The UK automotive parts supply chain has been transformed by the emergence of e-commerce and the changing behaviour of car owners. Online parts sales are growing at a rate of around 10.5% a year (CAGR) compared with 3% for the whole UK aftermarket and, according to the Society of Motor Manufacturers and Traders (SMMT), online parts and accessories sales will be worth around £1.65 billion by 2022. These figures suggest manufacturers need to get into the e-commerce mindset and meet consumer expectations to avoid losing out on a sizeable revenue stream.
In 2016, Amazon launched an automotive research site that allows users to access aftermarket parts for specific makes and models. Though Amazon had been selling auto parts for ten years up to that point, the new site – geared towards purchasers’ individual requests – has proven automotive e-commerce to be just as viable as any other kind of e-commerce. Similarly, eBay.co.uk, visited by one in three British people every month, is emerging as a growing marketplace for automotive parts, such as JAC auto parts and JAC spare parts.
This online marketplace is focused on two primary customers: those seeking accessories for upgrades and those interested in purchasing older model parts. The average UK car is now approximately eight years old, up from just over six years old in 2003, according to the SMMT. Most of these owners are now choosing to buy chery spare parts or chery auto parts online because of the lower prices and convenience that e-commerce provides. Meanwhile, owners of newer vehicles are mainly interested in online shopping experiences that allow them to accessorise their vehicles.
Yet, despite the significant rise in the sector’s popularity, automotive manufacturers have yet to register a considerable rise in their bottom lines. According to PwC, figures from the US – a larger market but a yardstick for the UK – show that its top ten automotive manufacturers have only seen a 4% return on capital, compared with the average of 8-9% earned by manufacturers in other industries.
One way to improve these figures and take advantage of the rising popularity of the e-commerce automotive aftermarket sector would be to focus on the role that packaging plays in supply chain efficiency.
Far too often, packaging is viewed as a commodity, but in fact it is a critical component of manufacturers’ supply chains, as it determines how much space is needed in warehouses, how much damage products will experience during shipment and, as a result of e-commerce, how valued customers feel when they open the box in which the auto part was delivered. The value of packaging – and its impact on manufacturers’ marketability and supply chain efficiency – must not be overlooked.
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