At the

Crossroads
The European Aftermarket in 2035

September 2024
By Albert Waas, Alexander Brenner, Robert Herzberg,
Malte Stulgies, and Olga Yuskevych
Contents

01 Introduction 15 Value Chain: Key Control Points

• New Challenges and Winning Strategies Determine the Aftermarket
Game
• Private Cars
03 Market Introduction:
• Fleets
The European Aftermarket
Has Two Main Channels
17 Strategic Implications:
Companies Must Seek Integrated
05 Impacts and Trends Shaping
and Digital Solutions
the European Automotive
Aftermarket
• Macroeconomics and Regulation 19 Conclusion
• Technology

• Customer Behavior
20 About the Authors
• Value Chain and Competition

12 The European Aftermarket Is

Large, Resilient, and Growing
Introduction

A
lthough the €64 billion1 European aftermarket auto Now, in 2024, BCG has updated its view based on recent
parts business is profitable and growing, market developments and short-term headwinds in the initial
trends and changes in vehicle architecture will trans- post-COVID 19 pandemic years.
form the industry significantly over the next decade. These
factors require competitors to start mapping strategies now
so they can maintain their market positions in the future.

In a wide-ranging 2021 study, BCG collaborated with the

European Association of Automotive Suppliers (CLEPA)
and automotive aftermarket consultancy Wolk After Sales
Experts to identify challenges the industry faces and ac-
tions that companies should consider. In over 30 interviews
with executives across the aftermarket spectrum, we dis-
cussed the trends that will shape this market in Europe
over the next ten years—and the necessary strategic re-
sponses. Over 600 interviews during workshops across
Europe were conducted to substantiate the analysis.

1. Includes Germany, UK, France, Belgium, the Netherlands, Italy, Spain, and Poland.

BOSTON CONSULTING GROUP 1

New Challenges and Winning Strategies To continue winning, companies must adjust to changing
and increasingly competitive market conditions driven by
Since 2022, a number of trends have threatened to slow the industry’s digitalization, vehicle electrification, and
growth and reduce profit margins. First, people are driving growing channel competition. Players across the spectrum
less—and the overall macroeconomic situation causes car must tap into the data stream created by the digitalization
owners to delay repairs and hold on to their vehicles longer, of automobiles and aftermarket processes. They will need
increasing the average car age. Vehicle architectures are to secure a role in increasingly integrated business allianc-
changing to electric drivetrains that require less mainte- es that will channel both customers and parts to repair
nance. Driver assistance technology will reduce collisions shops. And they must deal with new competition created
and thus the need for replacement parts. New players and by e-commerce players and other digital competitors.
digital sales tools will increase competition.
This report examines the European aftermarket overall
Although business has been bouncing back from the pan- and is structured along two key questions: Where to play?
demic and will grow both for companies in the indepen- and How to win? It outlines 15 trends that will shape the
dent aftermarket and for OEMs and authorized repairers, industry’s size and profit pools.
continued market transformation and increasing competi-
tion currently leave companies at a crossroads.

Businesses supplying the independent aftermarket sales

channel face the most risk as growing technological com-
plexity favors automakers. These businesses need to set
their strategic course now to come out on top in a rapidly
changing environment.

2 AT THE CROSSROADS: THE EUROPEAN AFTERMARKET IN 2035

Market Introduction
The European Aftermarket Has Two Main Channels

T
he European auto aftermarket can be categorized by The independent channel, or independent aftermarket (IAM),
two main channels, as shown in Exhibit 1: the autho- consists of companies that lack contractual ties to a single
rized channel and the independent channel. vehicle manufacturer and, hence, offer multi-brand
solutions. Automotive suppliers and parts manufacturers
The authorized channel is composed of vehicle manufacturers produce parts that are distributed through wholesalers.
(OEMs) and their affiliated authorized repairers (ARs). Wholesalers and distributors (WDs) often use buying
The OEMs and specific automotive suppliers contracted by groups (called International Trading Groups or ITGs) to
OEMs produce parts that are distributed through the OEM’s bundle volumes and obtain rebates from suppliers and
sales network and used for repairs and maintenance by ARs. parts manufacturers.

BOSTON CONSULTING GROUP 3

 Exhibit 1 - The European auto aftermarket primary players
Key control points influencing aftermarket decisions differ between private cars and fleet
Exemplary players

OEM/Tier 1 Wholesalers Repair Shops Customers

Intermediaries Intermediaries
Authorized
channel

Authorized repairers
Vehicle OEM sales and Customer groups
Single-brand repair shops Insurance companies
manufacturers distribution network
Multi-brand repair shops

Leasing companies Private

Independent wholesalers Independent repairers

Independent Automotive clubs

Buying Independent Businesses
(franchise and non)
Automotive groups wholesalers
Independent

suppliers Specialized garages

Routing portals
channel

Internal procurement Auto centers

Fast maintenance Fleets
Online distributors
Online retailers
Part manufacturers and shops

Integrated players

Source: BCG analysis.

