Key Drivers Fuelling The Global Automotive Service Market Expansion

T Murrali
08 Jul 2024
09:29 AM
4 Min Read

The automotive service market is witnessing significant trends in various vehicle components, due to high demand for batteries, air filters, cabin filters, oil filters, wiper blades, and starter-alternators.


The automotive industry is experiencing a profound transformation with the integration of cutting-edge technologies and the development of advanced vehicles. Driven by the demand for enhanced driver information, improved fuel efficiency, reduced emissions, increased safety, and superior driving experiences, electronic systems are rapidly replacing mechanical components in cars. Original Equipment Manufacturers (OEMs) are now introducing innovative features even in mid- and low-end vehicles, resulting in a substantial increase in the number of sensors per car.

Advanced Driver Assistance Systems (ADAS) like lane assist, blind spot detection, adaptive cruise control, and electronic stability control are also driving the growth of electronic components in vehicles. This necessitates architectural redesigns and the shift towards digitisation and electrification, crucial for automotive OEMs to meet evolving consumer needs and remain competitive. Partnerships and collaborations with consumer electronics, energy, and telecommunication companies are becoming increasingly common to leverage their expertise in battery and advanced electronic systems.

The drive for greater fuel economy through hybrid and plug-in hybrid vehicles is a major factor in this trend, with lightweight aluminium chassis and electrified powertrains playing a crucial role in reducing carbon emissions. In a nutshell, increasing vehicle population and a trend towards digitisation and electrification are key drivers for the growth of the global automotive service market, which is projected to grow by $ 401.4 billion from 2024-2028, with an estimated CAGR of 8.09% during the forecast period. Therefore, automotive service providers can capitalise on these developments by offering engineering solutions to optimise OEM and supplier processes and products, contributing to market growth. However, according to Technavio, the automotive industry's uncertainties pose challenges.

The automotive service market is experiencing notable trends in various vehicle components. Batteries, air filters, cabin filters, oil filters, wiper blades, and starter-alternators are in high demand due to an increased focus on vehicle maintenance. Collision body repairs continue to grow with the rise in road accidents. Vehicle customisation is a significant trend, with consumers seeking chrome accessories, spoilers, LED lights, alloy wheels, and other upgrades. Connected cars and mobility fleet sharing are transforming consumer habits. The market for passenger car registrations remains strong, with materials like steel, iron, aluminum, crude derivatives, nylon, polyester, and rubber being key in vehicle production. Sustainability is a priority, with automotive components undergoing innovation for improved efficiency.


The automotive industry is currently facing significant challenges due to the global semiconductor chip shortage and the ongoing Russia-Ukraine conflict. The chip shortage has resulted in production halts for various automotive OEMs, negatively impacting the market. Additionally, the Russia-Ukraine conflict has disrupted supply chains, making it difficult for automotive manufacturers to procure raw materials and components, including semiconductors. Rising costs and unavailability of these essential components have hampered vehicle production, with some major automotive companies temporarily halting operations in Russia due to sanctions.

The automotive service market encompasses aftermarket services for auto sales, passenger cars, light and heavy commercial vehicles, two-wheelers, and special utility vehicles. Sustainability is a growing concern, influencing consumer habits towards shared mobility, electric, and hybrid vehicles. Franchise general repairs, tyre stores, and maintenance services for exterior and structural issues remain in demand. Price sensitivity, repair time, and profitability are key challenges. Internal combustion engines face aging cars requiring replacement parts. Shared vehicles, taxis, and online sales platforms leverage software expertise and connected car technologies. Self-driving capabilities, sensors, and aftermarket solutions cater to price-sensitive customers.

Mechanical Services and Emerging Markets

The automotive service market encompasses various mechanical offerings for automobiles, including oil filter changes, wiper blade replacement, new tyres, and battery replacement. The need for enhanced performance and dependability in contemporary vehicles drives the demand for sophisticated solutions, increasing the requirement for automotive services.

Economic activities, particularly in emerging nations, have led to high demand for commercial vehicles, particularly light-duty commercial vehicles like minivans. These vehicles are extensively utilised for business purposes, such as intercity transportation, fuelling the expansion of the light-duty commercial vehicles market and subsequently the demand for automotive services.


The automotive service market covers a wide range of offerings beyond auto sales, including aftermarket automotive services for vehicle components. Sustainability is increasingly influencing consumer habits, leading to a growing interest in mobility fleet sharing and two-wheeler markets. Lifestyle choices and the aging of cars drive demand for replacement parts and shared vehicles, such as taxis and ride-hailing services. Online sales platforms and software expertise are transforming the industry, enabling more efficient aftermarket solutions. Sensors and connected car technologies are revolutionising maintenance, offering real-time data for repair time and profitability. The internal combustion engine remains a significant focus, but the shift towards electric and self-driving capabilities is gaining momentum. Price-sensitive customers and the need for quick repair times continue to challenge profitability in the market.


The automotive service market encompasses a wide range of industries and services related to the maintenance, repair, and enhancement of various types of vehicles. This market includes aftermarket automotive services, vehicle components manufacturing, and maintenance services for passenger cars, light commercial vehicles, heavy commercial vehicles, two-wheelers, Special Utility Vehicles, and more. Consumer habits and lifestyles continue to evolve, with a growing trend towards sustainability and shared mobility solutions like fleet sharing and taxis. Automotive technology advances, including electric and hybrid vehicles, connected car technologies, and self-driving capabilities, are also driving demand for aftermarket solutions. Price-sensitive customers prioritise repair time and profitability, while repair technicians diagnose and address malfunctioning vehicles using sensors and replacement parts. The market includes a diverse range of materials, from crude derivatives and metals like steel, iron, and aluminium, to synthetic materials like nylon, polyester, and rubber. Vehicle customisation trends continue to influence demand for chrome accessories, spoilers, LED lights, alloy wheels, and more.

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