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North American HVAC Components Aftermarket
Frost & Sullivan, November 2008
This report outlines manufacturer-level or direct-import level to the first level of distribution unit shipments, prices, and revenues for the North American HVAC aftermarket for the base year 2008, with forecasts for each product line through 2015. Analyses of market drivers and restraints, distribution channels and market shares are also provided.
The Frost & Sullivan research titled North American HVAC Aftermarket provides extensive research on manufacturer level or direct-import level sales forecasts, industry challenges, market drivers and restraints, trends by product type, pricing analysis, distribution channel analysis, and market share analysis. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: compressors, condensers, heater cores, evaporators, and radiators.
Market Overview
Long-term Revenue Growth in Condensers and Radiators to Help Partially Inhibit HVAC Market Decline
With low margins, commoditization, liquidity issues, bankruptcies, and budget cuts clouding the North American heating, ventilating, and air-conditioning (HVAC) aftermarket scenario, fierce price competition is making it difficult for domestic participants to sustain their market positions. Under such conditions, product differentiation will play a crucial role in offsetting commoditization. "While compressors are expected to exert a downward pressure on prices in the North American HVAC aftermarket, other components such as radiators, condensers, and heater cores will be instrumental in offsetting the decline to some extent," says the analyst of this research service. "This is because competition is more intense in the case of compressors and the price of a remanufactured product is as competitive as a new, imported part." Radiators and condensers may make an early entry into the replacement market ahead of other HVAC components, as they are more prone to damage in the event of a collision. Besides, the coolant used in radiators has to be replaced every two years or after logging 30,000 miles, whichever comes first, to prevent corrosion. As vehicle owners observe economy measures and cut auto maintenance and servicing, radiators are expected to see faster wear and tear, requiring replacement.
Though vehicle air-conditioning and heating are not critical to the operation of the vehicle, the increasing average age of vehicles in North America is fueling growth in the aftermarket. The economic slowdown is forcing North Americans to keep their vehicles longer on the roads instead of procuring new ones. This factor is driving replacements, particularly in areas that have extreme weather conditions.
Taking into account the increasing commoditization and high availability of low-cost replacement parts, participants are left with no option but to absorb the costs of raw materials themselves and operate within tight margins. "The North American aftermarket is flooded with low-cost, imported products; this is causing price pressures on domestic market participants and forcing them to cut prices, resulting in declining revenues," explains the analyst. "Additionally, the prevailing credit crisis is forcing a number of vendors to sell their inventories at prices much lower than the market rate, further shrinking revenues." Participants must identify newer ways to differentiate their offerings, and formulate a superior value proposition for customers. This will enable them to attach a premium to their product prices and help overcome competition.
Product differentiation must be achieved by introducing new features or value-added services. In addition, the ability to address customer needs within short turnaround times will promote the establishment of trust and loyalty. Offering higher discounts, improved service levels, easy cataloging, and real-time inventory systems will ensure business progression.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Compressors
- Condensers
- Heater cores
- Evaporators
- Radiators
1. Executive Summary
2. Total North American HVAC Aftermarket
3. North American Compressors Aftermarket
4. North American Condensers Aftermarket
5. North American Heater Cores Aftermarket
6. North American Evaporators Aftermarket
7. North American Radiators Aftermarket
8. Key to Abbreviations
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