Repair shops serviced by wholesalers can be divided into Aftermarket products sold through the authorized and
two groups based on product focus and scale, such as independent channels can be segmented into six
single repair shops versus chains. categories:

Intermediaries are an increasing presence in the • Wear and tear/maintenance (e.g., brake pads, spark
aftermarket, linking players along the value chain by plugs)
facilitating customer flows (either end customers or repair
shops). The customer group is composed of private • Body parts, glass, and lighting (e.g., bumpers, headlights)
customers, business customers, and professional fleets,
such as leasing companies. • Tires (tires only)

• Motors and drivetrains (e.g., axles, gearboxes)

• Electronics (e.g., starter batteries, ABS sensors)

• Accessories and consumables (e.g., in-car entertainment,

auxiliary heating)

4 AT THE CROSSROADS: THE EUROPEAN AFTERMARKET IN 2035

Impacts and Trends Shaping the
European Automotive Aftermarket

W
e see 5 major impacts as well as 15 key trends Data-driven pricing and inventory management. As a
shaping the European aftermarket size and com- result of rising parts complexity, complexity of integrated
petitive environment over the next several years. solutions, and market consolidation, aftermarket players
(See Exhibit 2.) The major impacts can be viewed on a increasingly focus on profit optimization. This is seen in
horizontal level, as they impact the industry holistically and increasing price levels and active cost management, both
include the following. building on available data.

GenAI-driven lifecycle management. The increasing Recycling and remanufacturing. Sustainability drives the
connectivity of cars and availability of customer data cre- overall mobility transformation and becomes increasingly
ates the opportunity to leverage generative AI (GenAI) and important for customers, with circularity of raw materials
advanced analytics to connect with the customers, such as being central. Moreover, the evolving regulatory landscape
through direct appointment scheduling and preventive around circularity has become a major factor for
maintenance. competitiveness in the aftermarket.

BOSTON CONSULTING GROUP 5

Fleet owners and management. The rise of private Macroeconomics and Regulation
leasing and new mobility offers will increase the share of
fleets in total car registrations. This results in a boost for Trend 1: Short-term delay of maintenance and repairs.
the aftermarket due to changed consumer behavior for Although the macroeconomic situation has relaxed slightly,
fleet cars, such as drivers taking less care of cars and high- it is still characterized by a unique combination of challeng-
er annual mileages. es. Consumer inflation and Producer Price Index (PPI) in
Europe are still significantly over pre-pandemic levels—as
Car electrification. The share of electric car models will are energy prices, with natural gas at ~3x the 2016 price.
increase significantly until 2035. Because the aftermarket Both global supply chain disruptions and local labor short-
costs of battery electric vehicles is lower compared to ages are ongoing potential problems. In addition, interest
internal combustion engine cars, this creates tension in rates remain high, with the three-month Euribor rate at 3.7%
the aftermarket and impacts the competitive environment. in June 2024.

On a vertical level, 15 trends will shape the aftermarket A number of underlying factors are contributing to the
size and competitive environment over the next several uneasy economic situation, including geopolitical risks with
years. These trends can be clustered in four dimensions: the war in Ukraine, repercussions from the COVID-19
pandemic, and increasing risks, both physical and transi-
• Macroeconomics and regulation tional, arising from climate change. Although these factors
carry short-term effects, we do see car owners cutting back
• Technology on spending in the aftermarket and delaying non-essential
repair and service work.
• Customer behavior

• Value chain and competition

Exhibit 2 - Trends that will shape the European auto aftermarket through 2035

Five major impacts stand out while 15 trends will Macroeconomics and regulation
· Short-term delay of maintenance and repairs
shape the future in general · Reduced growth and increased aging of car parc
· Sustainability trend drives mobility transformation
GenAI-driven lifecycle management · Evolving regulatory landscape
Growth of smart AI solutions to connect with the client
Technology
· Rising part complexity and integrated components drive up prices
Data-driven pricing and inventory management · EVs have differing parts and decreased maintenance
Growing profit orientation drives revenue and cost management · Rise of connectivity, in-car data, and analytics
· ADAS requires more sensors and reduces collision rate

Recycling and remanufacturing

Increasing importance of circularity of raw materials Customer behavior
· Slow decline in mileage driven
· Growing relevance of fleet players
Fleet owners and management · Increasing influence of insurers and intermediaries
Growing share of institutional aftermarket clients
Value chain and competition
· OEMs partner to get into EU market and push to segments 2 and 3
Car parc electrification · Increase of private labels and value lines
Shifts in applications and traditional profit pools · Consolidation pressures all market participants
· Rise of e-commerce and digital marketplaces

Source: BCG analysis.

