VEREIN FREIER ERSATZTEILEMARKT E.V. VEREIN FREIER ERSATZTEILEMARKT E.V. European Market Study Online...

VEREIN FREIER ERSATZTEILEMARKT E.V.European Market Study On l ine Trade : Update June 2018

W i e s b a d e n , J u n e 2 8 t h , 2 0 1 8

2

TOPICS

PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market

Copyright 2018 | 2HM & Associates GmbH

01 PROJECT SCOPE AND HISTORY

02

PROJECT SETUP03

MAIN INSIGHTS: ONLINE TRADE

3PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market


01_ PROJECT SCOPE AND HISTORY

2HMforum. | Company Profile

DRIVING GROWTH

› 2HM RESEARCH + CONSULTING is an internationally active research and consulting company and a pioneer in customer centricity consulting

Automobile Industry Partners(excerpts)

2HM GROUP

360°CUSTOMERCENTRICITY

LEADSSALESLOYALTY

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01_FIRMENPROFIL




› Since 2012, every three years, VREI conducts a comprehensive study regarding online trade in the automotive spare parts market in cooperation with 2HM

› So far, about half the manufacturers of car parts organized in the VREI Association participated in this study, in order to obtain a reliable basis for strategic decisions around e-commerce and digitalization and to be kept continuously up-to-date regarding the state of development of e-commerce

› The study has been repeated in 2018 in order to verify, update and validate the statements from the first two studies

Wide Media CoverageProject History

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01_FIRMENPROFIL



Additional Results…

… at online shop/platform level:

› Identification/verification of key players

› Analysis of the trends and developments

› Analysis of the flow of goods

› Determination of the pricing process/strategies

… at product level:› Determination of sales/turnover for part groups

› Identification of top product groups

› Identification of top brands and their shares

› Identification of online price level

Key objectives of the study:

› Determine the current online market volume of the passenger car/IAM aftermarket in Europe in 2018

› Examine the market growth and development analogous to the forecasts determined in 2012 and 2015, as well as to update the forecast until 2021


Project Scope

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01_FIRMENPROFIL




Market Valuation

Online Trade

eBay Motors Tracking

Secondary Analysis (GER)

Expert interviews

Telephone interviews: online shops

Secondary Analysis

Sales product groups

Global Industry Analysts / BCG

Company databases(e.g.Creditreform, Hoppenstedt, D&B)

Statistical offices

Additional secondary studies

Sales product groups

Sales Data: Shops

Telephone interviews: internal country experts

As in 2015, the following online-dealers are in

focus (among others):

Amazon Analysis

Top seller, brands and prices

Setup and Sources for Valuation The study focuses on the Top 5 automotive

markets in Europe, as well as Poland – a strongly

developing Eastern European market

http://www.autoteilemann.de/

http://www.billigstautos.com/wp-content/uploads/2010/11/rgb_slogan.jpg

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TOPICS




02

PROJECT SETUP03




Development online share/ total market

02_ MAIN INSIGHTS – ONLINE TRADE

Minimum level

Maximum level

5%

10%

12%

5%

12%

15%

0%

5%

10%

15%

20%

25%

'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 * estimated

CAGR: 13% 7%* 3-4%*

Online Share

What Was Seen in 2015?

In Germany, a gradual slowdown of the online growth was expected for the next three years

Main reasons for the expected growth slowdown:

› Achievement of use limits in the DIY and DIFM target groups

› Increased level of vehicle complexity

Growth Assumptions



7% 8%

5%7%

4%

11% 11%9% 9%

8%

2012 2015 2018* initial indications


Share of online sales volume – 2012 and 2018*

*Average value based on two scenariosSource: 2HM & Associates GmbH

Indications for 2018?

The expected slow down has not yet arrived.

