Solid Automotive Buys Motor Vehicle Spare Parts Firm for RM6mil

Solid Automotive Bhd has acquired motor vehicles spare parts company SG for RM6mil. The acquisition represents a new growth avenue for Solid Automotive in the general automotive aftermarket parts industry. SG is well-established in trading genuine automotive parts, including Perodua, Proton, and Nissan brands, with a customer base of over 300 spare parts shops. The acquisition is expected to tap into SG's established distribution channels.

Solid Automotive Bhd has recently acquired motor vehicles spare parts company SG for RM6 million. This acquisition represents a strategic expansion for Solid Automotive into the broader automotive aftermarket parts industry. SG, a well-established player in the trading of genuine automotive parts, specializes in brands such as Perodua, Proton, and Nissan, with a customer base comprising over 300 spare parts shops.

The acquisition is anticipated to leverage SG's established distribution channels, providing Solid Automotive with a new growth avenue. This move aligns with the broader trend of the global e-commerce automotive aftermarket, which is expected to reach $30 billion by 2025 [1]. The growing demand for automotive components, driven by the increasing age of vehicles and a shift towards online purchases, is a key driver of this industry growth. Specifically, steering and suspension components are anticipated to dominate the market share, with control arms, coil springs, and bearings in high demand [1].

The acquisition of SG also positions Solid Automotive to capitalize on the growing popularity of third-party retailers, which are expected to account for the highest revenue share by 2025, reaching $29 billion [1]. These retailers, such as Amazon and eBay, are driving industry growth through their extensive customer bases and services like same-day delivery.

Additionally, the acquisition supports Solid Automotive's strategy of expanding its online presence. The direct-to-customer segment is projected to exhibit a Compound Annual Growth Rate (CAGR) of approximately 21 percent from 2018 to 2025, driven by high brand loyalty and effective service facilities [1]. By integrating SG's established distribution network, Solid Automotive can enhance its market visibility and service offerings.

The North America e-commerce automotive aftermarket is expected to grow at a rate of approximately 17 percent by 2025, thanks to a well-established internet infrastructure and the presence of prominent e-commerce leaders like Amazon [1]. The Asia Pacific region is also anticipated to contribute significantly to the industry's growth, with a substantial share of more than $9 billion, driven by the growth in the automobile industry and rising internet penetration [1].

Prominent participants in the e-commerce automotive aftermarket include Napa Auto Parts, DENSO Corp., Amazon, eBay, Auto Zone, and Advance Auto Parts. These players often employ partnerships and collaborations with online aftermarket suppliers to enhance their market presence, as seen in Hella Group's collaboration with iParts.pl in 2016 [1].

In conclusion, Solid Automotive Bhd's acquisition of SG is a strategic move that positions the company to benefit from the growing e-commerce automotive aftermarket. By leveraging SG's established distribution channels and aligning with broader industry trends, Solid Automotive is poised to capture a significant share of this lucrative market.

References:
[1] https://www.tirereview.com/e-commerce-automotive-aftermarket-hit-30b-2025/