Market Analysis of the North American Class 4-8 Aftertreatment and Exhaust Aftermarket

Frost & Sullivan
August 28, 2009
134 Pages - SKU: MC2430637
License type:
Table of Contents Related Reports
Countries covered: North America

This Frost & Sullivan research service titled Market Analysis of the North American Class 4-8 Aftertreatment and Exhaust Aftermarket provides extensive research on manufacturer-level or direct import-level sales forecasts, demand analysis, industry challenges, opportunities, regulatory environment, market drivers and restraints, trends by product type, replacement rates, pricing analysis, distribution channel analysis, competitive structure, and key aftermarket supplier analysis. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: mufflers, exhaust pipes, gasoline catalytic converters, diesel oxidation catalyst (DOC), diesel particulate filters (DPF), diesel exhaust fluid (DEF), urea filters, sensors, and DPF cleaning service.

Market Overview

Rapidly Changing Regulatory Environment Establishes New Revenue Streams in the Class 4-8 Aftertreatment and Exhaust Aftermarket

The exhaust aftermarket has received a shot in the arm with the introduction of advanced exhaust and aftertreatment systems in the original equipment (OE) market. Aftertreatment components hold great attraction for commercial truck manufacturers, as they help them comply with the Environment Protection Agency (EPA) 2007 and 2010 regulations. The recent fuel-price volatility, availability of government tax credits and incentives, as well as higher environment consciousness are also stoking the growth of the retrofit market. Conventional products will continue to be in demand as it is crucial to replace damaged exhaust pipes and gasoline catalytic converters to comply with comprehensive emission limits, boosting the aftermarket for replacement components and related services. "What is noteworthy is that the compliance with the EPA 2010 regulations will create new revenue streams due to the higher uptake of products and services such as DEF and DPF cleaning," says the analyst of this research. "The increasing use of DOC and DPF, in combination with the selective catalyst reduction (SCR) technology will not just stretch the aftermarket’s service, maintenance, and logistics infrastructure but also offer revenue growth opportunities." DOCs and DPFs will gradually phase out certain exhaust components such as mufflers, which were traditionally used as silencers, and distributors will increasingly stock DOCs, DPFs, urea filters, and sensors.

With the introduction of new technologies, participants in the aftermarket will be compelled to develop the ability to efficiently service medium- and heavy-duty vehicles. Moreover, the increasing complexity of medium- and heavy-duty vehicles will heat up the competition between traditional aftermarket distributors and authorized dealers, as the latter will have easier access to manufacturers for all information and repair tools required for the maintenance of technologically advanced systems. "In such a scenario, knowledge management and technician training will emerge as opportunities for proper distribution and service," notes the analyst. "There will also be additional service and replacement opportunities, requiring aftermarket suppliers to develop long-term business plans and explore investment potential in services such as DEF refueling and DPF cleaning machines."

Survival in the aftertreatment and exhaust aftermarket will also hinge on significant investment in supply logistics as well as training and knowledge management. As the aftertreatment and exhaust aftermarket presents numerous business opportunities, the challenge for all market participants is to be proactively take advantage of the business opportunities in the maximum in a growing market. Though this will require significant investment in supply logistics as well as training and knowledge management, the current economic slowdown coupled with lack of financing resources is resulting in a lack of preparation, which is likely to restrict growth. Fleet owners are deferring the purchase of EPA 2010-compliant trucks and postponing retrofitting vehicles with new emission-reduction technologies. This is because currently, there are no regulations mandating the use of after-treatment technologies in old diesel trucks.

Further, the high cost of technologies and lack of nationwide incentives or a clear understanding of return on investment (ROI) on retrofit solutions is restricting certain fleets from making the initial investment. There is a need for concerted industry-wide partnerships to jumpstart the preparations and to gather expertise to efficiently service and maintain EPA 2010 compliant trucks. Effectively devised strategies, based on upcoming trends and market realities, will deliver higher chances of success in this emerging market. This is because even though there is a new and unique growth opportunity for the aftermarket, the pitfalls of poorly planned and strategies are huge irreversible. As emission regulations necessitate the use of expensive after-treatment technologies, participants should focus on manufacturing advanced, low-priced products that have higher replacement rates. They should create recurring revenue streams by retaining customers through offers of value-added services, customer loyalty programs, and better customer relationships. For long-term growth, they should look to gain expertise in sophisticated technologies, products, solutions, and processes to provide quick as well as low-cost service and maintenance for the new generation of EPA regulation-compliant trucks.


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