6 AT THE CROSSROADS: THE EUROPEAN AFTERMARKET IN 2035

Trend 2: Reduced growth and increased aging of car Trend 3: Sustainability trend drives mobility transfor-
registrations. Historically, growth in car registrations has mation. Regulatory frameworks primarily focus on impos-
been one of the main drivers of aftermarket expansion. ing costs and prohibitions that drive changes. Key aspects
With increasing saturation of car ownership, especially in include requirements for circularity, especially concerning
Western economies, this factor will contribute less to after- batteries, the costs associated with CO₂ footprints, and a
market growth over the next ten years, with the number of heightened emphasis on upstream ESG accountability.
total cars climbing by around 0.5% per year until 2035. Concurrently, the behaviors of customers are evolving,
(See Exhibit 3.) leading to softer incentives for sustainability. This evolution
is evident in the rising demand for electric vehicles (EVs)
Over the last ten years, average car ages have increased as and other new-technology components and the emphasis
car lifetimes have risen and economic volatility has de- on sustainable operations.
layed buying decisions. This substantially affects repair
needs per car and market share in the two primary repair Aftermarket players are increasingly alert to these changes,
channels, with IAMs benefiting from an influx of older cars. as their approach to them will play a pivotal role in shaping
Specifically, the share of segment 3 cars (>8 years old) has the industry’s future trajectory. The approach taken varies
increased from ~50% in 2011 to ~60% in 2021. This trend is depending on the role of the players. Repair shops see
expected to continue, with segment 3 share reaching their areas of improvement in operations, including energy
around 65% in 2035. Central and Eastern European coun- and waste reduction. Wholesalers, which are critical to the
tries with lower disposable incomes record much higher smooth performance of the supply chain, are taking active
segment 3 shares and average car ages than Western roles in recycling and are increasingly collaborating with
European countries. Tier 1 suppliers to optimize sourcing. Tier 1 suppliers are
focusing on sustainable component manufacturing and
forming partnerships with aftermarket players to empha-
size circularity. And OEMs and ARs are in the position to
leverage data to ensure part longevity and focus on the
circularity of high-value components.

Exhibit 3 - Total car registrations are projected to slow through 2035

Car parc (PC & LCV), split by region (M units)
Historical 2011–2023 | Strong growth Forecast 2024–2035 | Slow growth
Segment 3 share (cars older than 8 years)
51% 53% 55% 57% 57% 57% 58% 58% 59% 59% 60% 60% 61% 60–70%
CAGR
0.5%
1.3% Historical Forecast
381 383 384 385 386 388 389 ‘11–‘23 ‘24–‘35
356 359 364 368 371 374 376 378
339 347 351 30 30 30 30 30 30 31 31 31 31 31 31
325 320 327 334 29 29 30
312 318 322 29
26 26 26 27 27 28 55 57 57 58 59 60 61 62 62 63 63 64 1.0% 0.5%
22 25 26 50 52 53 54
45 47 49
43 44 45 46 42 44

1.8% 1.1%
274 277 280 282 285 286 288 289 290 291 292 292 293 293 294
247 249 251 254 252 257 262 265 270 272

1.0% 0.3%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Western Europe Central Europe Eastern Europe

Sources: S&P Global Mobility; Market participant interviews; BCG analysis.

Note: Eastern Europe includes Belarus, Bosnia-Herzegovina, Bulgaria, Cyprus, Estonia, Greece, North Macedonia, Ukraine; Central Europe includes
Croatia, Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania, Serbia, Slovakia, Slovenia; Western Europe includes Austria, Belgium,
Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United
Kingdom. Forecast of segment 3 share indicative. PC = private cars, LCV = light commercial vehicles.

BOSTON CONSULTING GROUP 7

Trend 4: Evolving regulatory landscape. Regulation has Battery electric vehicles are expected to have an overall
become a major competitive factor in the aftermarket and reduced aftermarket cost of ~12% compared to internal
will increase in importance over the next ten years, both combustion engine (ICE) vehicles. This impact is distribut-
through indirect and direct effects. ed very unevenly across product categories, with reductions
primarily in maintenance cost due to the lower number of
Tightening requirements on material recycling and car engine components in a BEV. Maintenance cost for BEVs is
emissions, like the Critical Raw Materials Act and EURO7, expected to fall by ~50% due to some replacements be-
mainly affect OEMs directly but will lead to changes in the coming obsolete, such as spark plugs, while others are
aftermarket with regard to parts sourcing and repair prices. required less often. This puts pressure on the aftermarket
and impacts competitive dynamics.
The landmark direct aftermarket regulation within the
European Union is the Motor Vehicle Block Exemption Due to the more complex nature of EV servicing and the
Regulation (MVBER), established in 2010. This legislation currently limited ability of many IAM players to service
balances aftermarket stakeholders by granting exclusive these vehicles, we see a short-term advantage for ARs,
sales channels to OEMs (ability to contractually mandate which will deteriorate once the independent aftermarket
car dealers to be single-brand) but forbidding them from invests in training and technology and gains customer
forcing customers to use authorized repairers (for example, trust in this new category.
by threatening loss of warranty). Additionally, OEMs are
obliged to provide sufficient know-how for the IAM to man- Furthermore, with the increasing value of replacement
age repairs (for example, technical documentation). In bundles, changes to supply chain dynamics are possible,
2023, the MVBER was extended until May 31, 2028. Nota- increasing focus on regional distribution centers and re-
bly, while the primary content of the MVBER remained duced stock at individual repair shops.
unchanged, the supplementary guidelines were updated to
reflect the automotive sector’s technological and digital Trend 7: Rise of connectivity, in-car data, and analytics.
transformations, including the emphasis on the obligation Connectivity features will become standard for new cars,
for OEMs to share vehicle-generated data with indepen- leading to substantial adoption of at least basic connectivity
dent operators non-discriminatorily. in more than 80% of cars on the road by 2035. As more
advanced connectivity (including direct data streaming and
processing as well as communication with outside parties)
Technology becomes commonplace, the available amount and breadth
of data will drastically increase and enable opportunities for
Trend 5: Rising part complexity and integrated solu- insights from artificial intelligence and advanced analytics.
tions drive up prices. The technological evolution of These include remote diagnostics and preventive mainte-
existing parts paired with the innovation of new parts, such nance, as well as performance monitoring on an individual
as sensors, will continue to drive up the price levels of part level, to name a few. OEMs are in the driver’s seat to
spare parts. Furthermore, systems and parts are becoming benefit from these trends with direct data access, enabling
increasingly interconnected, requiring additional interfaces them to streamline processes and providing the chance to
and amplifying the complexity of repair shop services, win customers from the independent channel.
which is pushing labor costs higher. Even given increased
commoditization of products such as basic electronics, the The increasing amount of car-related data will also lead to
historic trend of annual price increases between 1% and greater importance of data pooling companies acting as
3% across product categories is expected to continue. intermediaries for both OEMs/ARs and the IAM and en-
Some products are undergoing price-resetting innovations. couraging collaboration to share and swap data. OEMS and
For example, LED lighting is far outpacing these percentag- authorized players will have prime access to data from
es, with yearly increases of up to 10%. younger vehicles, while the independent players can pro-
vide data points for the older part of the fleet.
Trend 6: EVs have differing parts and fewer mainte-
nance needs. While electric car models have become
much more widespread, their share of car registrations is
currently still very low (~1%). However, the penetration of
electric vehicles will pick up after 2025, reaching around
15% share of registrations for battery vehicles (BEVs) in
2030 and 30% in 2035. There will be strong differences in
EV penetration across geographies, with a clear correlation
between GDP per capita and EV adoption.

