment by Amazon (FBA) sales, known as “first party sales” or “1P.” 1P sales typically include Amazon Prime offers. Most of Amazon’s 1P sales come either from manufacturers supplying Amazon direct or from warehouse distributors (WDs). We’re projecting Amazon’s 1P sales to hit $5.3 billion in 2019.
We’ve seen projections from other sources that put Amazon’s 3P sales even higher in 2019, as high as $4.4 billion. Using the $4.4 billion projection, that would put 3P sales between $7 billion and $8 billion in 2022.
Amazon is on a mission in 2019 to move more important high-volume automotive products to 1P. They want to shift more of the smaller automotive brands and low volume auto part numbers to 3P.
We don’t include 3P sales in our annual forecast of online sales. Many of these 3P retailers also sell through other channels. See the methodology below for more explanation.
More auto parts industry trends: size of 3P marketplaces
How big are third party marketplaces? We don’t track sales of aftermarket auto parts through marketplaces like Amazon 3P, eBay Motors, the new Google Express or Walmart, but the folks at GCommerce do. They work with aftermarket companies to transfer data all along the supply chain. They’re projecting aftermarket sales to be $17 billion by 2020.
Auto parts industry analysis methodology
We’ve tracked the online automotive market every year going back to 2007. To do that, we use a combination of proprietary industry research. This includes analysis of trends, data from the U.S. Census Bureau, and data from the U.S. Bureau of Economic Analysis. We interview industry leaders and influencers and utilize analysis of third-party data with statistical modeling.
Sales statistics are for the U.S. only unless specifically noted for Canada, Mexico or the North American aftermarket industry.
In our annual forecasts, we only count online sales of new and re-manufactured auto parts. This includes the type of parts that SEMA market research would call “specialty equipment” parts and accessories. It also counts replacement parts (including OEM replacement), an important category of the overall auto care industry. We don’t include used or recycled auto parts. We also don’t include data from online auctions such as eBay Motors or other third party marketplaces. These virtual marketplaces are an online sales channel where sellers sell through Amazon (separate from direct sales through Amazon), Jet.com, Newegg.com, Walmart.com, and other similar sites.
Nearly a third of Amazon’s auto parts sales are third party “3P” sales. We exclude these from our annual automotive industry analysis.
For our annual analysis we consider eBay and most third party marketplaces to be sales channels. Many online retailers sell through their own websites as well as multiple other sales channels. Including them results in double counting. Including auctions would also include individuals selling used parts.
For more information on these automotive aftermarket trends you can also contact SEMA market research directly. You can also refer to Auto Care Association market research.
Quoting this trends article
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Full disclosure: Hedges & Company principals do not directly own stock in any of the companies mentioned in this article. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in investment activity. There are other liability restrictions on utilizing this market research available on our legal page.
There are other reports covering eTailing for the automotive industry, including the “Disruptive Trends Shaping the Future of Auto Care Industry” report from the Auto Care Association (not affiliated with our report published here). That 2019 report is available here.
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