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The Changing Face of the North American Automotive Remanufacturing IndustryPublished by: Frost & Sullivan Published: Feb. 18, 2008 - 105 Pages Table of Contents
AbstractThis Frost & Sullivan research service titled The Changing Face of the North American Automotive Remanufacturing Industry provides unit shipment and revenue forecasts, unit shipment and revenue shares by product type, competitive analysis, distribution channel analysis, and key market trends of selected remanufactured product categories, among others. In this research, Frost & Sullivan's expert analysts thoroughly examine the remanufactured products for light vehicles.This analysis is available through our Automotive & Transportation Growth Partnership Services program. With this program, clients receive industry-leading market research such as this, along with technical and econometric data and many interactive features including Analyst Inquiry Time and Client Councils. Market Overview Increasing Price Pressures Compel Automotive Remanufacturers to Strategically Market their Most Profitable Products The easy availability of new, salvage, and even rebuilt parts has put a spanner in the works of the North American automotive remanufacturing industry. The glut of choices has eaten into the market for remanufactured engines, transmissions, clutches, CV driveaxles, and fuel injectors. Remanufacturers of these products have not been able to recover their high production costs despite an increase in their prices. Prices have assumed greater significance with an escalation in commoditization and threat from low-priced offshore products. Moreover, due to the lack of qualified technicians in the aftermarket, end users are likely to gravitate toward the original equipment market. To stay afloat in such a challenging market, remanufacturers need to identify and meet market demand by competitively pricing the most needed stock keeping units (SKUs). Aftermarket participants may get a respite from the challenge posed by offshore products due to the continued inconsistencies in metallurgical and heat treatments, which cause the parts to fail prematurely. Moreover, their longer delivery time and domestic products’ improving technological sophistication are expected to curb the threat from foreign products. In addition, remanufacturers could shore up their revenues by marketing their products’ numerous advantages over new parts. For instance, remanufactured parts are available for a wide range of products, often have broader application coverage than what is available as new parts, and offer environmental benefits because they are recycled. Remanufacturers’ competitively priced, durable, and reliable parts for older and later model vehicles have helped them cement their position in product categories such as engine control unit (ECU) and rack and pinion steering gear. Technological Advances and Lower Prices to Drive Uptake of Remanufactured Parts "Due to the rising influence of mechatronics, remanufacturers are investing heavily in R&D to deliver products on time and identify the parts and technologies that will drive future growth," says the analyst of this research service. They will also have to start building remanufactured electric power steering (EPS) rack and pinions, seeing how they are being increasingly installed in newer vehicle models. However, hydraulic power steering (HPS) rack and pinions will continue to account for the majority of aftermarket sales. Meanwhile, the aftermarket for diesel engines is expected to outstrip that of gasoline engines. Considering just 2 to 3 percent of North American vehicles were equipped with diesel engines in 2006, there is plenty of scope to expand the diesel vehicle population, which will, in turn, generate more replacement opportunities in the region. "Remanufactured ECUs will continue to dominate the replacement demand in the aftermarket because of the large difference in price between new and remanufactured ECUs," notes the analyst. "Remanufactured ECUs are priced in the $40 to $150 range, while new ECUs may cost $600 to $800. A technology that is likely to be phased out in the remanufactured market is manual transmissions. This is mainly due to the growing dominance of automatic transmissions at the OE level, which is expected to drive the demand for remanufactured automatic transmissions in the aftermarket. Other products that will stand out in the aftermarket in the next five to seven years include remanufactured starters and alternators because of a higher price difference with new parts and carrying a competitive, sometimes lifetime, warranty. Get Full Details About This Report >> |
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