8 AT THE CROSSROADS: THE EUROPEAN AFTERMARKET IN 2035

Trend 8: ADAS require more sensors and reduce By establishing an expansive repair network and streamlin-
collision rates. While a world dominated by driverless ing the claims process, insurers can reap cost and quality
cars is still a long way off, Advanced Driver Assistance advantages in claims management. Potential cost savings
Systems (ADAS) will already have a measurable impact on of up to 25% on routed claims are possible. This, of course,
our lives over the next ten years. Level 0–2 ADAS systems is appealing to customers as well. Repair shops in the
will be included in the majority of new cars sold in 2030, insurer’s network enjoy an influx of new customers via
leading to a substantial penetration of around 50% of total their insurance partner and have the chance to gain their
car registrations. The impact of level 2–5 systems will be loyalty even outside of insurance-related repairs.
limited, reaching only around 25% of vehicles on the road
in 2035. Still, these systems are expected to reduce colli-
sion rates by ~20% from 2022 levels by 2035. Value Chain and Competition

This disproportionally affects demand for crash parts, such Trend 12: OEMs partner to get into EU market and
as body parts, glass, and lighting, and has less of an impact push into segments 2 and 3. With increased competition
on typical maintenance parts, such as brake pads, that in new car sales and the need to invest heavily in their
only rarely need to be replaced because of a car crash. operations to meet emission, electrification, and autono-
mous driving goals, OEMs are seeking ways to increase
aftermarket revenues and, importantly, profit margins.
Customer Behavior While OEM-authorized retailers capture a very high share
of segment 1 vehicles (car age ≤4 years), automakers could
Trend 9: Slow decline in mileage driven. Historically, also try to increase revenues by improving customer loyalty
mileage driven in Europe has decreased at a steady pace of and penetrating segments 2 and 3 (car age 4–12 years).
~0.6% since 2000, with a notable dip during 2020 due to
pandemic effects. This trajectory is expected to continue There are three key ways for OEMs to increase revenues: 1)
with a further rise in e-commerce and online services, an Increase loyalty with rising vehicle complexity (for example,
uptick in work-from-home engagements, and alternative ADAS, electrification); 2) Take active steps to improve
mobility solutions, such as micromobility (for example, customer loyalty (for example, with remote diagnostics,
scooters). The increasing acceptance of work-from-home investment in existing customer relationships); and 3)
models and dependence on online shopping are projected Build IAM business. While the first path is driven by the
to fuel this trend further, while the slow improvement in evolution of technology, fulfilling the promise of the other
public transport connections and reliability prevents many paths requires much more initiative.
car owners from switching their commutes.
Luxury and volume OEMs seem to differ in their approaches
Trend 10: Growing relevance of fleet players. Fleets to these potential growth strategies. Luxury OEMs
will control an increasing share of car registrations, using traditionally are less price-sensitive and have more loyal
the vehicles for private leasing programs and new mobility customers and, hence, do not need to tout their abilities
offers such as car sharing. This will influence the aftermar- with high-end vehicles but instead could benefit from
ket in several ways. Drivers taking less care of cars they providing newer types of services. By contrast, volume
don’t own and fleet vehicles having higher annual mileages OEMs would be more likely to consider expanding their
will boost the aftermarket, as will the lower average vehicle repair operations into an all-makes IAM business.
age in fleets.
This push into additional segments is especially relevant
Fleets will also take more charge of steering customers to for emerging EV OEMs trying to establish a presence in the
“preferred” repair shops with which they have existing European market by building a partnership ecosystem far
framework agreements. Currently, a fair share of such beyond the aftersales market, including financial services,
fleets chooses authorized retailers for their ability to pro- BEV charging, online sales, and more.
vide a well-executed system and service integration, but
their interest in finding cost-efficient solutions naturally One OEM that is making use of all of these growth strate-
favors the IAM channel and presents opportunities specifi- gies is Tesla, which manages to be highly trusted by its
cally for larger, professionalized IAM repair shops, which customers by acting as a single point of contact and dis-
can provide integrated processes and sufficient supra-re- tributing maintenance work internally or to third parties
gional coverage. only after receiving the vehicle from the customer. With its
digital automated system for creating repair tickets, diag-
Trend 11: Increasing influence of insurers and inter- nosing remotely, scheduling appointments, and ordering
mediaries. Insurers are taking proactive steps to forge parts, Tesla experiences service demand far surpassing its
partnerships with repair shops, unlocking mutual benefits capacity, in which case it actively encourages third-party
for both sides. repairers to start servicing the vehicles.

