Automobile Market Consolidation Revitalizes the SLI Lead Acid Battery Industry

PALO ALTO, Calif.--Sept. 7, 2004--The consumer automotive industry that contributed to approximately 88.2 percent of the global starting, lighting and ignition (SLI) battery industry has undergone a series of market consolidation over the years. This consolidation has had a significant impact on the reach and service ability of battery vendors.

This market consolidation by the largest end user segment of SLI lead acid batteries has forced the battery vendors to go global to support the original equipment customers.

New analysis from Frost & Sullivan (www.batteries.frost.com), World Starting, Lighting, and Ignition (SLI) Lead Acid Battery Market, reveals that revenue in this market totaled $14.6 billion in 2003 and is projected to reach $19.9 billion by 2010.

"The rising demand across geographical regions coupled with growing consolidation among customers has encouraged SLI lead acid battery vendors to establish in-house manufacturing units, or to form joint ventures to cater to the growing demand in newer markets," says Frost & Sullivan Research Analyst Hariharan Balasubramanian.

Creating a wider reach in terms of product availability and visibility can result in having a larger market acceptance and also equip vendors to cater to the specific needs based on local demands.

Integration in the lead acid battery industry can further help control the strain on profit margins due to the volatility of raw material prices. Coalitions result in larger participants that own their own recycling units, and can exercise better control over the recycling of lead and plastics used in batteries.

Apart from controlling raw material costs, in-house recycling helps manufacturers tide over their total dependence on external sources for lead, and decrease the cost of production during times of shortage of raw material supply. Controlling costs is also the only possibility for being competitive, and profiting from better price realization, since globalization has opened up markets and intensified competition.

"Tier two and tier three vendors could also form strategic partnerships to manufacture and market products, transfer technology, do private label assignments, and serve newer markets, both in terms of applications and geographic spread," states Balasubramanian.

Battery vendors also face a huge challenge with increasing concerns over quality and environmental impact. They are required to manufacture and dispose of lead acid batteries in accordance with the environmental legislations of industry associations and governments in respective areas.

Strict quality control is crucial as that is a key factor influencing battery performance. This is because the technology is uncomplicated without much scope for innovation and no vendor enjoys product exclusivity, thereby making product performance and reliability important criteria.

"Continuous improvement by increasing R&D on product, production techniques and applications, consistency, and enhancement of all business aspects can go a long way in helping battery vendors stay ahead of the competition," concludes Balasubramanian.

World Starting, Lighting, and Ignition (SLI) Lead Acid Battery Market, part of the Battery Subscription, analyzes the market based on its distribution channel, type of construction (flooded SLI lead acid and valve regulated lead acid (VRLA)/sealed SLI lead acid batteries), and end-user application. It provides comprehensive information about various products offered by competitors, along with a survey based on geographical segments. Strategies to develop and maintain market share are also provided. Executive summaries and interviews are available to the press.

If you are interested in an analysis overview which provide manufacturers, end-users and other industry participants an overview, summary, challenges and latest coverage of the World Starting, Lighting, and Ignition (SLI) Lead Acid Battery Market -- then send an email to Julia Paulson -- North American Corporate Communications at jpaulson@frost.com with the following information: Full name, Company Name, Title, Contact Tel Number, Contact Fax Number, Email. Upon receipt of the above information, an overview will be emailed to you.

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.

World Starting, Lighting, and Ignition (SLI) Lead Acid Battery Market

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Keywords in this release: lead acid battery, starting, lighting, ignition, SLI LA, flooded SLI LA batteries, valve regulated lead acid/sealed, VRLA batteries