OEMs Challenge Engine Control Unit Aftermarket Participants
29 June 1998
Frost & Sullivan: OEMs Challenge Engine Control Unit Aftermarket Participants
MOUNTAIN VIEW, Calif., June 29 -- Auto manufacturers began
equipping vehicles with engine control units (ECUs) in the mid-1970s.
Increasingly demanding fuel economy regulations and emissions standards
generated a need for ECUs, and by 1981 every passenger car produced in the
U.S. had one. By managing engine functions more accurately than mechanical
controls, ECUs reduce emissions and fuel consumption and increase performance.
According to strategic research conducted by Frost & Sullivan
(http://www.frost.com), U.S. Engine Control Unit Aftermarket, revenues for the U.S.
aftermarket for engine control units reached $69 million in 1997, and the
number of cars and light trucks in the United States equipped with ECUs in
1998 is about 170 million.
Growth in the engine control unit market has been positive, fueled mainly
by vehicle population growth, an increase in miles driven, and a higher
proportion of vehicles in operation with ECUs. However, annual growth has
slowed substantially in the last three years, due to improvements in OE
quality. Although new technologies exist, they are in the hands of OEMs, so
companies are being forced to grow by outsourcing to competitors or by taking
market share from competitors.
"The key trend in the ECU aftermarket has been the move towards offering
full-line coverage," says Frost & Sullivan Automotive Analyst Dean Quock.
There has also been a change in distribution channels for ECUs. Although auto
parts retailers are increasing their share of distribution, most ECUs are
still sold through the original equipment service channel and traditional
distribution channels.
Technology has changed drastically in the last 10 years, and the future of
aftermarket vendors is threatened. The older ECU designs contained removable
chips that were easy for companies to remanufacture. But today many new ECUs
have flash chips, which are difficult to service and recalibrate without the
equipment and codes used by the OEMs. Companies need calibration PROM chips
and expensive equipment, such as a tester which costs $100,000 and needs
frequent software upgrades.
The major competitive issues that aftermarket participants face are
quality, technology, distribution, core programs and price. This market does
not have severe price pressure or product dumping, nor are there any
attractive acquisition opportunities. According to customers, companies need
to offer a full line selection to succeed in the electronic control unit
market.
The companies participating in this market include: Automotive
Electronics, Cardone Industries, Chrysler Component Operations/Huntsville
Electronics, Delphi Delco Electronics Systems, Denso International America,
Inc., Echlin, Inc., General Motors Corporation, Hitachi Automotive Products,
Indiana Precision Technology, KEM Manufacturing Company, Inc., Lucas Varity
Corporation, Micro-Tech Automotive Industries, Mitsubishi Electronics America,
Inc., Motorola Inc. Automotive Industrial Electronics Group (AIEG), Python
Injection Incorporated, Robert Bosch Corporation, Siemens Automotive
Corporation, TEMIC Automotive Technical Center, TRW Automotive Electronics
Group, Visteon Automotive Systems Powertrain Control Systems Division.
Frost & Sullivan is an international marketing consulting company that
monitors the automotive industry for market trends, market measurements and
strategies. This ongoing research is utilized to update a series of research
publications such as #5766-18 North American OE Engine-Related Component
Markets, and to support industry participants with customized consulting
needs.
Visit Frost & Sullivan's Web site: http://www.frost.com
Report: 5127-18 Publication Date: June 1998 Price: $2950