Aftermarket parts trade thrives as drivers keep cars

While sellers of new and used cars alike struggle, some auto-parts operators are prospering in tough economic times, as drivers strive to keep their cars running longer.

Consumers who have financial concerns and can't replace their existing cars are doing everything they can to keep them in order. But the older cars get, the more work they need. As a result, the engine and parts aftermarket and the second-hand parts market is brighter than ever.

Locally made aftermarket parts are equal in quality to those made for assemblers of new cars but cost up to 70% less, says Punika Kitaphanich, the president of the Worachak auto-parts traders' club.

The aftermarket parts business has been growing by 20-30% since late last year, she said. "Some of our members claim to have seen their businesses grow more than fourfold. We don't have an exact estimate of the industry's value, though I can say that this industry is never down."

Worachak has been the country's hub for aftermarket parts for 113 years and there are very few items that can't be found there. Miss Punika says the fastest-moving items are brakes, filters and pistons, which often need replacing.

Out of the total local production of aftermarket parts, 10% is exported to countries ranging from Russia to Pakistan.

The remaining 90% serve the local market, with provincial traders the largest group of customers, followed by garage operators and insurance companies. Retail customers are limited.

"Most customers are old customers who have been dealing with us for many years. They just call up with the serial numbers and we deliver the products to them," Miss Punika says.

Also thriving is the second-hand parts market, where prices 50% lower than for new parts appeal to budget-minded drivers.

Vallop Tiasiri, director of the Thailand Automotive Institute, said that second-hand parts originate from two sources: local garages or insurance companies that sell unmovable cars for scrap, and imports, mainly from Japan for passenger cars or Taiwan for buses.

Unmovable cars are defined as vehicles that have encountered road accidents, with some of functions damaged but other parts still in top working order. Owners sell them as scrap as repairs could cost more than buying a new car, Mr Vallop said.

As most second-hand parts are imported from Japan as scrap to avoid tax, it is difficult to gauge the size of the industry.

"What happens is the second-hand auto-parts traders send garage men to identify the parts, which can still function well, separate that parts and sell them," he said.

Most customers tend to be in public transport, logistics or farming, sectors in which vehicles can log hundreds of thousands of kilometres.

Mr Vallop said the second-hand auto-parts market in Chiang Kong has been established for long time, while Baan Pong in Ratchaburi is the hub for bus parts.