Palo Alto, CA – February 25, 2008 – The North American steering system hard parts aftermarket continues to demonstrate modest growth due to the introduction of new vehicles with variable chassis features.
Since steering parts perform multiple functions throughout a vehicle, the rise in the
total number of steering parts exceeds the increase in the number of vehicle models. This factor contributes significantly to the aftermarket’s growth, as distributors must now stock more parts to meet demand.
New analysis from Frost & Sullivan, North American Steering System Hard Parts Aftermarket, finds that the market earned revenues of $387.5 million in 2006 and estimates this to reach 416.1 million in 2013.
“Light trucks using recirculating-ball steering gears drive the sales of conventional steering parts,” notes Frost & Sullivan Industry Manager Avijit Ghosh. “Tie rods installed in new vehicle models are expected to ensure the growth of the aftermarket in the medium to long term.”
With regard to the product segments, ball joints and tie rods represent the two largest segments of the steering system hard parts aftermarket. Despite early equal unit shipment sizes, ball joints hold a higher share of total
revenues due to their higher cost. The unit shipment and revenue shares for both segments will likely gradually increase over the forecast period as a result of declines in the idler/pitman arm and center/drag link market
segments.
However, premium lines will gradually lose market share to economy line products. This loss stems from the low labor costs in Asian countries that enable manufacturers to inexpensively produce the most popular and fastest
moving part numbers for resale in the North American aftermarket. Given the minimal difference in quality between North American premium parts and imported economy-line parts, the aftermarket is less willing to pay the
higher price for steering components manufactured in North America.
“Furthermore, original equipment (OE) steering parts have consistently improved in durability and reliability over the past few years,” says Ghosh. “This has lowered replacement rates, thereby resulting in lower
aftermarket unit shipment demand.”
North American manufacturers need to start actively supplying economy line products to mitigate the competition from Asian products. Manufacturers that offer a full line of chassis parts will have a better opportunity to sell products to large customers that have grown from consolidation.
Success in this market requires comprehensive market coverage and supplying through key traditional and retail customers.
For more information about Frost & Sullivan, visit http://www.frost.com.