Demand for Diagnostic Instrumentation to Drive European Garage Equipment Market

LONDON, September 30 -- The EUR 857.2 million European automotive garage equipment industry is rapidly evolving from a traditional repair services provider to a modern computerised and electronic diagnostic solution provider. Powered by rising sales of diagnostic instrumentation equipment, the overall market is set to reach EUR 1.35 billion in 2010.

A key growth driver is expected to be the garage workshop package concept wherein companies offer a complete set of equipment targeted at an application. At the same time, increasing vehicle population and enhanced average aftermarket spend on vehicular maintenance is also likely to support expanded garage equipment sales.

"The moves by companies to leverage their brand through offering products sourced from other equipment manufacturers has also resulted in an increase in sales of garage equipment-in volume terms for the manufacturer and in value terms for the marketing company," notes Frost & Sullivan (http://www.transportation.frost.com) Automotive Industry Analyst Anil Valsan.

The rollback of the block exemption scheme, which currently protects the franchised service network of vehicle manufacturers, is set to boost demand for garage equipment, as it will allow larger chains of independent garages to repair multiple vehicle brands. Such new regulations are anticipated to have a positive impact on the diagnostics equipment market and give independent garages the opportunity to compete with franchised repair networks.

The mechanical testing and handling equipment segment - currently the largest revenue contributor to the garage markets - has transitioned from being a market for new products to becoming primarily a replacement one. For instance, there has been a shift from two wheel to four-wheel alignment equipment; from static to dynamic wheel balancers; from manual-walk around to semi- and fully automated tire changers.

Advanced technologies such as infrared wheel aligning and virtual plane techniques in alignment and balancing are poised to replace conventional mechanical measurement technologies. The growing emphasis on these novel and higher-priced products is set to enhance market revenues.

Providing garages with a nearly complete range of products, Corghi, Maha, CEMB and Ravaglioli dominate the European mechanical testing and handling equipment segment.

Independent equipment manufacturers and several automotive tier 1 and 2 suppliers are both active in the diagnostics instrumentation market. The overall growth of this market is expected to be driven chiefly by independent diagnostics equipment, with particular increase in the sales of hand-held diagnostic equipment.

With the diagnostics instrumentation market projected to generate over half of total market revenues by 2009 and become the largest revenue contributor to the overall garage equipment market, participants such as Robert Bosch, Siemens, Johnson Controls, SPX, Delphi and SKF are looking to strengthen their competitive position.

For competitors in the garage equipment markets, re-branding has emerged as a key competitive strategy. Companies attempt to offer garages a complete range of solutions despite their not having manufactured several of these product offerings. Many garage equipment manufacturers have expanded their product portfolios through purchase of high-technology equipment from other manufacturers or have adopted the mergers and acquisitions route to acquire a comprehensive product range.

"As much as re-branding offers advantages to companies aiming at broadening their portfolio, smaller companies with concentrated technological competence and expertise are also likely to gain from this trend," says Frost & Sullivan Research Analyst Kaushik Madhavan. "Smaller companies with technological advancement in a particular component category stand to gain from selling their products to bigger companies with a better brand image,"

As market consolidation continues, participants such as Snap-on, Facom and Crypton have already established a significant presence across the various product categories in the garage equipment markets. At present, companies based in the south European countries such as Italy are profiting from the re-branding equipment demand in France and Germany. However, they are increasingly facing a challenge from cost-competitive Chinese products.

With over 26.6 percent of the total revenues in 2010, Germany is anticipated to remain the largest geographical market for garage equipment in western Europe. Rising car sales, an increasing number of garages and the growing penetration of garage equipment in Benelux, Iberia and Scandinavia are set to make these regions the fastest growing markets for garage equipment over the long term.

If you are interested in a summary of this research service providing an introduction to the On-Site Power End-User Requirements in Europe, please send an email to Kristina Menzefricke, Corporate Communications at kristina.menzefricke@frost.com with the following information: full name, company name, title, contact telephone number, email. Upon receipt of the above information, the summary will be emailed to you.

Title: Frost & Sullivan's Analysis Of The European Garage Equipment Market

Code: B300

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