Press Release

Frost & Sullivan Announces Forecast for European Automobile Components Market

12/05/96

Increase in Unit Prices to Boost Sales in Automobile Components
Aftermarket

LONDON--(BUSINESS WIRE) -- The European automobile component industry
has come through an exceptionally severe and prolonged recession,
which forced all market participants to rationalize and restructure
operations in order to concentrate resources of capital, labor,
materials and time on core business.

As a result, according to a report by international marketing
consultant Frost & Sullivan, there has already been some recovery in
profit margins; and, growth is expected to accelerate in the next few
years.

The report expects the European automobile components aftermarket to
rise from its 1995 level of US$24.19 billion to US$31.82 billion by
the end of the study period in the year 2002.

Germany is the leading national market, accounting for 24 percent of
the overall markets in 1995. This is followed by the UK, valued at
20.4 percent, and France at 17.7 percent in the same year. This
ranking is expected to remain unchanged throughout the study period.

Because the European market for new automobiles has nearly reached a
"mature" stage, revenue growth in the automobile components
aftermarket is thus more likely to be driven by higher unit prices
resulting from new technology than for a significant increase in unit
shipments.

Since scope for increased unit shipments is fairly restricted, the
future of suppliers of "original equipment" and aftermarket components
depends essentially on the margin between advanced technology
development costs, manufacturing costs and marketing or distribution
expenditure on the one hand, and prices which "primary" and
aftermarket customers are willing to pay for more sophisticated
components on the other.

Without technological excellence and high quality control standards,
products cannot be expected to compete successfully in either field
and permanently high levels of investment are indispensable for
survival either as a market leader or a "niche" manufacturer.

Regardless of the product area in question, and regardless of the
technical expertise of a component supplier, commercial success will
require selection of the correct overall strategy and efficient
management in all relevant functions.

The private automobile is here to stay, however, and will always
require aftermarket components for servicing, maintenance and repair
in order to ensure safety, reliability, durability, convenience and
comfort during its life on the road.

Consequently, the aftermarket in Europe, as in other parts of the
world, has a secure future even in the event of revolutionary
technical change - like a move away from the internal combustion
engine in favor of electric power or other methods of propulsion.

Companies participating in this market include: AlliedSignal
Automotive Europe, August Bilstein GmbH und Co KG, Automotive Products
plc, Avon Rubber plc, BBA Group plc, Bendix (Europe) SA, Borg-Warner
Automotive Europe, BTR plc, Calsonic International (Europe) Ltd,
Champion Sparking Plug Co Ltd, Compagnie Gnrale des Etablissements
Michelin, Continental AG, Delco Electronics, Delphi Automotive
Systems, Fichtel und Sachs AG, Freudenberg und Co, Gelenkwellenbau
GmbH, GKN plc, Goodyear SA, Halfords Ltd, Hella International,
Knorr-Bremse AG, Koni BV, Kwik-Fit Holdings plc, Lemfoerder Gelenkwell
GmbH, Lucas Automotive Aftermarket Operations, Magneti Marelli SpA,
Mahle GmbH, Mannesmann Kronprinz AG, Motorola Ltd, NGK Spark Plug
(Europe) GmbH, Nippondenso Europe BV, Nokia Tyres Ltd, Osram GmbH,
Pirelli Tyre Holding NV, Quinton Hazell Automotive plc, Robert Bosch
GmbH, Sachs Allinquant SA, Serck Marston, Siemens Automobiltechnik,
SKF AB, Sumitomo Rubber Industries Limited, T & N plc, Thyssen
Industrie AG, TRW Automotive (Deutschland), Unipart Group, Valeo SA,
Varta AG, VDO Adolf Schindling AG, and ZF (Zahnradfabrik
Friedrichshafen) AG.

Frost & Sullivan is an international marketing consulting company that
monitors the ground transportation industry for market trends, market
measurements, and strategies. This ongoing research is utilized to
update a series of research publications and to support industry
participants with customized consulting needs. Free executive
summaries of all Frost & Sullivan reports are available to the
press. Report#3280-18 Publish date: March 1996 Price: $3950