Thinking of Buying an Automotive Parts Manufacturing Business in Australia? Here Are 3 Vital Questions to Ask
The Australian automotive parts and accessories manufacturing industry generated $4.97 billion in revenue in 2026, employing 12,212 workers across 1,126 enterprises.
Profit margins average 9.9%, with annual industry profits of $493 million. However, revenue has declined at an annualised 3.3% since 2008 due to rising import competition, global trade pressures, and the end of domestic car manufacturing.
Looking forward, the industry is projected to grow at 1.3% annually through 2031, supported by aftermarket demand, SUV and 4WD accessory growth, and opportunities in electric vehicle (EV) component manufacturing.
1. Is the Business Financially Resilient Amid Import Competition?
Why It Matters:
Imports account for more than $6.5 billion annually and continue to rise, particularly in commoditised parts like brakes and suspension systems.
Local manufacturers must increasingly compete by focusing on quality, customisation, and niche aftermarket parts rather than high-volume production.
What to Check:
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Revenue mix – Powertrain parts (37.5% of revenue) and chassis components (26.7%) remain key segments.
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Import exposure – Determine reliance on overseas suppliers versus in-house production.
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Cost pressures – Labour shortages have increased wage costs, while steel and aluminium prices remain volatile.
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Aftermarket demand – The average Australian vehicle age is 11.4 years, sustaining replacement parts sales.
2. Does the Business Have a Strong Market Position?
Why It Matters:
The industry is highly fragmented, with ARB being the largest player at just 8.9% market share.
Smaller manufacturers succeed by specialising in high-margin niches such as 4WD suspension, alloy wheels, or SUV accessories, where consumer willingness to pay a premium is strong.
What to Check:
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Brand strength & customer base – Established relationships with wholesalers, mechanics, or fleet operators.
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Product differentiation – Patented designs, premium accessories, or tailored solutions for off-road and recreational vehicles.
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Export strategy – The UAE and New Zealand are key growth markets, supported by free trade agreements.
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Location advantage – Nearly 80% of manufacturers are based in Victoria, NSW, and Queensland, close to large vehicle fleets.
3. Is the Business Positioned for the EV Transition and Future Growth?
Why It Matters:
The New Vehicle Efficiency Standard (2025) and rising EV adoption are reshaping demand away from traditional engine parts toward EV-compatible components.
Manufacturers that adapt early to electrification, automation, and sustainability trends will capture future growth opportunities.
What to Check:
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EV-ready production – Demand is rising for battery management systems, electric drivetrains, and lightweight alloys.
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Technology adoption – AI, 3D printing, and automation improve efficiency and quality control.
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Sustainability focus – Compliance with emissions regulations, use of green materials, and alignment with government incentives.
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Workforce readiness – Skills shortages are pushing up wages; businesses with strong training and retention programs will have an edge.
Ready to Invest in a Thriving Automotive Parts Manufacturing Business?
Despite strong competition from imports, Australia’s automotive parts sector remains supported by a growing aftermarket, consumer demand for customisation, and the EV transition.
Success depends on financial resilience, market positioning, and investment in innovation and sustainability.
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