The Current Market Situation of Automotive Parts and Accessories
By definition, “the automotive industry is a wide range of companies and organizations involved in the design, development, manufacturing, marketing, and selling of motor vehicles, some of them are called automakers. It is one of the world’s most important economic sectors by revenue” (Pinkse, Bohnsack & Kolk, 2014).
Overall, the material opposition in the market of the automotive industry has been conventionally rigorous. For many years, steel has been the prominent material, especially in the 1920s. However, what type of automotive materials is most likely to dominate in the twenty-first century? The manufacturers’ decision on the usage of material in the automotive industry is generally complex and is determined by a number of factors. The cumulative requirement in order to improve fuel economy is backed by concerns of global warming, and the usage of energy has a major impact on the choice of materials. The automotive industry at present and also in the past has been intensive and complicated, which is why competition has been tough.
One research study says that the U.S. government has made regulations in order to enhance fuel economy and ensure occupant safety by putting out a mandate to decrease the amount of emissions in vehicle exhaust.
In order to achieve such efforts, the automotive industry is making heavy contributions in boosting the conventional efficiency of the engine so it can develop the newly functioning power trains, such as the most major ones, that “reduce vehicle weights and full engine electrical system or electric motor.” The power of an electric engine or an electric motor is that the company can receive subsidiaries from the government just for being environmentally aware. Electric cars are a new concept in the automotive industry; they have more batteries than a usual gasoline engine, which makes it a better technology and a consumer’s preferred investment (Nian, Peng & Zhang, 2014).
Companies in the automotive industry manufacture and produce motor vehicle parts and accessories that are other than “engines, engines parts, batteries, tires, bodies and chassis.” Moreover, the assembling of motor vehicles is not included as a part of this industry. Basically, the manufacturers generally supply and produce accessories and parts to the original equipment manufacturers (OEM) for the usage of manufacturing a proper, complete means of transportation or motor vehicle, or for the replacement parts in dealerships of the OEM. They also source parts to the aftermarket.
Some of the ongoing, continuously manufactured products are electrical and electronic components, suspension and steering, brake systems, exhaust systems, HVAC parts, auto-body wheels and parts, radiators, filters, transmission and other components. Some of the current needs of the automotive industry are motor vehicle electric and electronic components, steering and suspension part of motor vehicles, brake system of motor vehicles, transmission and power train part of motor vehicles, seating and interior trim part of motor vehicles, and metal stamping of motor vehicle parts. These are some of the globally manufactured products and accessories that the automotive industry offers, and some of the activities that it performs. In terms of expected benefits and cooperation costs, the authors of different researches have objected the notion of “calculative trust,” which is its assessment. The authors further stated that the trust comes from the monitoring of manufacture and production of automotive parts and accessories; however, this is currently lacking at the moment. Also, the governance structure and hierarchy of the companies in this industry has been in a downslide; this was suggested by a study that carried out a survey of Japanese and American-based automotive companies on their organizational practices and norms. For example, in Japan the suppliers in this industry immensely trusted their customers and had more customer commitments than the other countries. They had a simple relationship of trust that led to customers depending on the manufacturers and suppliers for technical assistance over a very long period of time. This occurred in Japanese manufacturers more than the U.S.-based manufacturers and suppliers, thus the trustworthy behavior of the Japanese automotive industry makes it highly successful as compared to other countries in terms of spreading value and satisfying a large number of customers. Many attempts have been made by U.S. companies to mimic and imitate the Japanese automotive industry, their business norms, and their customer-supplier relations. Thus, as per as the current trends, the Japanese automotive industry and its suppliers certainly have more loyal customers than U.S. companies as they entertain a larger level of trust towards their clientele.
Current Sales of Automotive Parts through Online Businesses
In terms of maintaining current sales, the automotive parts and accessories industry earned quite a large profit and number of sales online via B2C sales. By 2020, it is expected that the automotive industry alone in North America and Europe will make around $20 billion. It is forecasted that the market of Western countries will drive the volume of transactions up. Emerging markets in the global automotive industry will also display a great amount of development, progress and growth through online parts purchasing. For example, some of the localized online retailers that sell auto parts and accessories like “the U.S. Auto Parts Network (U.S.) and Oscaro (France) came into the market from nowhere, slowly carving out a niche.”
Moreover, the contribution of companies like Amazon has battered the sales of such retailers. Although Amazon is in no way a proper and conventional automotive online retailer company, it has nonetheless played its part. Car manufacturing and selling companies like BMW have already started online retailing across a number of digital marketplaces such as TMall and eBay, and some other online shops as well. The major point of this discussion is to convey the point of the contribution that the major online shops make. They do assist in increasing and boosting the sales and profits of auto parts and accessories.
Other mediums of selling auto parts include the click-n-post model, click-n-fit, click-n-collect, or a mobile van that will visit your home to deliver the product. Online businesses have always proven to be the most convenient form of purchasing, and this is why it has raised the game of auto part selling as well. It has not only boosted the sale of auto parts and accessories, but also driven the industry to a higher level. As per as the different statistics provided by researchers, it has been found that online businesses have attracted new buyers to buy auto parts and accessories in the major countries of Europe, such as Germany. Within Europe, sales of the automotive industry have increased by 14 percent from 2000 to 2012.
The impact created by brochures, test reports, ads and commercials has not been greater than the influence of the Internet and online retailing. It is further stated that even highly amateur users of the Internet, as well as the offline established players, are pushing themselves into buying automotive parts and accessories through online shops.
Success will need a rigorous niche and focus on developing the customer base, and a perfect alignment like “Customer-Product-Channel Fit” is a must-execute approach. New businesses have also used online retailing seriously when it comes to selling their auto parts, and hence their business models will be based on a high service cooperation network and modulating the service offers as per the terms of online retailing.