North American Collision Electrical and Mechanical Replacement Component Aftermarket

SUMMARY

Insurance Companies Use their Clout to Reduce Parts Costs

Repair shops face a challenging task ahead as they compete to win the most lucrative collision repair jobs. This has become increasingly difficult; with insurance companies having a huge influence on vehicle owners' decision to undertake a comprehensive and expensive repair job, more so given the rising premium rates. The risk potential of being hit with a premium increase following an accident has many vehicle owners refraining from reporting collisions to the insurance company, opting not to repair at all or selecting a more basic repair job and paying out of their own pocket. With increasing frequency, insurance companies are specifying lower-cost aftermarket parts which can range 15 to 45 percent below original equipment (OE) component prices. This has left OE component manufacturers scrambling as this widespread practice has started to severely impact their unit shipments and revenues.

This Frost & Sullivan research service examines the North American electrical and mechanical collision replacement parts aftermarket which includes radiators, condensers and exterior lighting components. It also discusses the various market trends and opportunities while providing in-depth analysis of market share, revenue forecasts, market drivers and restraints. Revenue projections and unit shipments help participants in targeting high growth areas for maximum return on investment.

Larger and more Expensive Vehicle Mix Drives Up Repair Costs

By 2012, the light truck and luxury vehicle categories are anticipated to grow by 6.0 percent to represent approximately 56.0 percent of the total in-use vehicle population. "This is significant to the collision industry since vehicles in this group are larger, more expensive, and typically have more advanced technologies and features," says the analyst of this research service. "Also, the increased size and weight, and engine power of luxury and light truck vehicles tend to cause greater damage during a collision, contributing to higher repair costs."

Collision Repair Component Revenues Show Significant Increase

Despite a decline in the number of reported collisions and repair jobs, revenues in the collision repair aftermarket are expected to grow from $1.28 billion in 2004 to $1.60 billion 2011. In 2004, the lighting category contributed 87.0 percent of the revenues to the mechanical and electrical collision repair segment. For the overall collision repair market revenues are likely to witness an increase of 4 to 5 percent annually, almost double the rate for the majority of wear replacement components, which have stabilized due longer lasting materials and better design.

"Going forward, repair shops will have to equip themselves with the necessary information to generate more cost competitive quotations in order to capture more repair jobs and capitalize on the rising average dollar value of jobs," concludes the analyst.