BOSTON CONSULTING GROUP 9

Trend 13: Increase of private labels and value lines. Trend 15: Rise of e-commerce and digital marketplaces.
Private label (PL) parts penetration has increased over the Over the last ten years, digital players such as Autodoc,
last few years and is projected to continue on the same kfzteile24, and WhoCanFixMyCar have created a sizable
trajectory. Driven by professionalizing and growing whole- presence in the aftermarket. We project that digital-based
salers who want to capture a larger share of value pools, competitors will continue to grow and increasingly chal-
private label parts and components are becoming more lenge incumbents. We see these businesses coming out of
and more common. They are expected to reach a share of two distinct groups: e-commerce players (understood as
20% to 30% by 2025, forcing Tier 1 suppliers to formulate true e-tail platforms here) and service aggregators.
dedicated strategic responses.
E-commerce players, currently at 5% to 10% market share,
There are large differences in private label share across will grow strongly and reach 15% to 20% market share by
products. Safety-relevant crash parts and products with 2030. Such players usually do not exclusively source parts
high brand visibility, such as tires, have a low private label from wholesalers, but instead strike direct procurement
share, while common maintenance parts or accessories agreements with suppliers, which further increases the
already have a PL share of up to 50%. threat to wholesalers. Moreover, even B2C-oriented e-com-
merce players have a substantial share of repair shop
In part as a response to increased private label business, customers ordering parts under private accounts. Both
we see a polarization of price points in the market. This is these factors make e-commerce a relevant opportunity as
partially driven by suppliers offering specific lower-price well as a threat for wholesalers.
value-line products to attract a more price-sensitive cus-
tomer segment. The rise of service aggregators has been one of the most
impactful changes in the aftermarket over the last few
Trend 14: Consolidation pressures all market years. These companies are responsible for 10% to 15% of
participants. Over the last ten years, consolidation has aftermarket services. That market share is projected to
been one of the main drivers of change in the competitive increase to 15% to 20% by 2025 and to 20% to 35% by
environment of the aftermarket. This has been most 2030. Service aggregators are comprised of two main busi-
relevant for wholesalers, with players such as LKQ ness models: 1) Platforms aggregating wholesale offers for
completing more than 200 acquisitions. In addition, repair shops (for example, Auteon) and thus driving up
horizontal and vertical integration of wholesalers has (price) competition among wholesalers, and 2) Platforms
created a strong set of vertically integrated players with a routing end customers to repair shops (for example, Who-
larger share in the independent aftermarket space. CanFixMyCar). The latter business model is relevant to
players along the aftermarket value chain, given its impact
Further consolidation and increased focus on harmonization on customer flows. Routing platforms require a large cus-
of acquired businesses across geographies are expected. tomer base and a sufficient number of repair shops listed
Large players benefiting from synergies gained through to properly function. To unfold their full potential, such
consolidation will increase pressure on competitors to build platforms need to build up diagnostics capabilities (recog-
sufficient scale to compete. Large wholesalers are no longer nizing repair/parts needed during scheduling of appoint-
dependent on their buying groups to connect to suppliers or ments) and IT integration. Partnerships, such as with
negotiate rebates. Consequently, a small group of consolida- wholesalers, seem to be a logical pathway to acquire these
tion winners have become increasingly influential. capabilities.

Consolidation is also expected to affect repair shops to an

increasing degree. Authorized repairers have already un-
dergone a consolidation wave over the last ten years, and
independent repair shops are expected to follow suit.
Demanding commercial customers and the importance of
investing in tech and training for new types of repairs—
such as for EVs—increase the scale needed to effectively
compete in the market, specifically in urban centers.

