Outsourcing Affects Dynamics of North American Starters and Alternators Aftermarket

PALO ALTO, Calif.--Nov. 1, 2004--Outsourced manufacturing of automotive starter and alternator units from Asian countries such as China and Taiwan is increasing price competition in the North American automotive starters and alternators aftermarket. As units manufactured offshore come with a lower price tag, domestically manufactured units need to keep the price difference low to stay competitive.

New analysis from Frost & Sullivan (http://www.transportation.frost.com), North American Starters and Alternators Aftermarket, reveals that revenue in this market totaled $1.2 billion in 2003 and is projected to reach $1.5 billion in 2010.

If you are interested in a virtual brochure, which provides manufacturers, end-users and other industry participants an overview of the latest analysis of the North American Starters and Alternators Aftermarket - then send an email to Melina Gonzalez - Corporate Communications at melina.gonzalez@frost.com with the following information: your full name, company name, title, telephone number, fax number and email. Upon receipt of the above information, an overview will be sent to you via e-mail.

The outsourcing trend is expected to continue until it ceases to be an economical option. Revaluation of the currency of China - a major participant in this market - is likely to provide relief to North American aftermarket participants.

Interestingly, manufacturers can build units at low cost in offshore facilities, but still sell them at par with new unit pricing. This offers them an important source of revenue.

New units also permit product diversity with constant emphasis on enhanced product quality, performance, and space engineering. Participants benefit from the improved technical quality, space engineering, and constant redesigning of starters and alternators, since these enable them to gain ground in a mature market.

"These mechanical innovations result in the late models being increasingly expensive and complicated to remanufacture in comparison to the old models," says Frost & Sullivan Research Analyst Deepak Balu. "With more complex systems requiring remanufacture, costs are increasing and the average manufacturer price level is on the rise."

Improved technical quality of late model units increases their life expectancy, thereby having a negative impact on the aftermarket. The market is witnessing a rise in demand as the average age of vehicles is increasing. A drastic reduction of vehicle scrappage rates, due to the superior equipment being employed by manufacturers and the prohibitive cost of new vehicles, has helped spur the aftermarket.

"Consolidation at the distributor end is another important trend in the aftermarket that is creating few but large customers with large volume demands," says Balu. "As a result, the manufacturers need to act as full-line suppliers to fulfill all customer needs, though these demands are few and intermittent."

The North American Starters and Alternators Aftermarket is a part of the North American automotive aftermarket subscription: 9801-18. The study analyzes the starters and alternators aftermarket in North America, focusing on the new and remanufactured unit segments. This research service provides a comprehensive market overview, revenue forecasts, drivers, restraints, and industry trends. Executive summaries and analyst interviews are available to the press.

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North American Starters and Alternators Aftermarket

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