Total North American Brake System Parts Aftermarket

SUMMARY

Competition from Overseas Suppliers Threatens Cost Structure

As growing raw material prices force brake component manufacturers to raise prices, there has been a steady influx of brake system parts from overseas countries, especially China. This entry of overseas suppliers is threatening the cost structure of domestic participants, since lower-labor costs are allowing offshore suppliers to sell brake components at significantly lower prices than domestic companies. In response to this challenge, while some domestic manufacturers are forming joint ventures with importers and outsourcing their production from low-cost overseas factories, others are either maintaining prices at current levels or raising prices, in order to compete exclusively in the high-priced premium segment.

This Frost & Sullivan research service analyses the total North American brake system parts aftermarket. The study has been segmented into friction parts, hydraulic parts, and rotors and drums and includes detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

Demand for Premium Parts and Remanufactured Components offer Opportunities for Domestic Suppliers

In the face of increasing competition, North American brake pad and rotor manufacturers are producing better quality components that have a longer service life. This is helping them service the lucrative niche market comprising of custom vehicle owners, racing enthusiasts, and fleet managers, which is growing at a faster rate than the aftermarket as a whole. Also, with the growing installer preference for premium brake components over economy-level components, unit shipments of high-priced ceramic brake pads and shoes have outpaced that of lower-priced formulas and this trend is expected to replicate itself in the roots and drums segment in the medium to long term.

With remanufactured brake system components finding greater acceptance in production lines, independent rebuilders are profiting from remanufacturing or rebuilding used brake system parts and selling them back to the aftermarket. "The proliferation of remanufactured or rebuilt components offers customers the opportunity to save money on their purchases as these components costs less than brand new parts," says the analyst of this research service. "This is particularly true for brake shoes, master cylinders, and calipers where rebuilders can supply the aftermarket's needs at a price lower than that of the manufacturers."

Continuing Growth in Vehicle Sales set to Boost Long-term Demand for Brake Systems

The continued growth in the vehicle population of the United States and Canada is expected to have a positive impact on the demand for brake system parts. The vehicle parc is growing at a rate of one to two percent annually and this is expected to contribute to continual demand for friction parts, brake pads, rotors, and calipers. Additionally the average age of vehicles in service continues to increase with the 2004 average age of passenger vehicles standing at 8.68 years. This particularly augurs well for future demand, as older vehicles tend to require more preventive maintenance than newer models.

Brake pads and rotors are the most commonly replaced parts in the aftermarket and the two accounted for a combined revenue share of 74.9 percent in 2004. "Price remains a key competitive factor in the North American brake system parts aftermarket because of rising costs and increasing competition from overseas manufacturers," says the analyst. "Installers wield a great deal of power in the aftermarket and to ensure their success in the aftermarket suppliers must identify installers' needs and design products and services that gain their trust and loyalty."

TABLE OF CONTENTS

• 1. Executive Summary
  • 1. Summary of Major Findings
    • 1. Introduction
• 2. Total North American Brake System Parts Aftermarket
  • 1. Overview and Definitions
    • 1. Market Overview and Definitions
    • 2. Market Engineering Analysis
  • 2. Drivers and Restraints
    • 1. Market Drivers
      • a. Unit Shipment Drivers
      • b. Price Drivers
    • 2. Market Restraints
      • a. Unit Shipment Restraints
      • b. Price Restraints
  • 3. Quantitative Analysis
    • 1. Unit Shipment and Revenue Forecasts
    • 2. Trends by Geographic Region
    • 3. Trends by Product Type
    • 4. Demand Analysis
    • 5. Pricing Analysis and Trends
  • 4. Competitive Analysis
    • 1. Competitive Structure
    • 2. Distribution Channel Analysis
    • 3. Divestitures Acquisitions and Competitive Changes
    • 4. Product Analysis
    • 5. Market and Technology Trends
• 3. Appendix
  • 1. Acronyms
    • 1. Acronyms and Abbreviations
  • 2. Equations
    • 1. Conversion Equations
    • 2. Compound Annual Growth Rate
    • 3. Currency Exchange Rates
• 4. Decision Support Database
  • 1. Decision Support Database
    • 1. Automotive Retailers
    • 2. Repair Shops
    • 3. Automotive Dealers
    • 4. Automotive Technicians
    • 5. Motor Vehicle Wholesalers

List Of Figures

Chapter 2

• Total Brake Components Aftermarket: Market Drivers Ranked in Order of Impact (North America), 2005-2011
• Total Brake Components Aftermarket: Market Restraints Ranked in Order of Impact (North America), 2005-2011
• Total Brake Components Aftermarket: Unit Shipment and Revenue Forecasts (North America), 2001-2011
• Total Brake Components Aftermarket: Percent of Revenues by Geographic Region (North America), 2001-2011
• Total Brake Components Aftermarket: Percent of Revenues by Product Type (North America), 2001-2011
• Total Brake Components Aftermarket: Light Vehicles in Use by Geographic Region and Vehicle Type (North America), 2001-2011
• Total Brake Components Aftermarket: Light Vehicles Sales by Vehicle Type (North America), 2001-2011
• Total Brake Components Aftermarket: Average Annual Use per Light Vehicle (United States), 2001-2011
• Total Brake Components Aftermarket: Average Age of Light Vehicles in Use (North America), 2001-2011
• Total Brake Components Aftermarket: Pricing Analysis (North America), 2001-2011
• Total Brake Components Aftermarket: Revenue Share by Distribution Channel (North America), 2004
• Total Brake Components Aftermarket: Notable Divestitures, Acquisitions, and Competitive Changes (North America), 2001-2005

Chapter 3

• Total Brake Components Aftermarket: Exchange Rate (Canada: U.S.), 2003-2005
• Total Brake Components Aftermarket: Exchange Rate (Europe: U.S.), 2003-2005
• Total Brake Components Aftermarket: Exchange Rate (Japan: U.S.), 2003-2005
• Total Brake Components Aftermarket: Exchange Rate (Mexico: U.S.), 2003-2005
• Total Brake Components Aftermarket: Exchange Rate (UK: U.S.), 2003-2005