10 AT THE CROSSROADS: THE EUROPEAN AFTERMARKET IN 2035

Macroeconomics, regulation,
technology, customer behavior,
and value chain competition all
drive trends that will shape the
aftermarket.
The European Aftermarket Is Large,
Resilient, and Growing

T
he European2 automotive aftermarket has annual However, through 2026 we anticipate that aftermarket
revenues of €64 billion and has enjoyed steady ~2% growth will be relatively similar to recent years, with both
annual growth since 2011. (See Exhibit 4.) The indepen- IAM and AR enjoying healthy ~3% per year gains and the
dent aftermarket has slightly increased its share of the overall market share distribution between AR and IAM remaining
market to ~60% in 2022, driven by rising car ages, profession- relatively stable. While the authorized channel will benefit
alization of IAM players, and an increased customer focus on from new and complex technologies, the IAM can hold its
procuring cost-effective solutions. The market share split ground through internal professionalization and benefit
between IAMs and authorized retailers varies greatly from from rising car ages, partly due to COVID, which reduced
country to country, with IAMs performing better in Eastern commuting mileage, extending the life of personal vehicles.
Europe, where available income is much lower. In addition, inflated automobile prices as supply chains
eroded in the post-pandemic period have led consumers to
COVID-19 has had a limited impact in the aftermarket, inhib- hold on to their cars longer.
iting growth around 2022, but in 2023 the market recovered
as the pandemic receded. Driven by an enhanced customer
focus on cost-effective solutions, in the short-term IAMs may
benefit to a slight degree from increased budget awareness.

2. Includes Germany, UK, France, Belgium, the Netherlands, Italy, Spain, and Poland.

12 AT THE CROSSROADS: THE EUROPEAN AFTERMARKET IN 2035

Exhibit 4 - European auto aftermarket growth is projected to slow after 2025
European component aftermarket PC & LCV (in B€)
0.5% CAGR CAGR
’11–’26 ’26–’35
4.2%
74 75
72

58 27 29 32 2.6% 1.4%
52 (38%) (39%) (42%)
47 23
21 (39%)
19 (40%)
(41%)
45 45 44
36 (62%) 61%) (58%) 3.1% –0.2%
28 31
61%)
(59%) (60%)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Historical development Reduced growth from EVs

Sources: S&P Global Mobility; BCG market model, BCG analysis.

Note: Market excluding trucks over 6 tons; numbers refer to wholesale level without labor. Countries include Germany, UK, France, Belgium,
Netherlands, Italy, Spain, and Poland. PC = private cars, LCV = light commercial vehicles, AR = authorized repairers, IAM = independent aftermarket.

After 2026, we expect that market dynamics will shift more Some factors, such as parts prices or the product mix, are
notably due to an increased penetration of ADAS and EVs similar across geographies, while trends, such as electrifica-
as well as a heightened importance of software repairs. tion or wages, are very much country-specific. In Norway,
The aftermarket will continue to grow, but at a slower pace for instance, the EV impact is almost triple that of Europe
of <1% per year. With reduced overall market growth, we as a whole. Similarly, market development for the different
expect fiercer channel competition. OEMs will be in a product categories varies: electronic components are ex-
commanding position to increase market share because pected to grow strongly at ~5% per year, mostly due to the
they will have an abundance of levers to pull—ranging need for sensors and other connectivity parts built into
from taking advantage of technological progression to cars, while electrification and ADAS will minimize demand
putting an enhanced focus on the existing customer rela- for many other components, which will only grow moder-
tionship and data. This should allow the authorized chan- ately or stagnate.
nel to increase its share to ~42% of the market and result
in a stagnating IAM growth projected from 2026–2035, with
a turning point around 2030.

As shown in Exhibit 5, a multitude of factors will affect

aftermarket growth. Increasing car registrations as well as
higher prices for parts, which generally rise faster than
inflation due to greater complexity, will buoy market size,
while the growing presence of EVs with their lower mainte-
nance needs will put pressure on aftermarket growth. In
addition, ADAS will reduce aftermarket growth (especially
from 2025 on) as autonomous driving should lower the
number of vehicle crashes. But the increasing need for
sensors and electronics will contribute to sales gains. Aver-
age annual mileage driven is decreasing at a slow pace,
which leads to fewer crashes and less wear and tear on
parts; all of this will, also, drive down overall market volume.

BOSTON CONSULTING GROUP 13

Exhibit 5 - Driving factors behind total components aftermarket growth
from 2022 to 2023 are inflation and car registrations
Total aftermarket on wholesale level without labor (2022 level indexed to 100)
5.2%

16.0% –3.0% 1.4% 116.4%

0.4%

–3.4% –0.2%

100.0%

2022 Inflation Car EV ADAS ADAS Product Price 2035

registration crash electronics effects effects
reduction

Car registration EV ADAS Product and price effects

Number of car registrations EV share of 1% in 2022 and Increase in ADAS reduces Volume decrease of 0.5%
grows slightly, leading to 30% in 2035 leads to >50% spend for body parts by annually across all products
basic volume growth reduction in repair and –2.5% annually across all due to increase in reliability
maintenance spend cars due to fewer collisions
Car registration ages Product-specific volume
positively, impacting IAM EVs with 20% higher demand ADAS supports +3% annual developments (e.g., lighting
share but reducing total for tires works against decline growth of sensors and other decrease from LED)
volume in repair and maintenance electrics
Annual 0.5% increases in
Mileage slightly decreases overall product price and
product-specific prices
(e.g., sensors)

