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North American Light Truck Running Board and Step AftermarketPublished by: Frost & Sullivan Published: Feb. 27, 2007 Table of Contents
AbstractThis Frost & Sullivan research service titled North American Light Truck Running Board and Step Aftermarket provides a detailed analysis of this aftermarket, which includes major product types, distribution flow, and unit shipment and revenue forecasts. It provides the revenues by product type, geographic region, and as a percent of market share and also includes extensive pricing, demand, and competitive analyses.Market Overview Increasing OEM Competition Demands Greater Innovation Market consolidation at the manufacturer and distributor level has given rise to intense competition in the North American light truck running board and step aftermarket and resulted in the top three participants controlling nearly 50 percent of the market share. This trend is likely to continue throughout the forecast period (2006-2012). Competition in the market is expected to intensify due to other factors such as the growing participation of offshore manufacturers. Low entry barriers to the light truck running board and step aftermarket allow these manufacturers in the developing world to sell directly to warehouse distributors (WDs), retailers, and end users in the United States and Canada. The effect of this trend on North American manufacturers is twofold: reduced profit margins and weakened aftermarket brand value. Original equipment manufacturers (OEMs) are also increasingly entering the light truck running board and step aftermarket. This, coupled with product maturity and commoditization, is placing severe pressure on aftermarket manufacturers to find ways to differentiate their products and develop unique running boards and tubular steps. "To combat the impact of OEMs, traditional aftermarket manufacturers need to develop and improve tooling, mold-making, and painting techniques as well as experiment with alternative materials to reduce costs and enhance functionality, appearance, and durability," says Rahul Ganju, Frost & Sullivan Research Analyst. Along with implementing newer and more sophisticated manufacturing technologies and increasing product reliability, aftermarket manufacturers also face the challenge of reducing costs. Pricing Pressures and Declining Profit Margins Create Challenging Situation for Aftermarket Manufacturers Overall, the North American light truck running board and step aftermarket is mature and its revenue potential is projected to decline over the forecast period. The aftermarket is also highly fragmented and the price pressures on it are considerable. These pressures are a result of fierce competition from aftermarket participants as well as OEMs and consistently rising prices of raw materials. Offshore manufacturers are taking advantage of market innovators’ investments in technology and product design and developing low-cost products that are eating into the share of traditional aftermarket manufacturers, which are facing cuts in research and development spending. Moreover, despite the rising raw material costs, most market participants are not increasing their prices proportionately and this is driving down profit margins. "In such a situation, price becomes the main differentiating factor for price-sensitive end users," says the analyst. "The challenge for aftermarket manufacturers is to offset price degradation in order to remain competitive and to avoid becoming a victim of price competition." Strategies focused on better quality, strong distribution, and superior customer service are becoming increasingly essential to cope with pricing pressures and the resulting low profit margins in the traditional aftermarket. Get Full Details About This Report >> |
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