The Automotive Aftermarket Report - Estonia

Information

The car aftermarket in the Baltic countries starts to grow

After the market decline, due to the financial crisis, the aftermarket1 in the Baltic countries shows again growth trends. According to the study “The Car Aftermarket in Europe” the European aftermarket volume for passenger car components (excl. service) in 2007 was about 105 billion Euros in Europe.

Some future orientated aftermarket questions

Who will take part in the future aftermarket in the Baltic countries? It´s one of the most important questions for the existing aftermarket players in a growing market.

• Is there the necessity for the car manufacturers to build up larger and more extensive dealer- or service-partner-networks?
• Are car importers / dealers (OES) going to make closer aftermarket competition with the independents (IAM)?
• Are the big German, Russian and Polish parts distributors going to the Baltic countries?
• Is there the need of cooperation between national aftermarket companies?
• Is it necessary to implement new garage marketing systems in the Baltic countries?
• Will B2C web shops establish in the near future? Based on the Car Aftermarket Europe Report you will get a lot of decision guidance based on very well research data and country bench marks and the knowhow of the wolk after sales expert team.

Table of content

1. Introduction
2. Summary
   
   1. Overview about the Estonian aftermarket
   2. Activities of foreign companies in Estonia (Internationalisation)   
   3. Comparison of Estonian vs. Germany and Europe
   4. Outlook of the car aftermarket development in Estonia
   5. Questions about the aftermarket development in Estonia
3. General information about Estonia
   1. General data
   2. Economic data
4. Vehicle data
   1. Passenger car data
   2. Passenger car park by brand
   3. Truck data
   4. Bus data
5. Structure of OES distributors / garages 
   1. Figures by type of OES outlet
   2. OES Trade and buying groups
   3. OES garage marketing systems
   4. Largest car dealers / groups
6. Structure of IAM distribution
   1. Trade and buying groups
   2. Specialised trade and buying groups
   3. Auto centres
   4. Retail chains
   5. Wholesale distributors
   6. Specialised distributors/wholesalers
   7. Direct distributors
   8. Rack jobber
   9. Mass merchandisers
   10. E-Commerce companies
   11. Scrap yards
7. Structure of IAM repairers(number of outlets, total turnover, total staff)
   1. Multi brand garages
   2. Specialists
   3. Fast fits
   4. Garage marketing systems
      1. Full service garage marketing systems for mechanical repairs
      2. Full service garage marketing systems for specialised repairs
      3. Garage distance retailing brands
   5. gas stations
   6. Car wash
      1. Self service
      2. Automatic wash
      3. Other car washers
8. Aftermarket  volume by 10 product groups and OES/IAM shares
   1. Mechanical replacement parts
   2. Electrics/electronics
   3. Body parts incl. lighting
   4. Assemblies
   5. Tyres
   6. Oil / lubricants
   7. Paint
   8. Other chemicals
   9. Accessories
   10. Auto glass
9. Annex – company profiles
   1. OES company profiles, largest car dealers/groups
   2. IAM company profiles
   3. IAM trade and buying groups
   4. IAM autocentres
   5. IAM retail chains
   6. IAM large distributors
   7. IAM specialized distributors
   8. IAM direct distributors
   9. E-Commerce companies
   10. Scrap yards
   11. IAM repairer profiles
   12. Fast fits
   13. IAM full service garage marketing systems for mechanical repairs
   14. IAM full service garage marketing systems for specialized repairs
   15. IAM garage distance retailing brands
   16. Gas stations

9. Comparison: country vs. whole Europe

Charts & Data

In the period from 2007 in some European regions the car aftermarket volume was growing - in some regions decreasing. In the most of the West European countries the car aftermarket is the “cash cow” in the automotive market. The authorized car dealers e.g. earn with their aftermarket activities (components and services) about 20% of their sales revenue but more than 60% of their gross profit.

Based on the chart below, the car density (cars per 1.000 inhabitants) in the Baltic countries is low especially compared with the West European countries. That means, the future aftermarket volume may nearly double in the next 20 years and the business will develop good.