Primary reasons for growth dynamics:

› The development of the B2B trade and the workshop handling foreign (purchased) parts are large levers

› Digitalization and automation encourages e-commerce trade

› The boundaries between online and offline trade are becoming blurred

*13-17%

*15-20%

*10-15% *12-15%

*9-12%

Status Quo



Online Product Types?› The actual online share

depends on the product class

› Highest online share can be assumed for easy products (+30% compared to overall average)

› Lowest online share is assumed by complex products (-50% compared to overall average)

Sales and online share of sold spare parts by product classification


Online Share

Source: 2HM & Associates GmbH

0%

5%

10%

15%

20%

Maximum level

Minimum level

Complex • Clutch kit• Dual mass

flywheel (DMF)• Turbocharger• …

Easy

• Work lights, work lamps

• Wipers• Oil• …

Regular

• Particle filter• Brake shoes• Brake discs• …

Status Quo



Top Types

› Brakes (brake discs, brake pads, brake calipers) and equipment (tow bar, roof bar, wipers) are generating the highest turnover (within the tracked product groups)

› Regarding sales volume, more fast-moving products (oils, spark plugs, filters) are listed as top

Online relevance of product groups


Rank Product groupSales

amount

1 Brake disc 2

2 Tow bar 1

3 Standard shock absorbers 2

4 Brake pad for disc brake 4

5 Roof bar 1

6 Muffler 1

7 Clutch kit 1

8 Interior air filter 1

9 5W-30 1ltr.

10 Headlamps 2

Sales (in €)Top 10 of the tracked 68 product groups

Sales (in units) Top 10 of the tracked 68 product groups

Rank Product groupSales

amount

1 5W-30 1ltr.

2 Brake disc 2

3 Windscreen wipers 2

4 Spark plug 1

5 Brake pad for disc brake 4

6 Standard shock absorbers 2

7 Oil filter 1

8 10W-40 1ltr.

9 Gas Spring 2

10 Wheel bearings 2

Sources:sales data, eBay Motors and online shops

Status Quo



Lurking or Playing?› B2C markets are often driven

via the “easy” product groups and DIY consumers

› Players such as eBay motors and Amazon are strong in this B2C space

› Amazon has grown significantly in the B2C space

› Experts assume at this juncture that Amazon is not yet significant in the B2B market

› Independent workshop views about Amazon are still open

German e-commerce automotive aftermarket estimates in €



20151.75 Billion €

Other68%

eBay26%

Amazon6%

eBay Motors and Amazon



67%

33%

0%

20%

40%

60%

80%

100%

Total


Establishment as key player (e.g. increase in market share/revenue)

“More people will get to know about Amazon in the automotive sector. eBay has been active in this sector for a longer amount of time that's why they are bigger at this point.”

“They are very strong in the online business and will use this position to increase their presence in the automotive market. They are thinking for the future.”

“They have got all the sales and logistics channels in place. Their business model allows them to grow much quicker then any independents on the market.”

No establishment as key player (e.g. spare parts sales not suitable for Amazon, not a reliable business partner)

“Unproblematic stuff that customers can install themselves could increase on Amazon, but more sophisticated parts are far too expensive and that will not change.”

“Amazon does not understand wearing parts and the business is too small to hire specialists. Beyond wipers, Amazon cannot develop much further.”

% answers

n=67

Perspectives on Amazon

Assessment of the future role of Amazon




% answers

Assessment of the future role of Amazon

Establishmentas key player

No establishment as key player

Amazon?Respectfully Unsure› Compared to 2015 where 50% of experts were not able

to estimate the future role of Amazon, only 19% of respondents in 2018 were uncertain.

› From those willing to estimate, approximately 2/3 expect that Amazon will fail in becoming established in the online spare parts market

› Strongest Player in B2C E-Commerce.

› Besides being a B2C Player, Amazon is occupying the B2B-market more and more

› “Amazon Automotive” has been selling spare car parts in the USA for many years

› “Amazon Vehicles” went live in the USA in 2016

› Amazon has entered the European Automotive Aftermarket. New job offers for Automotive Vendor Managers in Europe


