Declining Prices Require Revenue-boosting Strategies in the Suspension Parts Aftermarket

PALO ALTO, Calif.--Sept. 29, 2003--The oversupply of suspension parts in the aftermarket, combined with the added pressure of escalating competitive forces, compels manufacturers to find new ways of increasing revenues.

New analysis from Frost & Sullivan (www.frost.com), North American Suspension Parts Aftermarket, reveals revenues in this industry totaled $592.7 million in 2002. This figure is projected to decline to $410.6 million in 2009.

Frost & Sullivan will hold an analyst briefing at 3:00 pm (EDT) on Thursday, October 2, 2003, which will provide industry participants an overview of the North American Suspensions Parts Aftermarket. To participate, please contact Nuha Kadri at nkadri@frost.com with the your name, company, title, telephone number and e-mail address. Upon receiving this information, a confirmation/pass-code will be e-mailed to you.

"The new rules of engagement - of industry success - mandate that manufacturers build scale and achieve sustainability through sheer volume, as opposed to unit profit margins," states Frost & Sullivan Industry Analyst Christopher Chen.

Ride control parts such as dampers and springs deteriorate imperceptibly, and comprise a significant proportion of the total underperformed maintenance market. Serving this pool of undone maintenance represents a promising opportunity for manufacturers and distributors to propel industry growth. Companies' challenge is to motivate technicians and consumers to perform justified maintenance on important suspension parts. Doing so can improve ride safety and extend a vehicle's life.

"Given the volume of vehicles in North America, even capturing a fraction of the 'underperformed maintenance' segment can boost industry revenues dramatically," notes Chen.

Parts manufacturers face various challenges in realizing this objective. Original equipment part quality has been improving, elongating aftermarket replacement rates. Also, consumers are more likely to buy new cars than repair older ones, since they have relatively easy access to favorable financing terms.

In addition to driving demand through the supply channel, manufacturers need to consolidate part numbers and aggressively manage inventories. Excess supply drives down unit prices as manufacturers offer steep discounts to turn over stock quickly.

The suspension parts aftermarket can experience growth as companies win more of the underperformed maintenance market. Streamlining manufacturing and inventory management processes will also help manufactures gain market share. The coming years should be both challenging and promising for innovative companies.

This ongoing growth opportunity analysis is part of the Automotive Aftermarket Subscription, which also includes aftermarket insights on steering system parts, starters and alternators, and compact sport performance. Frost & Sullivan also offers custom growth consulting to a variety of national and international companies. 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 include 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.

North American Suspension Parts Aftermarket

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