Philippine Automotive Aftermarket
The Philippines has a growing and vibrant automotive aftermarket industry, driven by a rising number of vehicles on the road and increasing consumer demand for aftermarket products and services. In 2022, the total number of registered vehicles reached 13,889,136, an increase of 7% from the previous year. New automotive sales reached 372,083 units, an increase of 27% from 2021.
Vehicle ownership is increasing as it has become a need given the challenges of mass transportation in the Philippines. Attractive financing packages also make it easier to purchase new vehicles. These trends boost the demand for aftermarket products and services.
A significant portion of the country’s vehicle fleet is aging. The average vehicle lifespan in the Philippines is 15 years and more. Poor road conditions also contribute to vehicle deterioration. These difficulties lead to higher maintenance and repair requirements that create a substantial market for replacement parts and repair services.
Car enthusiasts and vehicle owners with high disposable income usually have a preference to personalize their vehicles with aftermarket accessories and modifications. This generates demand for vehicle customization jobs.
The automobile aftermarket in the Philippines is highly competitive, with a mix of local and international players. Aftermarket products such as replacement parts, accessories, chemicals, equipment, accessories, repair and maintenance services, and customization options from Asia, Europe, and the United States are readily available in the market. Key distribution channels include the following: 1) auto supply stores, consisting of retailers and wholesalers; 2) service centers, including both independent garages and chain service centers; 3) specialized customization shops; 4) hardware and home improvement stores which have a section dedicated to automotive products; and 5) online marketplaces. E-commerce platforms have become popular for purchasing aftermarket products and accessories. The diversity of distribution channels, coupled with the ease of cross-border shopping, has intensified competition in the aftermarket sector.
Among the challenges faced by the automotive aftermarket industry is the proliferation of counterfeit and low-quality automotive parts and accessories, which can impact consumer trust and safety. Stricter regulations related to vehicle emissions and safety standards may also impact the types of products and services offered in the aftermarket. In addition, there are automotive-related products that are under Mandatory Product Certification by the Bureau of Philippine Standards. Examples of these are brake fluids, tires, safety belts, automotive batteries, and rubber inner tubes.
Automotive aftermarket businesses should be ready to embrace digitalization and e-commerce to expand their market reach. The automotive industry’s movement towards low-carbon emission vehicles presents opportunities for firms dealing in eco-friendly aftermarket products. Collaboration with original equipment manufacturers (OEMs) and car dealerships can open new avenues for aftermarket businesses.
There are plenty of local and international automotive aftermarket brands in the market and competition is very stiff. Newer brands will experience challenges in market entry so it is highly advised to work with a distributor or partner who can help in marketing and promotions.
U.S. companies interested in connecting with Philippine automotive businesses should contact Jeanne.Santiago@trade.gov.