Ken Research - Brazil Automotive Aftermarket Research Report | Page 2

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 Brazil’s 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. 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.
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.
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 Brazil’s auto
manufacturers, increased production of high-technology components, and greater
international integration for Brazilian auto-products.
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.
Brazil’s 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 Brazil’s automotive manufacturers and aftermarket
companies are linked indirectly. During Brazil’s economic crisis there was a decline in the
automobile sales along with the automotive aftermarket. With the spike in the country’s
economy, the aftermarket will actually witness a real growth in the coming years.
Key Topics Covered in this Report:
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Brazil Automotive Aftermarket Research Report
Brazil Automotive Indu