The European Starters and Alternators Aftermarket

                New entrants strengthen market competition

A new study by automotive analysts Frost & Sullivan shows increasingly
fierce competition in the European starter motors and alternators
aftermarket.

In recent years, the market has been characterised by a slight decline in
units and revenues, increasing consolidation among the major companies,
price competition and entry from new participants.  Frost & Sullivan
predicts that there are more competitors waiting in the wings to enter the
market.

The  study  found  the  market  was worth around 426 million Euros and 7.66
million units shipped in 2000, down from 438 million Euros and 7.69 million
units  in  1997.  Market  growth  is expected to be negative or flat in the
mature  European  markets of Germany, France and the UK. It is the Southern
European countries, like Spain, which hold most promise.

The  European  starters and alternators aftermarket is heavily consolidated
and  regional.   Apart  from  Bosch  and  Valeo, who have good market share
overall  in  the  European market, other players are strong in only certain
specific  markets,  usually  their  home country. Market shares also differ
significantly   across   the   independent  and  franchised  chains.  Local
remanufacturers  have  good  positions  in  some  markets but their overall
market shares are low.

The market has also seen several relatively new entrants, notably Hella and
Delco  Remy,  who are both doing very well in a short period of time. There
has  also been a push from some cheap suppliers from Eastern Europe such as
Iskra from Slovenia.

Frost  &  Sullivan  expects  a more companies to enter the European market.
Quinton  Hazell,  which includes the Friessen brand in Germany, is starting
to make inroads into various European markets, and Denso will start to play
a  role after purchasing Magnetti Marelli's rotating electric's operations.
Frost  & Sullivan analysts expect some more merger and acquisition activity
in this market in the future.

The report also determines the different levels of penetration of starters
and alternators with the Car Parc in European countries. For example, in
Germany 1 in 22 cars have a replacement unit sale of a starter or
alternator compared with 1 in 18 in UK. In sharp contrast, Italy has a
replacement rate of 1 in 29 cars, which shows the high potential in the
Italian market if it is converted from repair to unit sales.

Despite the downward spiral in revenues, the report says there are several
positive influences on the market, which should improve the situation in
the long term.  These include: growth in the European Car Parc, increased
popularity of remanufactured products, increase in average age of car parc
and life span of vehicles in Europe and new product lines like liquid
cooled alternators which will help increase average prices in the second
half of the decade.

Frost & Sullivan is an international marketing consulting company that
monitors a comprehensive spectrum of industrial markets for trends, market
measurements and strategies. This ongoing research is utilised to
complement a series of research publications such as the European
Automotive Electric Motors Market to support industry participants with
customised consulting needs. Free Executive Summaries of all Frost &
Sullivan reports are available to the press.