TABLE OF CONTENTS

• 1. Executive Summary
  • 1. Market Overview
    • 1. Introduction
• 2. Total North American Mechanical and Electrical Collision Replacement Aftermarket
  • 1. Market Overview and Definitions
    • 1. Market Overview and Definitions
    • 2. Industry Challenges
    • 3. Market Engineering Analysis
  • 2. Market Drivers and Restraints
    • 1. Market Drivers
      • a. Rise in Number of Vehicles in Use Increases the Probability of Collisions and Supports Unit Shipment Growth
    • 2. Market Drivers Continued
      • a. Concentration of Population in Urban Areas Bolsters Collision Part Unit Shipments
      • b. Rising Miles/Time Spent in Vehicles Increases Probability of Crashes, Supporting Rise in Unit Shipments of Body Panels
      • c. Rising Population Increases Number of Drivers in High-Risk Age Categories
      • d. Rise in Number External Stimuli that Distract Drivers Contributes to the Rise in Number of Collisions
    • 3. Market Drivers Continued
      • a. Continued Use of Alcohol and Drugs Amongst Drivers Is a Strong Factor Behind Rising Collision Rates in North America
      • b. Excessive Speed Boost Probability of Collisions and Increases Repair Costs
      • c. Increased Variation in Weather Patterns and Catastrophic Events throughout North America Contributes to an Increase in Collisions and Repair Claims
      • d. Larger more Costly Vehicle Mix Drives Repair Costs
      • e. Sleeker Vehicle Design Trends have Tighter Tolerances between Components Increasing the Likelihood of Damage
      • f. Radiator Specific Drivers
    • 4. Market Restraints
      • a. More Active Role Being Taken by Law Enforcement Promotes Safer Driving
      • b. Vehicle Manufacturers Include More Safety Features in New Vehicles
    • 5. Market Restraints Continued
      • a. Insurance Companies Use Their Clout to Reduce Parts Costs
      • b. Declines in body Shops and Body Shop Personnel Are a Potential Hindrance to Industry Growth
      • c. Shift by Original Equipment Manufacturers and Aftermarket Manufacturers to All Aluminum Radiators Reduces Replacement Rates
      • d. Influx of Low Cost Alternative Radiators Restrains Revenue Opportunities
  • 3. Market Forecasts and Trends
    • 1. Revenue and Unit Shipment Forecasts
    • 2. Trends by Geographic Region
    • 3. Trends by Product Category
    • 4. Collision Demand Analysis
    • 5. Pricing Analysis
  • 4. Competitive Analysis
    • 1. Competitive Structure
    • 2. Distribution Channel Analysis
  • 5. Frost & Sullivan Awards
    • 1. Frost & Sullivan Market Leadership Award
    • 2. Frost & Sullivan Business Development Strategy Leadership Award
    • 3. Frost & Sullivan Competitive Strategy Award
• 3. Condenser Aftermarket
  • 1. Market Overview
    • 1. Market Overview and Definitions
    • 2. Market Engineering Analysis
  • 2. Forecasts and Trends
    • 1. Revenue and Unit Shipment Forecasts
    • 2. Collision Market Analysis
    • 3. Demand Analysis
    • 4. Pricing Trend Analysis
  • 3. Competitive Analysis
    • 1. Product Analysis
    • 2. Distribution Channel Analysis
    • 3. Market Share Analysis
• 4. Radiator Aftermarket
  • 1. Market Overview
    • 1. Market Overview and Definitions
    • 2. Market Engineering Analysis
  • 2. Forecasts and Trends
    • 1. Revenue and Unit Shipment Forecasts
    • 2. Trends by Product
    • 3. Demand Analysis
    • 4. Pricing Trend Analysis
  • 3. Market and Technology Trends
    • 1. Market Trends
    • 2. Technology Trends
  • 4. Competitive Analysis
    • 1. Product Analysis
    • 2. Distribution Channel Analysis
    • 3. Market Share Analysis
• 5. Exterior Lighting Aftermarket
  • 1. Market Overview
    • 1. Market Overview and Definitions
    • 2. Market Engineering Analysis
  • 2. Forecasts and Trends
    • 1. Revenue and Unit Shipment Forecasts
    • 2. Trends by Product
    • 3. Demand Analysis
    • 4. Pricing Trend Analysis
  • 3. Market & Technology Trends
    • 1. Market Trends
    • 2. Technology Trends
  • 4. Competitive Analysis
    • 1. Product Analysis
    • 2. Distribution Channel Analysis
    • 3. Market Share Analysis
• 6. Appendix
  • 1. Terms and Definitions
    • 1. List of Abbreviations
  • 2. Equations
    • 1. Conversion Equations
    • 2. Compound Annual Growth Rate
    • 3. Currency Exchange Rates
• 7. Decision Support Database
  • 1. Decision Support Databases
    • 1. Number of Dealerships by State
    • 2. Personal Disposable Income
    • 3. Number of Automotive Technicians
    • 4. Number of Automotive Retailers
    • 5. Number of Motor Vehicle Wholesalers

