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Strategic Analysis of the North American Linkage and Steering Parts Aftermarket
Frost & Sullivan, July 2010, Pages: 118
This is a powerpoint based research service. This research service provides strategic analysis of the North American linkage and steering parts aftermarket, with particular focus on ball joints, tie rods, control arms, idler/pitman arms, and center/drag links. Industry challenges that affect the market broadly are discussed. Key market drivers and restraints for linkage and steering parts at the total level are outlined. Unit shipment and revenue forecasts to 2016 are presented at the total level and product type wise. The competitive situation is comprehensively analyzed, pricing analysis, analysis of the distribution channel participants, and market share of manufacturers are presented.
This Frost & Sullivan research service titled Strategic Analysis of the North American Linkage and Steering Parts Aftermarket provides industry challenges, top market drivers and restraints, unit shipment and revenue forecasts to 2016 both at total level and product wise. The study analyses the competitive situation, distribution channels, and market share of manufacturers. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: ball joints, tie rods, control arms, idler and Pitman arms, and center and drag links.
Market Overview
Control Arms Offer Highest Potential in the North American Linkage and Steering Parts Aftermarket
In the North American linkage and steering parts aftermarket, the control arms segment is poised to offer the highest growth over the next 5-7 years, growing at a compound annual growth rate (CAGR) of 8.9 percent. The control arms segment occupied 27.5 percent in 2009; however, this share is expected to increase to 46.8 percent in 2016. Opportunities abound in this sector and manufacturers in this space must focus on this category to achieve top-line growth. The ball joint is a critical component of the control arm assembly. In the event of failure of the ball joint, the entire assembly needs to be replaced. Increased installation of integral design control arm assembly drives units and prices. Revenues for control arm assemblies will receive a boost as they are significantly more expensive than ball joints. Another factor spearheading growth in the market is the aging truck population, which increases the demand for tie rods. 'Tie rods have a higher wear rate in light trucks owing to higher mileage,' notes the analyst of this research service. 'Outer tie rods which occupy the larger portion of the market are more susceptible to failure than inner tie rods because they are exposed to greater wear and tear; this will drive overall growth.'
Although market prospects look upbeat, there are some challenges reining in market progression. Observations reveal that the lower-priced value line parts are taking away market share from the expensive premium line parts. This is contributing to declining revenues. The North American manufacturers directly outsource inexpensive parts from low-cost Asian countries such as China or Taiwan. These are marketed as value line parts in North America and are eroding market share from the premium line parts. Offshore products from Asia have questionable quality and if any North American manufacturer can offer better parts at comparable prices, market share gain is possible.
To gain market share, manufacturers need to improve stock keeping units (SKUs) coverage to cover more vehicle models. 'Products should be priced at least 50 percent lower than premium in the case of MOOG and maximum 30 percent higher than value line parts in the case of One Source, Raybestos Service Grade, OE brand or other private label parts,' says the analyst. 'Manufacturers should aim to decrease profit percent by product and upscale unit shipments to counter loss and ensure competitive pricing.'
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Ball joints
- Tie rods, control arms
- Idler & Pitman arms
- Center & drag link
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