MOUNTAIN VIEW, Calif.—``Poised for steady growth.'' That's the prediction for the overall North American aftermarket for automotive chemical, filter, tire and motor oil products, based on research by Frost & Sullivan, an international marketing consulting firm based in Mountain View.
While that segment faces ``intense competition and high margins,'' the firm expects manufacturer revenues to grow 2.3 percent annually through 2002.
The tire aftermarket is the largest revenue contributor, accounting for an estimated 59.1 percent, Frost & Sullivan said.
But the market for automotive chemicals is expected to show the most growth, with a calculated compound annual growth rate of 2.9 percent (1995 through 2002). Motor oil—with an expected annual growth rate of 1.6 percent—may show the least growth.
The company said competition is expected to become more intense in most areas as environmental regulations multiply original equipment manufacturer requirements.
Automotive analyst Doug Stein said ``retailers and manufacturers who wish to survive in these markets are going to have to be creative at all levels, from product engineering and design to product merchandising and disposal.''
Television, radio and motor sports events are expected to remain the primary mediums for establishing product differentiation, brand recognition and brand loyalty, he said.
More than 75 aftermarket firms, including 15 rubber companies, participated in the analysis.
Not so rosy is Frost & Sullivan's forecast for the undercarriage component market, which it expects to remain flat through 2002.
The company made its prediction of zero annual growth in overall sales revenues after analyzing five market segments: steering systems, drivetrain systems, brake systems, suspension system parts and ride control parts. It examined the competitive market situation in terms of manufacturer revenues, unit-pricing and shipments; market and technological trends and the dynamics of the OEM supply market.
It said three market segments—brakes, suspensions and ride control—show negative growth, offsetting the negligible growth expected with steering and drive train-components.
Unit prices are projected to decline, said automotive analyst Jean Cardenas, because ``OEMs are likely to continue pressuring suppliers for lower prices in an effort to trim new-vehicle productions costs, and global sourcing will open the North American supply industry to cheaper parts.''
However, some industry members said they believe the market has some growth potential, citing greater use of electronics to control and integrate vehicle systems. That would allow suppliers to reposition existing products, seek broader OEM application of technologies and slow down the decline in unit prices of components.
More than 50 companies participated in that study.
Frost & Sullivan monitors the ground transportation industry for market trends, market measurements and strategies.