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Can accessories reignite the automotive sector? Faced with a shrinking market for new vehicles, Original Equipment Manufacturers (OEMs) must take the opportunity to tap into the rapidly-growing accessories aftermarket, which--through the increasing desire for 'personalization' amongst consumers--is growing exponentially, says Capgemini's senior automotive consultant Sven Dharmani.

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In the past, automotive companies have typically focused the bulk of their efforts on the way that vehicles are marketed and sold. However, following a decline in global vehicle sales, increased emphasis is now being placed on the aftersales elements of service: parts and accessories. Statistics show that the aftersales business can have a disproportionately large effect on the overall customer experience of an OEM, its dealers and distributors. Industry estimates indicate that around half of the profits made in the automotive industry come from service, parts and accessories. In addition, the growing desire amongst consumers to personalize their vehicles is boosting the accessories market. More mature consumers of the 'baby boomer' generation are more likely to purchase products that constitute the basics and are traditionally less active in the accessories market as a whole. However, the increasing buying power of the younger generations X and Y is expanding the accessories market as consumers--brought up with the internet and other media--crave greater levels of personalization and freedom of expression.

While the potential business value from accessories may be high, execution has posed significant challenges for manufacturers. Accessories supply chains--markedly different from those of the vehicle--are increasingly complex, involving an ever-growing number of stock-keeping units, multiple paths of material flow, several and often competing distribution channels, significant reverse logistics issues related to returns of component parts and...

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