MOUNTAIN VIEW, Calif.Manufacturer-level brake pad sales across the U.S. and Canada exceeded 89 million units in 2013, according to market research firm Frost & Sullivan Inc.
The company, in its North American Brake Pads and Shoes Aftermarket study, predicts rising average vehicle agecurrently at 10.4 years in the U.S.and higher prices for new products entering the aftermarket will increase brake pad revenues by up to 4.3 percent annually through 2019, totaling more than $2.1 billion in revenue.
The report claims brake pads in the good segmentdefined as those without a shim, lowest grade of friction materials and limited warrantyrepresented about 15 percent of manufacturer revenues in 2012. Premature replacement at 12,000 miles is causing demand for these products to drop sharply at the installer level, the company said.
Pads in the better segmentdefined as those including a shim plus hardware and higher grade of friction materialsrepresented about 43 percent of manufacturer revenues, while pads in the best categorythose including a molded shim, platform-specific friction materials and limited lifetime warrantymade up 42 percent of manufacturer revenues.
Ceramic brake pads represented about 60 percent of total industry revenues in 2013, with semi-metallic parts making up 33 percent. Non-asbestos organic NAO pads made up 6 percent, according to Frost & Sullivan.
While 56 percent of manufacturer-level sales came from warehouse distributors and programmed distribution groups, auto parts retailers are becoming the fastest growing channel, accounting for 29 percent of manufacturer-level sales, due to retailers' two-step structure and low prices.
Car dealerships made up about 12 percent of revenues but are experiencing growth in their brakes business as more aftermarket parts and tiered pricing are made available to consumers, according to Frost & Sullivan.
Manufacturer brake pad brands, which account for 43 percent of the market, will continue to face tough competition from private labels and the need to develop new copper-free brake pads to comply with Better Brakes legislation taking effect by 2021 in the U.S., the report said.
Rising raw materials costs, new product development and the weak U.S. dollar will drive brake pad prices higher and generate revenue growth for manufacturers, the report predicted, noting that the average price across product lines from manufacturer to distributor, and adjusting for rebates and discounts, was about $17 per pad set in 2012.