SOURCE: Freedonia Group, Inc.

January 10, 2007 12:04 ET

Automotive Aftermarket in North America to Reach $58.7 Billion in 2010

CLEVELAND, OH -- (MARKET WIRE) -- January 10, 2007 -- The aftermarket in North America for light vehicle components and parts is projected to increase at an annual rate of 3.2 percent, reaching $58.7 billion in 2010. While this rate is a slight improvement over the industry's recent performance, some segments of the market, such as electronics, will enjoy much faster growth. The parts aftermarket's current moderate revenue growth results from improvements in light vehicle reliability and durability. These improvements have neutralized traditional growth factors such as the expanding light vehicle population or increases in miles traveled per year. However, opportunities to sell more parts should arise as more vehicles reach prime aftermarket service age. Nonetheless, aftermarket parts sourced from China will apply increasing downward pressure on parts prices, as powerful aftermarket retailers and wholesalers demand increasing shares of supplier margins and seek to pass more value on to consumers. These and other trends are presented in "Automotive Aftermarket in North America," a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

The largest product category in the aftermarket will continue to be mechanical products, which includes non-electrical/electronic engine hard parts; and chassis, drivetrain and suspension parts and components. However, growth will be limited by the improved quality of these already highly durable products. Electronic parts and components will witness the fastest annual growth, a direct result of the continued transformation of the automobile from a mechanical machine with electronic enhancements into a software-driven device. Demand for electronic controls and modules will remain strong, despite continued quality increases, as more vehicle systems shift to electronics.

The dominance of professional service providers will continue to grow, with new vehicle dealers showing continued strength as they pursue additional shares in the lucrative parts and service market. General Motors' 2006 announcement of 5-year/100,000-mile powertrain warranties for its 2007 and later model year light vehicles will boost GM dealer service business significantly, for example. The do-it-yourself (DIY) segment will continue to decline in terms of its overall share of the market as vehicles become more difficult to diagnose and repair and as populations in the U.S. and Canada age.

Contact Information