German Automotive Aftermarket Analysis

Perspective on the German Automotive Aftermarket . . .

Opportunites for India

© Peter Rehberg German Garage Equipment Association

Perspective on the German Automotive Aftermarket . . . Opportunites for India

ACMA Automechanika New Delhi 2013



Introduction

Mobility is the driving force behind our economy and a fundamental expression of human freedom. The automobile- and the related industry have, despite new Information Technologies, contributed and strengthened economic development more than any other industrial sectors. Especially in the short- and medium-terms the automobile is the dominant mode of transportation. This will not change in the next few years.

The Automotive Aftermarket has to follow the technology and trends of the vehicle market. Since the automobile is becoming more and more a computer on wheels we cannot repair these vehicles with mechanical tools.

The mechanical work is shifting to knowledge intensive electronically work (diagnostic) and the investment for computerised equipment, computer systems, networking and education is increasing dramatically.



Introduction

What perspectives as a supplier do you have in such a world? And I am not talking about the German market only because it is more or less the EU market.

What is the difference between Germany (EU) and India, what is equal?

In Germany as well as in India we want to make business and profit. That is the same in both countries! But the rest I think is quiet different.



saturated market on high techn. level growing market so far on lower techn. level

Germany India

high Tech Market with a lot of safety restrictions

still older technology, but high tech is growing very fast

high price level lower price level

car dealer / repair shops are fully equiped with tools an equipment

car dealer / repair shops have a growing demand for tools and equipment

a repair shop with old, mechanical equipment cannot survive in a world of computers and software!

Cars are more or less computer on wheels



Population: 81,9 mioWestern Europe: 415,0 mio

Population: 1,209 bill

Germany India

Cars in use: 42,9 mioTrucks in use: 3,1 mio

Cars in use: 10,0 mioTrucks in use: 14,2 mio

Density p. 1000 520 Density p. 1000 < 10

No. of car dealer: 17.000No. of independent repair shops 24.000

No. of car dealer: app. 4000No. of independent repair shops:

New registrations p. a. 3,2 mio New registrations p. a. 2,8 mio



Development of future passenger car demand



Total

Material

Labour

Development of the Repair Market in billion €

App. 85 Billion €Material EU



The German Automotive Aftermarket by Product Group

Spare Parts Chemicalswithout paint

Tires Accessories Body Repair /Glas / Paint

Others Tools / Repair-equipment

0

2

4

6

8

10

12 in billion € without VAT

0,9



33

Market Strukture of the Aftermarket

Manufacturer for Parts etc. AutomobileManufacturer

Whole Saler

Independ. Shop

46 000 000 Consumer (Driver)

21 bill. € (Parts only: < 10 bill. €)

Car Dealer Influ

ence

Trade Level

Repair Level

Automobile Manufacturer

Manufacturer Level

10 %

th

roug

h va

rious

cha

nnel

s

83 %

42 %

48 %

100

%

Consumer Level

10-15 %



Manufacturer for Parts etc.

Trader Trader

46 000 000 Consumer (Car Owner)

Distribution Center

Trade Strukture of the (independent) After Market

AutomobileManufacturer

Distribution Center

Manufacturer / Car Dealer with

Distrib. Function

Full Service Repair Shop

9700

IndependentRepair Shop

10800

Body Repair Painting

3000

Prof. Shops

800

Quick Service

400

Car Glass Specialists

1000

Tire Service

4000

InternetPlatform

Car Dealer- Cars- Parts- Service

AuthorizedRepair Shop- Parts- Service

Whole SalerColer

Cooperations(ATR)

Cooperations(CARAT)

Whole SalerStahlgruber

Whole SalerTrost

Whole SalerWessels



46 000 000 Consumer (Car Owner)

Trade Strukture of the After Market (controlled by the Vehicle Manufacturer)

Manufacturer for Parts etc.

Trader Trader

Distribution Center

IndependenRepairShop

10800

Body Repair Painting

3000

Prof. Shops

800

Car Glass Specialists

1000

Tire Service

4000

Whole SalerColer

Cooperations(ATR)

Cooperations(CARAT)

Whole SalerTrost

Whole SalerWessels

AutomobileManufacturer

Distribution Center

Manufacturer / Car Dealer with distrib. function

InternetPlatform

app

Car Dealer- Cars- Parts- Service

AuthorizedRepair Shop- Parts- Service

AuthorizedParts Dealer- Parts

app. 17.000 Outlets



How to sell into the German Automotive AftermarketComponents, Parts, Accessories, Equipment etc.

Branch Office Importer / Distributor Whole Saler

First you have to ask yourself: Why should a German distributor / garage buy your produkt?- Quality - Price - Speciality - Special Service - What is better than competition ??

Low Tech Products easier, price-sensitive, lot of competition

High Tech / Safety Products Difficult, Safety Certificate, Car Manufacturers approval

You have to find one big distributor / sales organisation who is willing to sell you product. The first one is the most difficult one (Launch). Keep in in mind:

• If you want to enter a new market you have to pay an entrance fee!

Especially in the beginning make sure people can trust you > Promises> Quality> Delivery Time> how do you eleminate problems

Last but not least you need a contact address in Germany!

