Automotive Aftermarket Industry Update Q3 2024
Read more about M&A activity and trends in this sector
Share
Automotive Aftermarket Summary
Sector Commentary
Industry
Industrial markets
KPMG Corporate Finance LLC’s investment bankers have extensive Industrial Markets transaction and industry experience, which enables them to understand the industry- specific issues and challenges facing our clients.
- Despite the recent Fed rate cut, experts suggest that new car purchases may not increase immediately as auto loan interest rates are typically slow to adjust. As a result, despite a challenging macroeconomic landscape, the U.S. automotive aftermarket is expected to remain resilient
- As credit card debt in the U.S. continues to rise, reaching $1.14 trillion by mid-2024(1), Americans are deferring vehicle purchases and increasingly turning to the aftermarket for comparatively more affordable maintenance and repair options to further extend the life of their vehicles
- Additionally, the persistent high interest rate environment has led automakers to prioritize the production of luxury-end cars for wealthier individuals, resulting in limited availability of affordable models in the market. This trend is further driving consumers to keep their current vehicles longer, thereby increasing the need for a wide range of aftermarket products and services
- The gradual adoption of battery-electric vehicles and software-defined vehicles continues to reshape the automotive aftermarket. These technological advancements are set to impact aftermarket parts and service providers as vehicle maintenance frequency and complexity are likely to decrease. However, this shift also brings new service and repair requirements, particularly related to battery systems, thermal management, and advanced electronic components
- According to the Bank of America Global Research forecast, electric vehicles are expected to make up approximately 8% of total vehicle sales in 2024, 14% in 2027, and roughly 29% in 2030
- Aftermarket, being highly-fragmented, remains an attractive industry for private equity groups, with the nondiscretionary automotive service and general repair categories particularly emerging as popular investment areas in the current economic landscape
Download the document
Meet our team
In today’s market, you need an advisor with objective insight at every step of the transaction process. We work with you throughout the full deal cycle to create value and successfully execute your deal strategy.
Ford Phillips
Managing Director, KPMG Corporate Finance LLC
Ford Phillips
Managing Director, KPMG Corporate Finance LLC