Price Pressures Cause Competitors to Max Efficiency And Consolidate
25 January 1999
Frost & Sullivan - Price Pressures Cause Competitors to Maximize Efficiency And Consolidate in Automotive OE Trim Products Markets
MOUNTAIN VIEW, Calif., Jan. 25 -- Price is the major
competitive issue facing manufacturers in the OE trim products markets.
Because these markets are becoming mature and saturated, differentiation is no
longer a competitive factor. It is crucial that suppliers maximize efficiency
in all aspects of their operations in order to price competitively and still
remain profitable.
According to new strategic research conducted by Frost & Sullivan
(http://www.frost.com), North American Automotive OE Trim Product Markets, revenues
reached almost $10.7 billion in 1998, although the market is expected to
decline through 2001 due to anticipated slower vehicle sales. The industry is
forecast to recover after 2002, as new vehicle demand increases.
Although most trim components have gained high market penetration,
suppliers are still concerned with research and development because auto
makers insist that suppliers take on more responsibility for R&D, design and
engineering of components. Technological advancements include changes in
materials and designs, and electric systems are being integrated into
components such as door panels and headliners.
Despite recent consolidation, the OE trim products market remains
fragmented, as the top three competitors hold only about 32 percent of the
market. The interior component segment has experienced much consolidation as
auto makers continue to move toward sourcing complete interiors rather than
individual components. Consolidation has not been as strong among exterior
suppliers, according to Frost & Sullivan Analyst Joerg Dittmer.
The relentless pressure from auto makers to lower prices has caused
suppliers to maximize efficiency through mergers, joint ventures and
acquisitions. The trend toward larger suppliers continues as smaller companies
are acquired or forced out of the business, says Dittmer, because larger
suppliers are more capable of realizing economies of scale. In addition, auto
makers want to work with fewer, more capable suppliers that can supply
assembly plants globally.
New entrants generally have trouble breaking into automotive OE markets
mainly as a result of established relationships between auto makers and
suppliers and the large investments and experience necessary. Dittmer agrees
this is true in the automotive OE trim products market where new competition
is more likely to come from existing trim component suppliers expanding into
related products. However, because of the slow long-term growth trend, growth
can only gained by taking market share from competitors.
This new study by Frost & Sullivan, North American Automotive OE Trim
Product Markets, discusses both interior and exterior products that are mainly
used to enhance the appearance of vehicles. Products covered in this study are
door panels, dash panels, headliners, floor treatment, plastic bumper fascias,
weather seals, lower body cladding, rear spoilers and radiator grills. The
study provides revenue forecasts, market shares, market and technology trends,
and discusses competitive issues and strategies.
The companies participating in this market include: ABC Group Inc.,
Aeroquip.Inoac Corp., BTR North American Automotive Division, Budd Company,
California Automotive Sealing Inc., Cambridge Industries Inc., Collins &
Aikman Corp., Conix Corp., Cooper Tire & Rubber Co., DDM Plastics Inc., Decoma
Exterior Trim Inc., Decoma International Inc., Delphi Interior Systems,
Eagle-Picher Trim Division, Findlay Industries Inc., Foamex International
Inc., G&L Industries, GenCorp Inc., Goodyear Tire & Rubber Company, Green
Tokai Co. Ltd., Guardian Automotive, Honda of America Manufacturing, Horizon
Plastics Co. Ltd., Hutchinson Kingston Warren, Injex Industries Inc., IRAUSA
American Company, Johnson Controls Inc., JPE Inc., Kantus Corporation, Lacks
Enterprises, LDM Technologies Inc., Lear Corp., Lear Donnelly Overhead Systems
L.L.C., Magee Rieter Automotive Systems, Magna Interior Systems Inc., Mexican
Industries in Michigan Inc., Peregrine Inc., Plastic Omnium Auto Exterior,
Rehau Inc., Saturn Corp., Siegel-Robert Inc., Sommer Allibert Industrie,
Standard Products Co., Textron Automotive Company, TG North America Corp.,
Thona Corporation, Toyota Motor Manufacturing North America Inc., United
Technologies Automotive, Ventra Group Inc., Venture Industries Corporation,
Visteon Automotive Systems, Worthington Custom Plastics, Related Companies:
3M Company, A.G. Simpson Co., American Bumper & Manufacturing Co., Camrose
Technologies L.L.C., Cosma International Inc., Delphi Automotive System,
Delphi Packard Electric Systems, Flex-N-Gate Corporation, FOHA Corporation,
GGenCorp Inc, GE Plastics, Guardian Industries Corp., ICI Polyurethanes, Inoac
Corporation, Intertec Systems, Irvin Automotive Products, Ishikawa Gasket Co.
Ltd., Johnson Controls Inc., Magna Interior Systems of America Inc., Magna
International Inc., Magna International of America Inc., Plastech Engineered
Products Inc., Samsonite Canada Inc., Sommer Allibert Industrie,
Steyr-Daimler-Puch AG, Symatec, Textron Inc., Toyoda Gosei Company Ltd.,
United Technologies Corp., Industry Organizations: American Iron and Steel
Institute (AISI), International Organization for Standardization, American
Automobile Manufacturers Association (AAMA), Association of International
Automobile Manufacturers Inc., Automotive Parts Manufacturers Association,
Canadian Vehicle Manufacturers Association, Institute of Transportation
Engineers, Insurance Institute for Highway Safety/Highway Loss Data Institute,
Motor and Equipment ManufacturersAssociation (MEMA), Office for the Study of
Automotive Transportation, Original Equipment Suppliers Association (OESA),
Society of Automotive Engineers (SAE), Industry Publications: Automotive
& Transportation Interiors, Automotive Engineering International, Automotive
Interiors International, Automotive Trim & Restyling News, Government
Agencies: Department of Transportation, Federal Highway Administration (FHA),
National Highway Traffic Safety Administration (NHTSA), U.S. Department of
Transportation (DOT).
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 #5715-18 North American Markets for Advanced Automotive
Material Technologies, #5746-18 North American Markets for Automotive Coatings
and Adhesives, #5137-18 North American Light Truck Spray-On Bedliner
Aftermarket and #5769-18 North American Automotive OE Lighting Products
Markets, and to support industry participants with customized consulting
needs.
Report: 5768-18 Publication Date: Jan. 1999 Price: $2950
Visit the Frost & Sullivan Web site: http://www.frost.com