The Aftermarket Conference, the largest aftermarket event of the automotive industry, was held for the 13th time this year. At the event, which was organized with the participation of the leading names of the industry, “The Effect of Electrification on the Aftermarket” was discussed. TAYSAD Chairman of the Board Albert Saydam, who opened the event, said, “Transformation is a must in the new world order. As TAYSAD, I want to openly admit that we have not given enough importance to the aftermarket. For this reason, maybe it is to increase the share of imports in the aftermarket in our country. I would like to underline that sustainable development will definitely reduce consumption and provide domestic production instead of imports.
Paul McCarthy, President and CEO of MEMA Aftermarket Suppliers, one of the important names of the conference, said, “If you come to Los Angeles, almost every vehicle looks like a Tesla. But to speak the truth, only 3 percent of vehicles in Los Angeles are electric. Let's look at San Francisco, Silicon Valley. We only have a 5 percent rate of electric vehicles,” he said. Despite this, Paul McCarthy pointed out that 2030 percent of the growth in the aftermarket market by 40 will come from the components of electric vehicles, and said, “This rate will increase even more until 2035. Therefore, if we want to increase the rhythm of the market, we say to our members: We cannot ignore this opportunity. We need innovation. We need to take advantage of these new technological opportunities. A few years ago there was panic in the aftermarket. We see that people are creating business plans, they are excited about the possibilities, entrepreneurship is increasing, and entrepreneurs are responding to these opportunities," he said.
The only Aftermarket Conference of the industry, which was held in cooperation with the Automotive Vehicles Supply Manufacturers Association (TAYSAD), the Automotive Industry Exporters' Association (OIB) and the Automotive Aftermarket Products and Services Association (OSS), was held in Istanbul for the 13th time this year. At the event, which hosted a giant meeting on a global scale, striking findings and predictions regarding the sector were discussed. At the conference, which was held with the theme of “The Impact of Electrification on the Aftermarket”, manufacturers, suppliers, distributors and independent services as well as global stakeholders and leading names of the industry shared their tricks to prepare for the electric car era.
We do not give the necessary importance to the aftermarket!
TAYSAD Chairman of the Board Albert Saydam, who opened the event, noted that electrification is a sub-title of sustainability and that sustainability as a sector should be questioned in every step and decision to be taken. Stating that transformation is a must in the new world order, Albert Saydam said, “Unfortunately, we do the transformation not by will, but out of necessity. We can do the conversion faster when it is done out of necessity. While making this transformation, I would like to underline two issues. Agility and diversity. By diversity, we mean diversity on a product basis, on a geographical basis, on a sectoral basis, and on a customer basis. As TAYSAD, I want to openly admit that we have not given enough importance to the aftermarket. For this reason, maybe it is to increase the share of imports in the aftermarket in our country. I would like to underline that sustainable development will definitely reduce consumption and provide domestic production instead of imports.” Speaking at the opening, OSS President Ziya Özalp said, “As aftermarket manufacturers and distributors, we managed to stay positive despite all the challenging conditions. After the structural change in the automotive industry, I can say that we have continued the upward trend of the last 2 years this year, despite all the uncertainties in the world and the facts that no one could have foreseen by the pandemic. OIB President Baran Çelik also gave the following information at the opening: “We have an export that increased by 2 percent in the first 4 months and reached 11 billion dollars in total. With an export of nearly 11.3 billion dollars this year, we will complete this year with the highest export value of our Republic."
Being an aftermarket supplier is very difficult!
Following the opening of the conference, Paul McCarthy, President and CEO of MEMA Aftermarket Suppliers, made a presentation titled “Electrification and the Impact of Advanced Vehicle Technologies on the American Aftermarket”. Stating that MEMA is the equivalent of OSS Association in the USA, Paul McCarthy said, “We call advanced technologies CASE technologies. So we're talking about connected, automated, shared and electrical technologies. Therefore, these technology sets are causing a huge transformation in our industry. Previously, it was thought that the aftermarket market would also shrink due to the decrease in the number of parts with electrification, whereas electrification will increase the aftermarket market. The challenge of managing two jobs at the same time in the aftermarket… The first is to maximize revenues in our current businesses. We need to work on profitability and at the same time we need to work on growing our new and innovative businesses. And we need to do all this from the perspective of connected, automated and electric vehicles. This is a huge challenge. Therefore, it is very difficult to be an aftermarket supplier right now and we need a very profitable future.” Pointing out that electric vehicles will be sold in the majority of the market by 2035, accompanied by an aggressive growth policy, Paul McCarthy continued: “We expect almost every vehicle to be electric by 2045. On the operational side, the situation is different. We expect only 2030 percent of vehicles in operation to be electric by 10. The vast majority of them won't be in the repair market either. And they expect 2035-10 percent of vehicles on the road to have an internal fuel system by 15. But in the US there is a large pool of vehicles and it is very difficult to convert it. We have 300 million vehicles and we have a vehicle lifespan of 2,5 years. The service life of the vehicle is normally 20-25 years. But what does this mean, if the vehicles sold today are in question, these vehicles will still be on the road in 2045. In the USA, the government is close zamCurrently, it wants 2032 percent of new light passenger vehicles to be clean (electric, hybrid and hydrogen fueled) vehicles by 67.”
