The aftermarket for light vehicle components and parts in China is forecast to increase at an annual rate of 17.9%, reaching 76.9 billion yuan (US$10.6 billion) in 2011, according to the Freedonia Group. The prime driver behind the strong growth in China's light vehicle parts aftermarket . It has grown more than 16% annually since 2001, according to the report.
Whereas the China vehicle park was at one time primarily composed of business and government vehicles, consumer sales now drive the industry as personal income has risen.
Increased aftermarket spending per vehicle will also contribute to growing demand, but to a much lesser extent than the growth in the vehicle park, said the Freedonia Group. Overall growth in per vehicle spending is attributable to a myriad of factors. As personal income continues to rise across the country, the automotive aftermarket will see increasing demand for non-essential upgrades to automobiles and a preference among consumers for value added products such as electronics -- e.g., autosound, navigation systems and the like. The rampant use of counterfeit parts has a negative impact on the aftermarket because the parts are priced very low. However, on the other hand it contributes to growth in the aftermarket as the use of inferior counterfeit parts increases the repair frequencies for light vehicles.
Mechanical products will remain the largest light vehicle aftermarket segment through 2011, due in large part to the regular replacement requirements of products such as filters and the high cost of items such as engines and associated parts. Demand for electronic products, which include autosound, electronic controls and modules, navigation products and security systems, will see the fastest growth through 2011. Replacement rates for electrical, exterior and structural parts will also experience robust growth.