IPSOS BC – INDONESIA’S GROWING AFTERMARKET LANDSCAPE

With over 11 million passenger vehicles to be out of warranty by 2020 and the used car market gradually becoming more structured, Indonesia’s growing aftermarket landscape provides significant opportunities for parts players both local and foreign. Parts players in Indonesia continue to rely on parts retail shops to ensure wide distribution coverage and consumers heavily relying on workshop mechanics and the widespread independent workshops. Despite the underdeveloped aftermarket landscape, the significant growth in passenger vehicles is expected to push for a more structured aftermarket landscape. Ipsos Business Consulting, a fact-based strategic consulting firm, noted in its latest publication that foreign and new parts players seeking to capture this significant growth should focus on four significant factors:

-          Identifying relevant local partners with established networks to become distributors

-          Capitalize on the growing modern channels such as the branded workshop channel for direct selling

-          Localize and redefine product offerings, price positioning and brand and communications with end channels and users.

-          Targeting promotional strategies to the highly influential workshop mechanics. 

 

The automotive aftermarket parts sector, which refers to the auto-parts replacement post vehicle purchase, have huge growth potential with over 11 million passenger vehicles in Indonesia due to the expected out-of-warranty vehicles by 2020. Ipsos Business Consulting, a fact-based strategic consulting firm, has forecasted in its latest study that the out-of-warranty vehicle population will grow by 9.7% per annum from 2015 to 2020. Ipsos further noted “Parts players will continue to rely on parts retail shops to ensure wide distribution coverage to end-users. Parts players face key challenges in identifying and controlling qualified distributors that have wide access to traditional channels such as parts retail shops and independent workshops.” Indonesia’s under-developed aftermarket landscape provides significant opportunities for both local and foreign parts players to capture its growth. 

 

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