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Several trends will shape both the original equipment manufacturer (OEM) and aftermarket segments of automotive parts distribution in 2025, from the growth of e-commerce to the cost of real estate to labor shortages to the opportunities and instabilities of global markets. With these and many other issues, TGW Logistics’ warehouse automation, predictive analytics, and ultra-dense storage solutions can ease the pressures that each presents companies in the automotive aftermarket segment.
Growth of E-Commerce and Direct-to-Consumer Models
Amazon and other online retailers have taught consumers, especially Americans, to expect quick, efficient, and accurate availability of parts.
“Like almost every other market, consumers increasingly expect fast and convenient access to parts online,” says Blake Neal, Director of Business Development at TGW Logistics, North America.
Platforms like Amazon and specialized automotive marketplaces have revolutionized how parts are purchased and distributed, enabling faster delivery and greater transparency for consumers.
New ways to serve consumers are part of that mindset, too, including the “Internet of Things” (IoT) and the advance notice it can provide for maintenance needs before they become problems. Subscription-based maintenance plans and real-time tracking of repair statuses are reshaping customer expectations in the aftermarket. Warehouse automation technologies help unknot some of the complications that go with those opportunities.
“Next-gen enterprise resource planning (ERP) and warehouse management systems (WMS) ensure products are always available and ready to ship,” Neal says. “On top of that, AI and machine learning are helping businesses forecast demand more accurately and optimize inventory levels.”
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Impact of Electrification on Spare Parts Demand
“Electric cars have created a whole new industry,” Neal adds. “Unlike traditional internal combustion vehicles, EVs require entirely new components like lithium-ion batteries, electric motors, and advanced electronic systems. Companies are also investing in smarter inventory management to reduce lead times and improve efficiency.”
This has increased pressure on warehousing space. Trying to optimize warehousing space cubically has upped demand for ultra-dense storage solutions like double-deep shuttles, which can handle extreme weights and provide efficient stocking and retrieval.
Advancements in Predictive Maintenance and Telematics
Another trend heightening expectations for quick delivery of automotive parts is the artificial intelligence (AI) capability of vehicles to sense and communicate to service providers their upcoming maintenance needs.
It was once only in science fiction that a machine would sense that a part would soon need replacement or reconstruction. Still, consumer and commercial vehicles are now routinely built with that ability.
“Advancements in predictive maintenance and telematics are allowing vehicles to identify service needs proactively, driving demand for just-in-time inventory solutions,” Neal says. “Connected cars can alert owners and service centers to issues before they become major problems, reducing downtime and improving the customer experience.”
Sustainability Driving Remanufacturing and Recycling Efforts
Consumers, companies, and governments are all creating a heightened expectation of more environmentally sustainable processes and products in practically every industry. That means not only must transportation be more fuel-efficient, but that packaging must contain and protect better with less weight, and that more manufactured components are rebuilt, restored, or recycled as well.
“Sustainability has become a driving force across the OEM and aftermarket sectors,” Neal notes. “There is pressure to reduce carbon footprints, not just in vehicle production but throughout the entire supply chain.”
Challenges for Spare Parts Warehouse Logistics
Labor Shortages
Changes in workers’ expectations, a dearth of technically trained workers, and historically low unemployment rates have left whole industries, including warehousing and logistics, scrambling to find new hires and get them up to speed with training.
“As e-commerce continues to surge and distribution networks expand, the demand for qualified logistics and supply chain management workers has skyrocketed,” Neal says. “In the automotive sector, the complexities of handling different types of vehicles, automation, and supply chain logistics make the issue even more pressing. To stay competitive, it’s crucial to address this talent gap through upskilling existing employees and attracting new talent.”
Resilience Amid Geopolitical Uncertainties
Geopolitical risks to the global supply chain include known threats, such as the Russia/Ukraine war, piracy against ships in the Arabian Sea area, the volcanic volatility of Indonesia, and the political instability of the Democratic Republic of the Congo. They also include the possibilities of new civil wars and international hostilities, trade wars among previously cooperative nations, and the sudden overthrow of trade-friendly governments.
“Demand for raw materials like lithium, cobalt, and nickel is surging, but these resources are geographically concentrated and subject to price volatility,” Neal says. Nearly half the world’s proven nickel reserves are in Indonesia, where earthquakes and volcanic eruptions are common. Chile, Argentina, and China collectively hold most of the world’s lithium reserves. The Democratic Republic of the Congo, the subject of two failed coups in recent years and currently trading hostilities with neighboring Rwanda, dwarfs the rest of the world in cobalt production.
