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American Automotive HVAC Manufacturers Fight to Remain in the Market

4 October 1999

Frost & Sullivan - North American Automotive HVAC Component Manufacturers Fight to Remain in the Market

    SAN ANTONIO, Oct. 4 --  The North American automotive
heating, ventilation and air-conditioning (HVAC) components aftermarket is
currently experiencing a period of turbulence. While profits are decreasing,
competition is growing more intense with the introduction of new market
participants.
    Frost & Sullivan's (http://www.frost.com) study, North American HVAC Components
Aftermarket, analyzes five HVAC components used in the automotive industry:
condensers, compressors, evaporators, heater cores and accumulators and
receiver-driers. In addition, this research carefully examines competitive
factors and trends impacting the industry.
    In 1998, revenues for the HVAC components aftermarket reached
$553 million. The HVAC aftermarket is a mature market and growth is primarily
driven by an increasing vehicle population. As the number of vehicles with
air-conditioning systems increases, so does the demand for replacement parts.
    The increase in demand for HVAC components has been met by increased
competition among HVAC component manufacturers. Most aftermarket manufacturers
offer products with similar features, so consumers have very little brand
awareness. This results in HVAC components assuming a generic connotation,
causing extreme price pressure to ensue.
    "Competition in all segments of the HVAC components aftermarket has grown
more fierce, with an increasing number of large competitors attempting to
seize greater market share," says Frost & Sullivan analyst Meenakshi Ganjoo.
"Manufacturers are trying to achieve this through acquisition and
consolidation."
    The consolidation trend in the HVAC component aftermarket is creating new
opportunities for growth. Increased competition will force some manufacturers
out of the market, while the entry of Tier I suppliers -- which increases
competition -- will produce opportunities for new niche markets.
    The HVAC components aftermarket is also witnessing technological changes
driven by the auto manufacturers' continuous search to increase miles per
gallon ratings and efforts to meet government requirements. Components such as
condensers, compressors and evaporators are getting smaller and lighter, and
air-conditioning components have been redesigned to work with a newer
refrigerant. Demand for more energy-efficient air-conditioning systems is
anticipated to affect future design and technological changes in the
aftermarket as well.
    Frost & Sullivan presents Marketing Engineering Leadership Awards to
companies that make positive contributions to the HVAC component aftermarket.
The Competitive Strategy Award goes to Visteon Climate Control Systems, Ltd.
The Product Quality Award is awarded to Modine Manufacturing Company.
    Frost & Sullivan, an international marketing consulting company, monitors
the HVAC components aftermarket for market trends, measurements and growth
rates. This research is used to update online research including aftermarket
topics such as starters, alternators and brake and exhaust system parts.
    Visit Frost & Sullivan's Web site at:  http://www.frost.com .

           Report:  5583-18    Date:  August 1999    Price:  $3,950