The aftermarket for car parts and workshop services in the Nordic region is a mature market with a growth of 1–2 per cent per year. The main drivers are the number of cars on our roads and how far these cars are driven.
In recent years, both the growth of the car fleet and how far the cars are driven have had a good development in our main markets of Sweden and Norway. A strong driver behind the growing car fleet is strongly increased new car sales. Since 2014, the number of newly registered cars has increased and in 2017, 392,728 new cars were registered in Sweden and 158,650 cars in Norway, according to SCB and OFV. The aftermarket for car parts and workshop services is not affected directly by more new cars sold. The cars have a larger effect on the aftermarket only after four to five years when the car parts begin to wear out and need to be repaired or replaced. In 2017, we did not see any notable effect of the recent years’ new registrations, but as these cars age, we see a potential for a growing aftermarket for car parts and workshop services. This presupposes that scrapping or export of cars does not increase from today’s level.
The market for car accessories is generally more sensitive to economic fluctuations than the market for spare car parts and the trend largely follows household consumption. In 2017, household consumption increased by 2.4 per cent in both Sweden and Norway according to SCB and SSB.
- The difference between brand-dependent and brand-independent players has increasingly been erased
- There is a continuing trend in Europe towards greater consolidation to achieve profitability through synergies
- The average age of the European car fleet is increasing
- The number of electric cars and hybrid vehicles is continuing to grow
- Demand for a higher degree of technical expertise and advanced equipment
- Continued interest in new ways to access cars, eg private leasing and car sharing
- The market for digital services is growing rapidly, with new business models and offerings
Consolidation in Europe is continuing
In Europe, a consolidation of the market for spare car parts is taking place where the actors are becoming fewer but larger. Through acquisitions, positions in new and existing markets are being strengthened and synergy effects are being created through larger purchasing volumes and more efficient logistics solutions. The market for workshops is also undergoing change, where the larger workshops and chain workshops are growing in number. Small and medium-sized independent workshops are having a harder time to assert themselves in the competition as the technology in the cars is becoming more advanced. Major chains can offer adapted concepts, customised professional development, smart logistics solutions with an adapted product range and technical support, and it is therefore increasingly attractive for workshops to belong to a chain. The car owner is benefited since this contributes to more adapted and affordable services and products.
Decreasing difference between brand dependent and independent actors
The difference between brand dependent and independent actors is decreasing over time. We are active in the same market, but with different offerings and prices. The customer chooses the spare part distributor or workshop that they have confidence in and feel is most affordable.
Quality assured workshops
In 2017, the Godkänd Bil verkstad (Approved Workshop) was developed as a common Swedish quality standard for all of the workshops in the country to relate to. The quality standard not only ensures that an Godkänd Bilverkstad does the work professionally, but also that the workshop follows laws, rules and industry recommendations and has the right expertise and technology to do the work. In 2018, the implementation of the Godkänd Bilverkstad will begin in the Group’s workshops in Sweden. In Norway, there were already requirements on certification and audit to be able to start a workshop.