14 AT THE CROSSROADS: THE EUROPEAN AFTERMARKET IN 2035

Value Chain
Key Control Points Determine the Aftermarket Game

T
o derive holistic recommendations for strategic Private Cars
actions, we not only examined the market trends
covered in this report but also analyzed the aftermar- End customer choosing repair shop.
ket value chain. Diving deeper into the process that a End customers are increasingly influenced by digital steer-
customer—either a private driver or a fleet manager—goes ing through routing platforms as well as remote diagnos-
through when selecting a repair shop, we identified the tics in their choice of repair shops. OEMs are best posi-
critical control points that most determine aftermarket tioned to use these levers to increase their market share
choices. (See Exhibit 6.) through direct data access, an existing customer relation-
ship, and the ability to provide integrated solutions.
In their totality, these control points direct customer flows
for all aftermarket players. Therefore, the ability of these Repair shop choosing parts, wholesalers, and
companies to use key levers for each control point is an distributors.
essential determinant of their success over the next years. A repair shop’s choice of wholesaler is not only affected by
Given the technological changes and digitization across their product offer and price level but also by the addition-
the value chain, companies must adapt their approach to al services they provide, such as training, and their integra-
addressing these control points. tion into the IT landscape of increasingly digitized garages.
Wholesalers have gained a stronghold on this control
point, building up a portfolio of services tailored to repair
shops’ needs.

BOSTON CONSULTING GROUP 15

Exhibit 6 - Key control points that most influence repair decisions of private
car owners and fleets

Repair shops choosing parts, wholesalers,

End customer repair shop selection Wholesaler choosing suppliers
and distributors

· Price and availability (lead time and reliability) · Product access, price, and contracts · Price and service level of supplier
· Technical capabilities (EV) · E-commerce and platform cooperation · Captive parts and innovation
Private cars · IT integration (booking system, invoicing) · Technical training and services (esp. new tech) · Pull from workshops/end customers

Repair and maintenance and (Remote) diagnosis Repair process and Fleet reintegration and
service agreements and repair proposal parts logistics quality review

· Price and availability (lead · Remote diagnostics · Cost vs. efficiency tradeoff · Transfer service to fleet based on
time and reliability) · Repair vs. scrapping decision · Coverage of repair shop network contractual agreement
· Technical capabilities (EV) · Capacity/availability (opportunity · Replacement mobility based in · IT integration including status of
· IT integration (booking system, cost of downtime) contractual agreement repair for quick reintegration
Fleets invoicing)

Criticality of
decision criteria

Sources: Expert interviews; BCG analysis.

Wholesaler choosing suppliers. Repair process and parts logistics.

Suppliers need to carefully manage relationships with The efficiency of repair processes is crucial for fleet cus-
increasingly large and powerful wholesalers. Differentiating tomers due to the emphasis on minimizing vehicle down-
through captive parts and innovation and additional ser- time. Repair shops need to ensure they have streamlined
vices such as category management is essential to imple- operations, with real-time parts availability and fast logis-
ment premium brand pricing. Combined with a pull from tics to cater to the needs of fleet operations. Integrating
repair shops or end customers triggered by strengthened with parts suppliers that offer rapid delivery and ensuring
branding, this can help protect a premium price point from the availability of commonly required parts can significant-
the influx of private labels used in the aftermarket. ly reduce repair times.

Fleet reintegration and quality review.

Fleets Once repairs are completed, the swift reintegration of
vehicles into the fleet is essential. Quality assurance pro-
R&M and service agreements including repair cesses should be in place to ensure that repairs meet the
shop selection. required standards, minimizing the risk of recurrent issues.
A rising number of customers are fleets and insurance Aftermarket players should also seek feedback from fleet
firms that have framework agreements with aftermarket managers post-repair to continuously improve their ser-
players and thus mandate their customers to visit prede- vices. A digital platform or portal where fleet managers can
termined repair shops. This requires players to seek com- track repair progress, receive updates, and provide feed-
mercial cooperation and provides a potential opportunity back can be a valuable tool in building trust and ensuring
for the independent aftermarket to leverage its cost-effec- high service quality.
tive solutions.

(Remote) diagnosis and repair proposal.

With the advancement in telematics and connected vehi-
cle technology, fleet managers are now able to remotely
diagnose vehicle issues before they become critical. This
not only reduces vehicle downtime but also helps in pre-
ventive maintenance. Aftermarket players need to invest in
such technologies, as offering a comprehensive diagnosis
and a tailored repair proposal can lead to more efficient
repair processes, saving both time and money for fleet
operators.

16 AT THE CROSSROADS: THE EUROPEAN AFTERMARKET IN 2035

Strategic Implications
Companies Must Seek Integrated and Digital Solutions

T
o identify the most pivotal strategic action fields for Repair shops must improve internal efficiency and plan-
each type of aftermarket player, we combined the ning through digitization, such as by advancing their dealer
observations from our market examination with our management systems. They also must prepare both their
value chain analysis findings. This section provides an employees and equipment for new repairs, including those
overview of strategic actions for each type of player. (See related to electrification. With increasing digital steering of
Exhibit 7.) customers, it is mandatory for repair shops to connect with
them digitally—either through partnerships or a propri-
As customers and companies within the aftermarket be- etary system/outreach. The rising number of customers
come more connected, it is essential for players to be controlled by fleets and insurers requires repair shops to
informed not only about their own action fields but also integrate such players’ processes flawlessly into their own
those of companies up and down the value stream. With IT landscape.
vertical integration ongoing and integrated solutions in
high demand, awareness and willingness to pursue solu-
tions in partnerships become more and more important.

