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Strategic Analysis of the North American Starters and Alternators Aftermarket
Frost & Sullivan, Aug 2010, Pages: 83
This is a powerpoint based research service. This research service provides strategic analysis of the North American starters and alternators aftermarket. Industry challenges that affect the market broadly are discussed. Key market drivers and restraints for starters and alternators at the total level are outlined. Unit shipment and revenue forecasts to 2016 are presented at the total level and unit shipment and revenue breakdown by product type is provided. The competitive situation is comprehensively analyzed, analysis of the distribution channel participants, and market share of manufacturers are presented.
This research service titled Strategic Analysis of the North American Starters and Alternators Aftermarket provides unit shipments and revenues forecasts, pricing analysis, distribution channel analysis, and market share analysis. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: remanufactured and new starters and alternators.
Market Overview
Rising Number of Vehicles in the Prime Replacement Age Drives Unit Shipments
Starters and alternators are usually replaced when the vehicle is four to nine years old, with seven to nine years being the prime replacement age. As people are increasingly retaining their vehicles for longer periods, the number of vehicles in this age range is increasing, generating more replacement opportunities for the aftermarket. Apart from the rise in the average age of vehicles, the aftermarket will also get a boost from the higher number of vehicles in operation (VIO), as starters and alternators are non-discretionary replacement parts. The overall light vehicle population in North America is expected to grow by 16.2 million units between 2009 and 2016, an increase of 6.1 percent. Meanwhile, the overall light vehicle average age is forecast to rise by a compound annual growth rate of 0.6 percent from 2009 (9.55 years) to 2016 (9.98 years).
“The anticipated proliferation of import brand vehicles in operation also bodes well for the aftermarket, as starters and alternators for such vehicles are priced 10-20 percent higher than for domestic vehicles,” says the analyst of this research. “This is not only because they feature more advanced designs and include more components, but also because the cores are not readily available.” Aftermarket participants need to optimally tap into this revenue stream to compensate for the price declines brought about by the continuous industry consolidation, and increasing bargaining power of large aftermarket distributors, as manufacturers’ need to maintain contracts with these distributors since they generate close to 85 percent of the revenues. Manufacturers are therefore forced to reduce prices to retain large traditional warehouse distributor (WD) and retail accounts.
“In a market characterized by a constant increase in parts proliferation, distributors prefer to conduct business with manufacturers that can deliver all-makes-and-models coverage because it reduces the number of companies from which they must source to service their own customers,” notes the analyst. “Therefore, manufacturers should attempt to expand their offerings to offer full-line coverage to entice large distributors.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Remanufactured starters and alternators
- New starters and alternators
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