First attampt could be an Exhibition in Germany (Automechanika)



Spezialgebiete von DEKRA sind: DEKRA can offer the following approvals:

Sitze und deren Verankerungen, Kopfstützen Seats and seat anchorages, head restraints

Sicherheitsgurte und deren Verankerung im Fahrzeug Seat belts and seat belt anchorages

Schalldämpfer und Abgasreinigungssysteme Silencers and exhaust emission control systems

Abgas, Motorleistung, Kraftstoffverbrauch Exhaust emission, engine performance, fuel consumption

Motor-Leistungsänderungen, Motortuning Engine performance modification, engine tuning

Alternative Antriebe, Flüssiggas, Erdgas Alternative fuels, LPG, CNG

Kinderrückhalteeinrichtungen und Befestigungssysteme im Fahrzeug

Child restraint systems and fastening systems in the vehicle

Fahrzeugverbindende Einrichtungen (Kupplungskugel, Anhängerkupplungen, Sattelkupplungen)

Vehicle connecting systems (coupling ball, trailer towing devices, fifth wheels)

Anbauteile wie Spoiler, Verkleidungen, Kraft-radverkleidungen

Add-on parts like spoilers, coverings, motorcycle coverings

Hinterer Unterfahrschutz und seitliche Schutzvorrichtung Rear underride protection and lateral underride protection

Elektronische Baugruppen (EMV) Electronical components (EMC)

Safety Parts – Approvals etc.



Heizungen Heaters

Bremsenteile (Bremsbelag, Bremsscheiben, Bremstrommeln), Umbauten von Bremsanlagen

Brake parts (brake lining, brake discs, brake drums), rebuildings of braking systems

Auflaufbremsanlagen Overrun braking systems

Fahrwerkstieferlegungen (Federn, Stoßdämpfer) Chassis tuning (springs, shock absorbers)

Fahrwerksteile (Festigkeit) Chassis parts (strength)

Spurverbreiterungen (Distanzscheiben) Track change (spacing rings)

Sicherheitsglas Safety glass

Begutachtungen von Fahrzeugteilen Examination of vehicle parts

Erteilung einer Betriebserlaubnis für Fz-Teile Granting an operating licence for vehicle parts

Erteilung einer Bauartgenehmigung für Fz-Teile Granting a type approval for vehicle parts

Erteilung einer EG-Typgenehmigung für Fz-Teile Granting an EC type approval for vehicle parts

Erteilung einer ECE-Genehmigung für Fz-Teile Granting an ECE approval for vehicle parts

Erstellung eines Teilgutachtens Drawing up a vehicle part test report

Safety Parts – Approvals etc.



The Market Players

Vehicle Manufacturer VDI (Automobile Manufacturers Association)

VDIK (Automobile Importers Association)

Parts Manufacturers VREI (Parts Manufacturers Association)

Equipment Manufacturers ASA (Garage Equipment Association)

Trade (Distribution) GVA (Distributors Association for Parts, Accessories, Repair Equipment etc)

Trade CooperationsATR, CARAT, CENTRO, COPARTS, TECHNO, ATU

Automobile Trade ZDK (Car Dealer Association) - Car Dealers / Independent Repair ShopsZKF Body Repair Shop Associaton

Car Inspection TÜV (South, North, Rheinland, Hessen, Saarland)

Safety Approvals DEKRAISO 9000-Certification



The Market Players

Information Systems TecDoc (Electronic Catalogue)

TecCom (Auto Portal / E-Commerce)

AutoData (Repair Information)

DAT (Repair Information and Calculation

Schwacke (Information / Calculation)

Trade Magazins Springer Auto Media ASP / Autohaus

Krafthand Verlag Krafthand

Grüter Verlag amz

Vogel Verlag kfz-betrieb

Exhibitions: Messe Frankfurt GmbH www.messefrankfurt.com

automechanika Frankfurtautomechanika Global

www.wlw.de

http://www.messefrankfurt.com/



Summary

The motor trade in Germany is subject to dramatic changes at present time. The number of car dealers and workshops (the official number of approx. 44,000 is, in our opinion, not correct anyway) will slow down to approx. 30,000. Despite this, a turnover-volume for parts, accessories, tires, chemistry and workshop equipment remains at approx. € 21 bil.

New distribution systems will be established in the automobile trade. In future the internet and IT will influence the market strongly and will totally turn around some market segments.

Although the Automotive Aftermarket is very conservative, the number of computer equipment and internet users is growing rapidly. The earlier one gets into new information technologies, the bigger the chance one has to belong to the winners of the market, despite all risks that still lie in E-Commerce at present.



Summary

Thank you and good luck !

With approx. 70,000 B2B-Users there will be – apart from the competition situation of the suppliers among each other - two to three further portals established. If they can assert themselves depends on their performance, how quickly they will be established and if they can build up a reasonable number of customers. The support of the parts industry and wholesaler organisations will also depend on these factors.

In the workshop equipment market we can record a market saturation at a high level. On the other hand, due to new vehicle technologies, further electronics as well as new legislations (EOBD) we can expect new demand for repair equipment. In addition computerized (no paper) workshops definitely will establish networks within the repair shops.

Releases within the automobile industry will be given more to the global players, who have the necessary strength and power for new innovations and can show a worldwide service network..

German Automotive Aftermarket Analysis

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