BOSTON CONSULTING GROUP 17

Intermediaries need to work on two strategic directives— Tier 1s should shift to directly supplying repair shops and
building up scale and achieving integration via partner- e-commerce players to strengthen their influence at the
ships. Platform models are fundamentally built on suffi- repair shop control point. Furthermore, they are positioned
cient size and seamless integration into IT landscapes. well to increase their relevance with OEMs by gaining a
Furthermore, intermediaries need to evaluate the implica- role in software and data technologies. This is especially
tions of changing repair types on their business, as such important with respect to the growing number of EV com-
complexity increases the difficulty of accurately identifying ponents, which often involve substantial increases in tech-
parts needed and matching customers to properly nical complexity.
equipped repair shops.
OEMs/ARs are in the strongest position to gain an additional
Wholesalers are well-positioned to be a central facilitator share of business, given market trends. Nonetheless, they
and partner within the aftermarket space. To leverage this have to actively take advantage of their existing customer
position, they need to find ways of steering end customers relationships as well as new, complex repairs to penetrate
either through commercial cooperation, such as by offering segments 2 and 3. By strengthening customer loyalty
additional services like call centers to fleets, or through through targeted measures, such as subscription-based
investments/partnerships with routing platforms. Because services, and proactively developing business models along-
e-commerce players also service repair shops and source side new technologies, such as ADAS and EVs, the autho-
parts directly from suppliers, it is pivotal for wholesalers to rized channel can be viewed as a trusted technical expert.
create a digital platform concept. For volume OEMs, an investment in an IAM business could
be a more aggressive pathway to increase revenue and profit
contribution of their aftermarket business.

Exhibit 7 - Strategies that aftermarket players must adopt to navigate

shifting industry landscape
Review customer Scale up to compete in the Improve internal IT Capture active role in Prepare
Repair shops relationship and future processes and planning digital processes with employees/equipment for
marketing initiatives selected partners new, complex repairs

Invest in scale-up with Develop holistic platform Find partnerships to Seek partners for (remote) Evaluate implications of
Intermediaries customer initiatives concept improve experienceand diagnostics solution changing repairs
customer stream

Strike strategic Focus on EVs early and Create digital platform Actively drive Become trusted partner
Wholesalers partnerships to steer end position along EV value concept, including. consolidation and lift for new tech and enable
customer chain e-commerce synergies repair shops

Strengthen repair shop Evaluate direct supply to Position in growing xEV React to PL growth and Gain role for OEM in
Tier 1s (and end customer) control repair shops/e-commerce components market counter WD purchasing software/data
point players power technologies

Strengthen customer Proactively develop Assess remote diagnostics Review internal Evaluate investment case
OEMs/ARs relationship/loyalty in business models along EV offering for IAM structure/strategy for for IAM
segments 2 and 3 and software aftermarket

Source: BCG analysis.

Note: AR = authorized repairers, xEV = all types of electric vehicles, WD = wholesalers and distributors, IAM = independent aftermarket, PL = private label.

18 AT THE CROSSROADS: THE EUROPEAN AFTERMARKET IN 2035

Conclusion

W
e believe that the aftermarket will continue to In 2035, we envision a much more efficient aftermarket
grow over the next ten years and provide opportu- enabled through digitalization and integration along the
nities for new business models, such as suppliers value chain. Customers increasingly will be steered digital-
directly servicing e-commerce players and repair shops. ly by fleets and insurers, and digitally-enabled advance-
Nonetheless, a slowdown after 2026 is expected—and ments such as remote diagnostics and ADAS-reduced
shifting market dynamics driven by consolidation, new collisions will decrease the overall amount of per-vehicle
players digitalizing the aftermarket, and technological aftermarket work. Repair shops will need to master new
development mean that companies must act now to se- types of repairs and digitalize their operations. Profession-
cure their continued share in this large and attractive alized and consolidated wholesalers will experience pres-
market. sure to reduce logistics cost and use advanced analytics for
improved efficiency. Suppliers will face increasing challeng-
es from customers with higher buying power and will have
fewer direct access points to repair shops—but will also
have new opportunities, such as direct supply to market
participants like e-commerce players.

BOSTON CONSULTING GROUP 19

About the Authors

Albert Waas is a managing director and partner at Alexander Brenner is a managing director and partner
BCG’s Munich office. You may contact him by email at at BCG’s Hamburg office. You may contact him by email at
[email protected]. [email protected].

Robert Herzberg is a partner at BCG’s Hamburg office. Malte Stulgies is a consultant in BCG’s Frankfurt office.
You may contact him by email at [email protected]. You may contact him by email at [email protected].

Olga Yuskevych is a senior knowledge analyst in

BCG’s Chicago office. You may contact her by email at
[email protected].

For Further Contact

If you would like to discuss this report, please contact the

authors.

20 AT THE CROSSROADS: THE EUROPEAN AFTERMARKET IN 2035

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22 AT THE CROSSROADS: THE EUROPEAN AFTERMARKET IN 2035