Regular Replacement Vital to Pump up Fuel Filter Industry

PALO ALTO, Calif. June 14, 2004; Failure to replace fuel filters regularly results in longer replacement cycles and lower unit shipment demand in the aftermarket. If end users follow the recommendations of vehicle manufacturers to replace fuel filters regularly, fuel filter companies can expect to stem their diminishing profit margins.

New analysis from Frost & Sullivan (http://www.transportation.frost.com), North American Fuel Filter Aftermarket, reveals that revenue in this market, which posts negative growth, totaled $129.0 million in 2003 and expects to be down to $115.6 million by 2010.

If you are interested in a virtual brochure, which provides manufactures, end-users and other industry participants an overview of the latest analysis of the North American Fuel Filter Aftermarket -- then send an email to Melina Gonzalez -- Corporate Communications at melina.gonzalez@frost.com with the following information: your full name, company name, title, telephone number, fax number and email. Upon receipt of the above information, an overview will be sent to you via e-mail.

"The two factors that contribute chiefly to extended replacement cycles are larger fuel filter trap capacities and cleaner fuel," says Frost & Sullivan Industry Manager Jasmine Sachdeva.

With fuel injected vehicles almost phasing out carbureted engines, fuel filters have become more complicated as these new vehicle models call for sturdier filters that survive greater pressures.

Therefore, original equipment manufacturers of fuel filters are developing products with increased capacities to allow for less frequent aftermarket replacement.

To ensure filter replacement in accordance with vehicle manufacturers' suggestions, manufacturers can enlist the support of the technicians that change these filters. Thus, these technicians can play an important role in driving the industry.

Another factor that contributes to depressed demand is the improved quality of gasoline, which causes fewer contaminants to clog up filters and hence lowers replacement rates.

Large retailers yield inordinate bargaining power over small fuel filter suppliers. Distribution channels have consolidated and the threat that large distributors exert over manufacturers is that they could move business elsewhere if another manufacturer offers better supply terms.

To this trend, filter suppliers are economically sourcing their products from overseas manufacturers directly, thus anchoring prices. In addition, this has led to the commoditization of the product.

Brand name vies with price when it comes to the crucial differentiator in purchase decisions. As imported filters, even lower quality, perform quite satisfactorily, their lower price makes them more appealing than the expensive North American fuel filters.

"To stem the commoditization of their products, manufacturers need to promote brand awareness among installers and end users so that they will be willing to pay a premium for some brands," says Sachdeva.

Manufacturers are working in tandem with distribution channel companies to enhance the appeal of their products and brands. Besides these efforts, the market can also benefit from producing premium quality stainless steel filters that can boost unit prices.

The North American Fuel Filter Aftermarket, a part of the, North American Aftermarket subscription, analyzes the market and provides insight to overcome a shrinking profit margin. It closely examines competitors, revenues, prices, and unit shipments. It identifies key challenges facing the industry and the drivers and restraints upon growth. Executive summaries and interviews are available to the press.

Frost & Sullivan, an international growth consultancy, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes custom strategic consulting, market intelligence and management training. Our mission is to forge partnerships with our clients' management teams, to deliver market insights, and to create value and drive growth through innovative approaches. Frost & Sullivan's network of consultants, industry experts, corporate trainers and support staff spans the globe with offices in every major country.