Even in Silicon Valley, the electric rate is only 5%!
Stating that MEMA members are very enthusiastic about decarbonizing transportation, Paul McCarthy said, “The targets set by the government are far from achievable for us. The average price of an electric vehicle is 72 thousand dollars. And it's higher than the average income in the US. So most American citizens can't get it. We have a scenario like this. As we move towards an electrified future, there will still be conventional vehicles that are getting older and older. This is not just about the USA. National electricity distributors around the world see that they need to double their investments in their electricity grids every year. Therefore, we need to work harder for clean energy production. Also, a very high percentage of charging stations are located in China. There are 500 thousand charging stations. And we need 3 million charging stations. And right now most of the stations in the USA are not working properly. And our customers look at it as an aftermarket opportunity. If you're coming to Los Angeles, almost every vehicle looks like a Tesla. But to speak the truth, only 3 percent of cars in Los Angeles are electric. Let's look at San Francisco, Silicon Valley. We only have a 5 percent rate of electric vehicles,” he said.
Stating that the aftermarket sector has enough time to adapt in sustainability, Paul McCarthy said, “By 2030, most of the spare parts will be electrical components. This rate will increase in 2045. What does this mean. By 2035, the vast majority of the aftermarket will consist of the product categories we now know and sell. Profitability is here and we need to address this profitability market as well. On the other hand, there is another perspective we need to look at, contributions to growth. Because at aftermaket we are a slow growing industry, especially in the USA. From a growth perspective, electric vehicle components represent 2030 percent of this growth by 40. By 2035, this rate will increase even more. Therefore, if we want to increase the rhythm of the market, we say to our members: We cannot ignore this opportunity. We need innovation. We need to take advantage of these new technological opportunities. A few years ago there was panic in the aftermarket. We see that people are creating business plans, they are excited about the possibilities, entrepreneurship is increasing, and entrepreneurs are responding to these opportunities," he said.
Without a fleet there is no electrification!
Frank Schlehuber, Senior Market Consultant of the European Automotive Supply Manufacturers Association CLEPA, one of the important names of the conference, also stated in his speech that technology has changed the ownership model and said, “Electrification does not seem very possible without a fleet. On the other hand, there is the legal side of the issue. There is also carbon dioxide legislation. Legislation demands sustainability from us. Sustainability also affects technology, of course. In the same way, it affects the behavior of consumers and market actors," he said. Emphasizing that the fleet owners do not want to open up the management too much, Frank Schlehuber said: “They manage themselves. There is also a need for good investment for suppliers. Need help. If we, as suppliers, miss this opportunity, if we cannot put technology at the forefront here, I think we will have made a huge mistake. We will miss a great opportunity. The fleet wants us to be proficient in EVs as well. This is already the best for the future. Because the future will already be in electric vehicles. At the end of the day, independent aftermarket players need to be prepared for this area.”
The after-sales market has been laid on the table!
Among the speakers of the 13th Aftermarket Conference were Roland Berger Automotive Aftermarket Director Mathieu Bernard, Ford Otosan Supply Chain Leader Ahmet Aslanbaş and Sampa Automotive Intellectual, Industrial Rights and Project Manager, Patent Trademark Attorney Erdem Şahinkaya. In the afternoon part of the conference, a panel titled “Turkish After Sales Market with All Links of the Chain” was held. In the panel moderated by Silkar Endaş Automotive Board Member Emirhan Silahtaroğlu, SIO Automotive Board Member Kemal Görgünel, Bakırcı Automotive CEO Mehmet Karakoç, OM Automotive General Manager Okay Merih and Özçete Automotive Vice Chairman Ali Özçete made evaluations.