Situation of the parts distribution in the Baltic countries

In the Baltic countries the automotive aftermarket has historically developed mainly as a subordinated market segment besides the car sales. In recent years, influenced by the economic situation, the profitable after sales business gained in importance. A change of priorities and reorientation from car sales to the providing of sales services is taking place in the industry enterprises up to the car service companies.
Also EU regulations are opening new business opportunities for “free” workshops and spare parts distributors to compete with manufacturers’ authorized distributors/dealers.

Aftermarket thesis for the Baltic countries

Are the big European parts distributors and garage concepts from abroad going to intensify the car aftermarket competition in the Baltic countries?
Compared with the most of the West European countries the car aftermarket of the Baltic countries is on a low level (about 0,7% of total EU 27).

The West European distributors focused in the past on the more important Eastern European countries. On the other hand the new establishing big parts distributors in the MEO countries developed in other eastern countries with higher market volume.

Thus, the three Baltic countries belong in the past 20 years to “the forgotten aftermarket countries” in Europe. But what will happen in the future? After the consolidation and concentration process of the big foreign parts distributors, they will discover the Baltic countries and intensify their aftermarket activities. The same applies to the auto industry and the big car dealers.

What makes the Baltic aftermarkets different?

What the study founds out concerning major differencies between the Baltic countries vs. Germany?

• The private car owner spend less money for car components per car/year than in the West European countries (approx. -25%).
• Compared with the West European countries the aftermarket competition in the Baltic countries is not so hard. This affects the competition between OES and IAM as well as the IAM intergroup competition.
• In the Baltic countries the independent repairers are dominating. In Latvia 93% and Lithuania / Estonia 96% from all repairers are independent repairers. In Germany, comparatively - the IAM garages held 56% of total garages. With other words the independent repairers in the Baltic countries hold much more market shares than the authorized repairers.
• The price level for qualitative car components is higher or nearly the same than in West Europe. But the labor is approx. 2 – 2,5 times cheaper.
• In Latvia and Lithuania there is only one workshop system/chain for mechanical repairs - Bosch Car Service. In Germany there are 29 full service workshop systems/chains which means 62 % of all independent repairers are part of one of the service systems/chains;
• The average age of vehicles in the Baltic countries is much higher than in Germany. For example in Latvia the average car age is 11.5 years, in Germany it is 8.1 years.

Statement

Statement of an important market player in the Baltic countries about original equipment spare (OES) parts market development in the next years

Mr. Arturs Cjunskis, After Sales Manager, Auto Group Baltic

I´m thinking positive - authorized car dealers have future. Authorized dealers network will develop well in the Baltic countries. Also car manufacturers have strategic future plans to increase their car aftermarket business. We are developing additional product lines which are 25-30 percents cheaper than genuine parts. We are offering price package prices (material incl. work). Both of them authorized car dealers and independent garages have future in the Baltic countries. Of course also independent garages will develop and new garage concepts will be installed. Today in Baltic countries a lot of free independent garages use illegal sources of information and diagnostic programs free of charge, and they do not pay tax for the state. This is one of the reasons why they can offer better prices than authorized car dealers. If the Baltic countries are developing similar like the West European countries then also these things will be arranged, free independent garages will increase prices and authorized car dealers will stay more competitive.

Methodology

The methodology of the ”Car Aftermarket Europe Report”.

The market study is based on 30 years experience in the automotive aftermarket and the support of after sales experts in all European countries. It is a result of expert interviews in the researched countries, questionnaires filled out by market participants, methods using the European Car Parts Calculator and the wolk after sales database.

The methodology is based on:

• extensive desk and data bank research;
• the market volume is calculated for 10 product groups based on different car park figures for each country;
• expert interviews and workshop with national automotive after sales experts;
• all data are evaluated and compared with the wolk after sales database;
• the data are cross checked and validated.

Contact us

{/tab}