MOUNTAIN VIEW, Calif. (Dec. 18, 2013) — The size of the aftermarket in North America for engine control units (ECUs) will grow about 3.2 percent a year through 2019, according to a new study by market researchers Frost & Sullivan Inc., although unit growth is not expected to keep pace with revenue growth.
The Mountain View-based research group credits the increasing number of older vehicles as the catalyst for generating replacement opportunities for the ECU aftermarket in North America. This in turn escalates raw material prices and currency exchange fluctuations boost prices for new and remanufactured ECUs and spur market revenue.
In its study, Opportunity Analysis of Engine Control Units, Frost & Sullivan puts the value of the market in 2012 at $580.1 million and estimates this to reach $721.3 million in 2019.
“The need to comply with stricter emission and fuel economy standards makes ECUs complex,” said Frost & Sullivan Automotive and Transportation Research Manager Stephen Spivey.
“As sophisticated products enter the aftermarket and more foreign nameplate vehicles are serviced, the prices of ECUs will go up, thereby adding to manufacturers’ margins.”
While manufacturer-level revenue is set to grow during the period, Frost & Sullivan cautions restraints to growth remain, including rapid technological advances that improve ECU quality and longer life. At the same time, some consumers ignore the symptoms of a faulty ECU due to the associated high replacement costs, thereby slowing unit sales. The availability of cheap, low-quality Asian imports further curbs market development in the region.
Independent suppliers and repairers will lose their market share to auto dealerships in the OE service channel, Frost & Sullivan said, due to their lack of training, especially in terms of ECU failure diagnosis.
“Favorable pricing will be crucial for manufacturers to revive demand for remanufactured ECUs and expand their footprint,” Mr. Spivey said.
“Aftermarket suppliers must also build strong partnerships with original equipment manufacturers (OEMs) and foreign participants over the medium- to long-term to overcome technological challenges, share key proprietary information, leverage the installed base of different OEMs, and satisfy the aftermarket’s all-makes-and-models coverage benchmark.”
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