List Of Figures

Chapter 2

• Total Mechanical/Electrical Collision Aftermarket: Impact of Top Six Industry Challenges (North America), 2004-2010
• Total Mechanical/Electrical Collision Aftermarket: Unit Shipment and Price Drivers (North America), 2005-2011
• Total Mechanical/Electrical Collision Aftermarket: Light Vehicles in Use (North America), 2001-2011
• Total Mechanical/Electrical Collision Aftermarket: Population Per Vehicle (North America), 1996-2004
• Total Mechanical/Electrical Collision Aftermarket: Average Age of Light Vehicles in Use (North America), 2001-2011
• Total Mechanical/Electrical Collision Aftermarket: Average Annual Use Per Light Vehicle (North America), 2001-2011
• Total Collision Replacement Body Panel Aftermarket: Vehicle Parc Shares by Vehicle Type (North America), 1991-2012
• Total Mechanical/Electrical Collision Aftermarket: Radiator Specific Unit Shipment and Price Drivers (North America), 2005-2011
• Total Mechanical/Electrical Collision Aftermarket: Unit Shipment and Price Restraints (North America), 2005-2011
• Total Mechanical/Electrical Collision Aftermarket: Radiator Specific Unit Shipment and Price Restraints (North America), 2005-2011
• Total Mechanical/Electrical Collision Aftermarket: Unit Shipment and Revenue Forecasts (North America), 2001-2011
• Total Mechanical/Electrical Collision Aftermarket: Revenues by Geographic Region (North America), 2001-2011
• Total Mechanical/Electrical Collision Aftermarket: Revenues by Mechanical/Electrical Category (North America), 2001-2011
• Total Mechanical/Electrical Collision Aftermarket: Revenues by Collision versus Wear (North America), 2004
• Total Mechanical/Electrical Collision Aftermarket: Average Manufacturer Price Forecast (North America), 2001-2011
• Exterior Lighting Aftermarket: Price Difference Collision to Wear (North America), 2004

Chapter 3

• Condenser Aftermarket: Unit Shipment and Revenue Forecast (North America), 2001-2011
• Condenser Aftermarket: Percent of Unit Shipments Collision vs. Wear (North America), 2001-2011
• Condenser Aftermarket: Percent of Revenues Collision vs. Wear (North America), 2001-2011
• Condenser Aftermarket: Average Manufacturer Price Forecast (North America), 2001-2011
• Condenser Aftermarket: Product Analysis (North America), 2004
• Condenser Aftermarket: Revenue Shares of Major Market Participants (North America), 2004

Chapter 4

• Radiator Aftermarket: Unit Shipment and Revenue Forecasts (North America), 2001-2011
• Radiator Aftermarket: Percent of Revenues Collision versus Wear (North America), 2001-2011
• Radiator Aftermarket: Aluminum versus Copper/Brass (North America), 2004
• Radiator Aftermarket: Average Manufacturer Price Forecasts (North America), 2001-2011
• Radiator Aftermarket: Price Difference Collision to Wear (North America), 2004
• Radiator Aftermarket: Product Analysis (North America), 2004
• Radiator Aftermarket: Percent of Revenues by Distribution Channel (North America), 2004
• Radiator Aftermarket: Revenue Shares of Major Market Participants (North America), 2004

Chapter 5

• Exterior Lighting Aftermarket: Unit Shipment and Revenue Forecasts (North America), 2001-2011
• Exterior Lighting Aftermarket: Percent of Unit Shipments by Product Type (North America), 2001-2011
• Exterior Lighting Aftermarket: Light Vehicles in Use by Geographic Region (North America), 2001-2011
• Exterior Lighting Aftermarket: Lighting Component Replacement Rates Collision versus Wear (North America), 2004
• Exterior Lighting Aftermarket: Lighting Component Percentage of Unit Shipments Collision versus Wear (North America), 2004
• Exterior Lighting Aftermarket: Lighting Component Percentage of Revenues Collision versus Wear (North America), 2004
• Exterior Lighting Aftermarket: Average Manufacturer Price Forecast (North America), 2001-2011
• Exterior Lighting Aftermarket: Product Analysis (North America), 2004
• Exterior Lighting Aftermarket: Revenue Shares of Major Market Participants (North America), 2004

Chapter 6

• Electrical/Mechanical Collision Replacement Aftermarket: Exchange Rate (Canada:U.S.), 2003-2005
• Electrical/Mechanical Collision Replacement Aftermarket Market: Exchange Rate (Europe:U.S.), 2003-2005
• Electrical/Mechanical Collision Replacement Aftermarket Market: Exchange Rate (Japan:U.S.), 2003-2005
• Electrical/Mechanical Collision Replacement Aftermarket Market: Exchange Rate (Mexico:U.S.), 2003-2005
• Electrical/Mechanical Collision Replacement Aftermarket Market: Exchange Rate (UK:U.S.), 2003-2005