Amazon

67%

33%

0%

20%

40%

60%

80%

100%

Total n=67



37%

44%

64%

63% 56% 36%

0%

20%

40%

60%

80%

100%

End users

Workshops

02_ MAIN INSIGHTS – ONLINE TRADE B2B sales will become the next battlefield

› Almost half of the revenue of online shops is coming from the commercial side

› Large wholesalers will benefit – the local and regional levels will suffer

› B2B has other requirements than B2C-platforms

OEM – Market: › Partslink24

IAM – Market: › Tyre24 (tires; but also spare parts and workshop equipment) › Alibaba (dominates the Chinese market - MS=80%)› Amazon Business (already launched in USA)› Openbay and RepairPal (USA), WhoCanFixMyCar (U.K.) –

potential parts aggregators, as well as selling partners

Sales volume


Business-2-Business

201820152012

Assessment of the future role of Amazon by the respondents



02_ MAIN INSIGHTS – ONLINE TRADEMergers, Acquisitions and Co-operations

› In 2017, LKQ acquired a number of automotive parts distributors:

› AD Polska (now Elit)› Stahlgruber› Optimal AG via Stahlgruber› Andrew Page and PR Reilly via Euro Car Parts› Rhiag-Inter Auto in 2015

› The Parts Alliance (PA) acquired:

› GSF Car Parts (2015 )

› SAS Autoparts (2016 )

› Waterloo Motor Trade (2016)

› BMS Superfactors (2017)

› BBC Superfactors (2017)

› PA was purchased by Uni-Select Inc.

› Groupe PSA plan to enter India, North America and ASEAN markets. They recently acquired:

› Mister Auto (2016)

› General Motors' Opel and Vauxhall brands (2017)

› Alliance Automotive Group was acquired by Genuine Parts.

› HELLA/ Nordic Forum purchased inter-team and Iparts in Poland in 2015 and 2016, respectively. HELLA also acquired FT from Denmark in 2015.

Shooting stars and unknown players

Established international players

Established national players

Trends and Developments

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02

PROJECT SETUP03




03_ PROJECT SETUP

eBay tracking

Consoli-dation

Module 2 | Expert interviews:a) Country experts

b) Operators of online shopsValidation and fine-tuning of collected data,

collection of background information

Market assessment

Module 1 | Analysis of secondary data:Analysis of existing

market data

Module 3 | eBay tracking/ Amazon analysis: Validation and fine-tuning of collected data,

collection of background information

Consolidation and reporting: Validation of the estimation model, updating of the information at shop level, market valuation

Expertinterviews

Secondary data

ModularSimilar to 2015, the concept is structured in a modular manner, whereby the modules do not build upon each other in a strictly hierarchical mode, but interlock regarding contents and the timeline, as well

Amazon analysis

Data Gathering

Data Analysis

Decision Basis

Three Modules



03_ PROJECT SETUP

Market coverage› 15 Product families

› 69 Product groups

eBay tracking:› Observation of 7 mill.

transactions

› 31 GB data volume

Market Distinction – Observed Products



03_ PROJECT SETUP

I. General information on online shops

II. Target groups of online shops

III. Flow of goods in the online market

IV. Prices in the online market

V. Trends and developments in the online market

DETAILDistribution Channels

Degree of Professionalism

Premium vs. Budget Brands

Parts Identification Systems

Development of Target Groups

Target Groups per Turnover

Purchase Reasons

Development of the Market Structure

Supply Sources

Development of supply sources

Returns: reasons/product categories

Sales & Online Share by Product Classification

Price Strategies

Price Differences

Price Development

Growth Prediction

Main Market Development Drivers

I.

II.

III.

IV.

V.

Study Topics – At a Glance



03_ PROJECT SETUP

✓ Up-to-date overview of trends and developments in the online trade of vehicle spare parts across markets

✓ Assessment of the online development (price and market significance) for your own product groups

✓ Sound basis for strategic decisions

✓ Identification of essential market players and assessment regarding their market significance

✓ The only study including market overview from the supplier‘s point of view

Study Advantages – At a Glance

Contact

2HMforum.

Für beste Beziehungen.

Dekan-Laist-Straße 17a

55129 Mainz

[email protected]

www.2hm.com

tel: +49 6131 32809-153

THANK YOU!



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VEREIN FREIER ERSATZTEILEMARKT E.V. VEREIN FREIER ERSATZTEILEMARKT E.V. European Market Study Online...

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