Complexity of Automotive Heating, Ventilation and Air Conditioning Systems Undermines Repair Process

PALO ALTO, Calif.--Feb. 2, 20043, 2004--The closed loop system of heating, ventilation and air conditioning equipment creates a ripple effect when a single component fails, resulting in soaring warranty replacement costs, the reputation of providing poor service and quality complaints in the aftermarket.

New analysis from Frost & Sullivan (www.transportation.frost.com), "North American Heating, Ventilation and Air Conditioning Aftermarket," reveals this market generated revenue of $1.13 billion in 2002. Total market revenue is expected to reach $1.28 billion in 2009.

Technicians daunted by the complexity of the heating, ventilation and air conditioning (HVAC) system often opt to change the failed part instead of performing a complete diagnosis to uncover the root cause. Diagnosis is a longer process and the results are often hard to sell due to customers' skepticism in replacing a working component.

Apart from the interdependence of the components, service-related challenges also make diagnosis tricky. For instance, compressor oil selection, recognition and handling of refrigerant blends, and air conditioning sealers that glue up equipment when the system is opened for inspection can impair a technician's decision-making process.

To curtail these aftermarket handicaps, HVAC participants are pursuing technician support strategies where technicians receive electronic catalogs, a wide spectrum of training options, and diagnostic and equipment protection tools.

"Emphasis on customer education and proper diagnosis by the HVAC component suppliers and repair industry are improving installation skills and repair knowledge," states Frost & Sullivan industry analyst Mary-Beth Kellenberger.

Aftermarket participants have found that their original equipment affiliations are important but also limiting. The key to meeting the demands of the aftermarket is the ability to cover a broad vehicle spectrum. 2002 saw many participants sourcing products from competitors and manufacturing outside their core competencies to meet these demands.

However, this cross selling has homogenized product lines across the market, leaving little room for differentiation. Since there is little distinction in the product quality/designs of different brands, aftermarket suppliers are marketing their products at the service, pricing and training differential levels.

Realizing the importance of advertising in a competitive environment, smaller distributors and retailers are forming clusters of buying groups and demanding marketing funds and merchandising support from large aftermarket vendors and manufacturers.

"Aftermarket participants prefer to consolidate since they realize that securing a position within a buying group ensures long-term viability," notes Kellenberger.

Companies that can capitalize on their positions as aftermarket suppliers instead of OE HVAC suppliers are expected to bring increased value to the distribution channel.

If you are interested in a virtual brochure which provides manufacturers, end-users and other industry participants an overview of the analysis of this market, send an e-mail to Nuha Kadri, industrial media relations executive, at nkadri@frost.com with the following information: your full name, company name, title, telephone number, e-mail and title of the brochure you are interested in receiving. Upon receipt of your information, an overview will be sent to you via e-mail.

The "North American Heating, Ventilation and Air Conditioning Aftermarket," a part of the Transportation subscription, provides a comprehensive analysis of the impact of an increase in new vehicle air conditioning installation rates on the aftermarket. It also details the effect of the end-user preference for air conditioning versus rolling down windows and that of zone systems on the growth of aftermarket component sales. The aftermarket is segmented into compressor, condenser, evaporator, heater core, accumulator, receiver-drier, expansion valve and radiator product categories. Interviews and Summaries 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.

"North American Heating, Ventilation, and Air Conditioning Aftermarket"

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Keywords: HVAC, compressor oil, refrigerant blends, air conditioning sealers, electronic catalogs, homogenized product lines, condenser, evaporator, heater core, accumulator, receiver-drier, expansion valve, radiator, market research, technology.