While long lasting OE installed parts impede the growth of the aftermarket, the adoption of inspection and maintenance programs in an increasing number of states will drive unit shipments. Further, the transition toward direct-fit components from universal components expects to expedite revenue generation for the exhaust aftermarket. Brand awareness remains low in the standard exhaust components aftermarket and consumers settle for what is available at a reasonable price.
"The performance exhaust segment, in contrast, is characterized by high levels of customer involvement and branding plays a key role in determining purchase decisions," says Frost & Sullivan Research Analyst Ratika Garg. "Thus, the performance segment holds enormous potential as the lack of technology standardization in this particular arena gives aftermarket manufacturers the liberty to introduce new features and induce greater product differentiation."
New analysis from Frost & Sullivan (automotive.frost.com), Market Analysis of the North American Exhaust Components Aftermarket, finds that market earned revenues of $769.1 million in 2008 and estimates this to reach $1.02 billion in 2015.
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The North American exhaust components aftermarket has witnessed a shift towards direct-fit components that translates into increased average prices and revenues.
"I have seen this trend more in certain product lines like mufflers and catalytic converters. Direct-fit components also adversely impact the unit shipments of exhaust pipes because direct-fit components come with the requisite tubing," says Garg. "In addition, there is a move towards integrated systems such as integrated exhaust manifolds, as well as cat-back systems that present new growth opportunities to aftermarket manufacturers."
At the installer level, direct-fit components offer an ease of installation and optimized productivity. A major cause of concern in the aftermarket remains the shortage of skilled technicians, which makes direct-fit components an easier alternative. Direct-fit components eliminate the need for cutting and welding and can simply be bolted on to a vehicle. Due to this advantage, direct-fit components are preferred to universal components even despite their higher price.
Although the quality of exhaust components at the OE level has improved a great deal, stringent emission regulations ensure that vehicle owners replace a catalytic converter or pipe when it is damaged. Besides, a larger number of consumers are more inclined towards keeping their vehicles longer, which bodes well for the exhaust components aftermarket. Nonetheless, compliance with emissions and noise regulations pose a huge challenge as variations in regulations at the federal, state, and even local levels complicate matters for manufacturers.
There are two sets of emission regulations followed by aftermarket manufacturers – one imposed by Environmental Protection Agency (EPA) and another imposed by California Air Resources Board (CARB). In order to compete effectively, aftermarket manufacturers are developing two different product lines, one for California, and one for the remaining 49 states. On one hand it raises their manufacturing costs, but on the other, it allows them to grow their customer base and rake in better revenues.
Aftermarket manufacturers of catalytic converters are hit worse by regulatory issues. They have to walk the tightrope between developing lower-cost catalytic converter replacements that work on various vehicle applications and satisfying specific parameters related to exhaust emissions.
"By focusing on performance improvements while meeting emission regulations, manufacturers can offset the impact of declining replacement rates in the standard exhaust segment," says Garg. "Also, the ability to cater to their customers' needs in a short turnaround time, providing direct-fit components, and offering a full line supply will emerge as critical success factors."
Market Analysis of the North American Exhaust Components Aftermarket is part of the Automotive and Transportation Growth Partnership Service program, which also includes research in the following markets: Total North American Aftermarket for Selected Fractional Horsepower Motors, North American Heating, Ventilating, and Air-Conditioning (HVAC) Aftermarket, Protect Your Assets: An Analysis of the North American Spray-on and Drop-in Bedliner Market, and North American Selected Brake Components Aftermarket. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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Market Analysis of the North American Exhaust Components Aftermarket / N594