Everything you need to know about automotive replacement parts
Manufacturing automotive replacement parts is a huge industry in the country. The consumption of the replacement auto parts industry is directly proportional to the demand for new vehicles. Almost 70% of the parts produced are for original equipment, and the remaining 30% is for the aftermarket (repair and specialty equipment). In the year 2008, there was an economic recession which affected the sales of vehicles. Even the Big Three car companies, namely Ford Motor Company, General Motors, and Chrysler, suffered. This recession affected markets across the globe. However, foreign manufacturers were able to make inroads into the country’s market before the recession, and thus, they edged out the American automotive companies. In September 2008, suppliers of automotive replacement parts were caught between a rock and a hard place. On the one hand, the prices of raw materials rose substantially. On the other hand, they had to face reduced demand from both customers as well as automotive manufacturers. Post this recession, industry analysts suggested that the suppliers had to run at 80% capacity to make a profit, but in the year 2009, suppliers were running at only 50-60% capacity. Automotive replacement parts can be split into two categories, aftermarket parts or original equipment (OE).