More intense use of warehouse logistics will provide manufacturers and distributors some cushion against these types of supply disruptions and uncertainties.
Complexity in Vehicle Technology Offers New Logistics Challenges
The growing complexity of vehicles is a final challenge to the supply chain.
“As vehicles become more technologically advanced and system based, maintaining and repairing them will require different knowledge and equipment to conventional vehicles,” Neal says.
“This could lead to longer repair times, higher costs, and increased pressure on aftermarket supply chains to keep pace with the changing needs, especially with future EVs and ‘connected’ or ‘driverless’ vehicles. The traditional automotive industry is not going away either, so this is a case of ‘and,’ not ‘instead.’”
Forward-Thinking Strategies for 2025 and Beyond
Investing in Advanced Warehouse Management Systems (WMS)
The increasing complexity of vehicles, globalization of supply chains, and growing consumer expectations for the near-instant provision of parts will challenge every company serving OEM or aftermarket automotive industry segments.
Population concentration means customers for aftermarket suppliers, but that same concentration makes new storage and retrieval space scarce.
“U.S. warehouse real estate is becoming increasingly scarce and expensive, particularly in large urban centers where aftermarket parts are needed,” Neal says. “Rather than investing in new warehouses that may be geographically suboptimal, companies can leverage warehouse storage automation to maximize existing space and improve operational efficiency.”
TGW Logistics’ offerings enhance the use of existing warehouses range, from automated storage and retrieval systems (ASRS) to innovative packaging machines and warehouse management systems that provide real-time inventory tracking and intelligent order processing.
Optimizing Warehouse Storage for Increasing Part Complexity
Today's average car has 30,000 individual components, and while some parts fit multiple brands and models, others are exclusive to a single style and make. With nearly 6,000 brands and models of light vehicles sold in the United States today, it takes no great imagination to realize how those numbers challenge parts suppliers’ capacities.
Many companies are seeking to maximize the use of existing warehouse space and gain other efficiencies by investing in ultra-dense storage hardware, robotic retrieval, and warehouse logistics software that integrates such systems with exacting and predictive inventory capabilities.
“Practically, this has led to an increase in stockholding and pressure on warehousing space,” Neal says. “Trying to cubically optimize warehousing space has never been so important, and investments in ultra-dense storage solutions like double-deep shuttles are seeing an increase in demand as they can handle the extreme weights seen in the industry.”
Enhancing Collaboration Across the Supply Chain
As supply chain complexities increase, manufacturers and distributors will likely be more directly involved than ever with their suppliers, transporters, warehouse technology providers, and customers. Neal says collaborative resource use, even among competitors, may become an increasingly normal part of business.
“Supply chains are only as strong as the networks that support them. Companies must find new and novel ways to build partnerships across their value chains—collaborating with suppliers, technology providers, and even competitors where it makes sense,” he notes. “Shared supply chains, joint ventures, and co-investment in logistics assets can drive efficiency far faster than going it alone.”
Trends and Opportunities for Automotive Spare Parts Logistics
Globalization of supplies and markets, expectations for sustainability, new technologies, consumer demands, and a host of other factors will only increase the complexity within the OEM and aftermarket parts industries, and the speed at which that complexity multiplies.
- E-commerce and Direct-to-Consumer business models in other industries create new expectations in automotive aftermarket customers.
- Increased automation, from robotics to software, affects every level of industry.
- Artificial Intelligence and the Internet of Things (IoT) are bringing to reality everything from self-diagnosing vehicles to real-time inventories.
- Labor shortages will push companies to reskill existing employees and to be innovative in attracting new ones.
- Sustainability will require more logistics to handle recycling, reusing, and rebuilding of components rather than landfilling them, along with more efficient handling and transportation methods.
- Resilience—the ability to respond to sudden contingencies such as pandemics and new geopolitical instabilities—will see more manufacturers and distributors diversify their supplier bases, onshoring or nearshoring production, and leveraging digital tools that provide them with greater agility.
It’s Possible with TGW Logistics
Fast, reliable, cost-effective warehouse logistics are crucial in today’s fast-changing automotive parts markets. TGW Logistics partners with distributors worldwide to provide high-performance automated warehouse systems for everything from ultra-dense storage to order fulfillment.