Longer-Lasting Parts Threaten Replacement Rates

    SAN JOSE, Calif.--May 21, 2001--Technological advances in automotive gaskets, seals, belts and hoses by original equipment manufacturers (OEMs) could continue to delay the demand for replacement parts.
    While traditional repair cycles were three to five years, longer-lasting parts have extended these cycles to six to eight years. Market participants may have to rethink business strategies to capitalize on market opportunities.
    According to new analysis from Frost & Sullivan (www.transportation.frost.com), "North American Belts, Hoses, Gaskets, and Seals Aftermarket," the total market earned $1.09 billion in 2000 and is projected to reach $1.26 billion by 2007. "Differentiating products by technology is another excellent strategy for countering price erosion," says Frost & Sullivan Research Analyst Andrew Hamlin. "Manufacturers that can establish a brand name and create the perception of better performance will be able to charge premium prices."
    Establishing partnerships could also prove crucial for some firms. For smaller manufacturers, the key to survival in the aftermarket will be to partner up with larger competitors.
    In the gasket and seal segment, for example, the move toward multi-layered steel (MLS) and molded rubber will stretch the resources of smaller firms, as tooling costs for these products are high. Manufacturers that already supply automakers can spread out tooling costs, thereby offering more competitively priced products to the aftermarket. Smaller manufacturers should partner with original equipment suppliers to repackage MLS under their own brand name.
    Frost & Sullivan presents the 2001 Marketing Engineering Awards to companies that have worked diligently to make a positive contribution to the automotive gaskets, seals, belts and hoses industry. These market specific awards are presented to: Goodyear Tire & Rubber Co., Dayco Products Inc., Federal-Mogul Corp. and The Gates Rubber Co.