How to future-proof your automotive aftermarket revenue management 

Automotive aftermarket revenue management is the set of practices, processes, and tools used to maximize revenue and profit from parts, accessories, repair labor, and service-related sales after a vehicle is sold. It covers pricing, inventory, forecasting, promotions, channel strategies, and performance measurement. 

Effective revenue management increases profitability, improves parts availability, reduces waste, supports competitive pricing, and enhances customer satisfaction. It helps convert demand into profitable sales while balancing service levels and inventory costs.

What challenges do Original Equipment Manufacturers (OEMs) face in automotive aftermarket pricing today?

As an OEM, you know how lucrative the automotive aftermarket business can be, typically realizing higher profits from aftermarket parts than from vehicle sales. This sizable market and rapidly growing sub-industry has an estimated value of approx. $450 billion globally. This is in no small part due to the considerable number of independent manufacturers selling their own brands of aftermarket parts and accessories, often competing directly with OEMs. In addition, wholesale distribution channels, which sell products to online retailers, car dealerships and independent installers, intensify the competition.

Here’s a real-world example that drew significant attention in the European press: MINI and Peugeot use identical engines in certain models. A comparison revealed that the same replacement part—a camshaft phaser with the exact same part number—was priced at 490 euros ($575 USD) by MINI and 70 euros ($82 USD) by Peugeot. The disparity raised immediate questions about pricing strategy and consistency.

There are valid arguments for why OEM parts are priced the way they are, and many people strongly prefer them for good reasons. But, as an OEM, how do you compete in a current market like this? There are a variety of solutions available, with varying degrees of success, that address the aftermarket pricing challenges you face today. The critical question is whether these solutions can meet tomorrow's challenges. In the future, we think some exciting developments in the aftermarket will deliver significant benefits to OEMs, if you’re prepared to take advantage of them.

How are electric vehicles (EVs), connectivity, and data changing the auto aftermarket?

Technological change in the auto industry is arguably increasing at a pace never seen before. For decades, cars and trucks were designed, developed, manufactured and sold in pretty much the same way, with existing models getting a regular refresh. Now, automotive technology has become more sophisticated as electronics and software become more embedded in vehicles. Below are some of the main drivers of this unprecedented change and how they will likely change the dynamics of the aftermarket industry:

• Electrification – EV adoption will eventually become car buyers' primary mode of choice. Since EVs require specialized capabilities, consumers might increasingly favor servicing their vehicles at an OEM-affiliated dealership.
• New Business Models – Subscription-based consumption models and predictive maintenance services, primarily driven by OEMs. One major automaker announced a plan to realize $23 billion annually by 2030 via “software-enabled product offerings and subscriptions.”
• Connectivity and Data Monetization – As a new revenue source, industry experts predict that connected car digital services will become the main driver of after-sales profitability for vehicle manufacturers. This is a big one that will reshape profit pools and give OEMs a significant leg up in the aftermarket as cars become more digitally enabled.

Given that these market forces will most assuredly affect the industry, the question that you, as an OEM, should consider is, "How future-proof is my aftermarket business system?" Consider the revenue management system you currently use to plan, execute, analyze, and manage your pricing and incentive programs. As the amount of data expands rapidly, so will the number of ongoing transactions. Will it be up to the task? 

The capabilities needed to boost pricing and incentive management

Your revenue management system may primarily focus on current business needs, but is it also capable of quickly adapting to future market dynamics? The rate of change and competitive pressure will require automated, real-time business insights and flexibility to extend the scope as your needs evolve. Plus, do you know how costly it will be to make changes?

The core components of a future-proof aftermarket revenue management program include:

• Pricing strategy and optimization (parts, labor, and packages)
• Demand forecasting and inventory planning
• Promotion and discount management
• Channel and customer segmentation (retail, wholesale, online)
• Performance measurement (KPIs and reporting)
• Systems integration (DMS, ERP, e-commerce, CRM)

Vistex software helps automotive aftermarket businesses take control of revenue management by embedding it directly within the SAP landscape, eliminating the need for disconnected systems and constant ERP integrations. By creating a single source of truth across pricing, incentives, and chargebacks, the software improves end-to-end visibility of your performance. Built-in analytics deliver real-time insights through dashboards and KPIs, enabling teams to quickly identify revenue leakage and trends, so they can make faster, more informed decisions.

How OEMs can improve pricing, incentives, and margin control today

Now is the time to prioritize aftermarket pricing as much as new vehicle sales before the boom starts. McKinsey estimates connected car programs will deliver between $250-400 billion in annual incremental value by 2030. To effectively manage future aftermarket prices and maximize margins, you must set the right price at the right time and incentivize your partner's customers when needed. To achieve this, complete transactional visibility and control over direct and indirect costs are required across both channels, considering the particularities of each market.

Automakers often need help planning compelling offers and incentives to drive increased sales. This will undoubtedly be the case with future connected services, subscriptions, maintenance agreements and other technology-enabled monetization opportunities. Inflexible systems that are costly, difficult or unable to adapt to changing conditions can leave you trying to catch up in the aftermarket race. The ideal future scenario involves a single, centralized solution that avoids data disruption or duplication, improves accuracy and is adaptable to future market conditions. With data in one place, you gain complete control over your revenue management processes through a simplified, fully integrated IT landscape.