Brazil Automotive Aftermarket Research Report

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Brazil Automotive Aftermarket Research Report
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The report titled Automotive Aftermarket in
Brazil, provides a comprehensive analysis of
Brazils automotive aftermarket, growth of the
sector, major products, hierarchy, new trends,
developments, technology and future of Brazils
automotive aftermarket. There are about 150,000
aftermarket businesses in Brazil out of which 60
percent are distributors and retailers, 36
percent are auto centres and service shops, and 4
percent are car-dealer service departments.  
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Industry Overview Brazil is the ninth-largest
vehicle market in the world, with sales over 2
million in the recent years. The countrys
political and economic crisis has affected the
aftermarket market. Original equipment
manufacturers (OEMs) and the automotive
replacement market are the main markets in
Brazils automotive industry chain. Brazilian
automobile industry is responsible for the growth
of the countrys economy since the beginning of
the 20th century. The encouragement from
manufacturers to establish the automobile
industry has led to the development in production
and subsequent commercialization of automobile
aftermarket boosting the national economy.
Originally the automotive aftermarket was to meet
the needs of the automakers in terms of both
production and after-sales demands. The increase
in car sales in the recent years has led to a
natural increase in demand for replacement parts,
driving the growth in the automotive aftermarket
sector. Brazilian aftermarket sector has
witnessed decline comparing to other sectors of
the automotive industry. The aftermarket is
responsible for the resilience demonstrated by
the sector during the recent period of economic
recession that was experienced by the
country. 
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Brazilian Aftermarket Growth, Products and
Structure Brazils aftermarket need to upgrade
itself with the ongoing trends compared to the
aftermarkets elsewhere in the world. It starts
from how the aftermarket is structured, how
companies treat customers, what products are made
and carried. If Brazilian aftermarket is upgraded
to the 21st century then the country will witness
a drastic growth by the year 2020. The
aftermarket is comprised of manufacture of
cylinder blocks, check valves, engines, bodywork
pieces, drive shafts, brakes, crankshafts,
gearboxes, bodywork pieces, engines, transmission
boxes, axles, and truck brakes. There are many
challenges and opportunities in Brazils
automotive aftermarket because of its complexity.
Brazilian aftermarket almost resembles the
aftermarkets around the globe and a hierarchy
defines it. It starts with manufacturers of
complete auto-parts systems on tier one,
producers of parts and components for systems
suppliers on tier two, isolated parts
manufacturers in tiers three and raw materials
producers in tiers four. The automotive
aftermarket is highly fragmented and consists of
a variety of distribution channels.  
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The Brazilian automotive aftermarket is very
informal and most of them are managed like family
businesses with one subsidiary and few employees.
They do not use automated systems to generate
analytical information that could help determine
product portfolio mix and to place orders, but
depend on the telephone. Majority of the
consumers are holding on to their current car
instead of buying a new one due to the tough
economy. This trend has resulted in the growth of
the automotive aftermarket with consumers
spending more money on vehicle maintenance.
 
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Developments and Technology in the Aftermarket
Advanced technology, such as autonomous driving
and connected mobility, are an added advantage in
the aftermarket industry. The forthcoming
vehicles require new type of technological
intelligence equipment. However, Brazil
aftermarket is not advanced and auto- parts
manufacturers and suppliers are not ready to meet
the growing technological demands. The Brazilian
government has made few mandatory improvements in
Brazilian vehicles such as energy efficiency and
safety. The government is planning to support
international competitiveness for Brazils auto
manufacturers, increased production of
high-technology components, and greater
international integration for Brazilian
auto-products.  
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Future of Automotive Aftermarket in Brazil The
aftermarket industry will face complexity in the
next few years due to many challenges and
opportunities. There will be a demand for various
aftermarket products for current and older
vehicles, but the demand will become more
sophisticated as new vehicles incorporate
different and advanced technologies. It was
observed that the car production in Brazil has
increased compared to the recent years along with
a continuing growth in the light commercial
vehicles, trucks and buses. The automotive
aftermarket industry is recovering rapidly with
the Brazilian economy as a whole. Brazils
aftermarket growth is obstructed by debt and a
low liquidity ratio. The aging national fleet and
pending economic recovery has re-energized
automotive development that will likely boost the
growth. The growth in Brazils automotive
manufacturers and aftermarket companies are
linked indirectly. During Brazils economic
crisis there was a decline in the automobile
sales along with the automotive aftermarket. With
the spike in the countrys economy, the
aftermarket will actually witness a real growth
in the coming years.  
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