Competition Eases in Starter and Alternator Aftermarket

15 December 1999

Competition Eases in Starter and Alternator Aftermarket with Industry Consolidation

    SAN ANTONIO--Dec. 15, 1999--Remanufactured starters and alternators are experiencing moderate growth, but demand for new units is declining. Sharp price competition in recent years has led to industry consolidation. As a result, price competition is now easing.
    Frost & Sullivan's new research, "U.S. Starter and Alternator Aftermarket," explores this market that generated revenues of $1.47 billion in 1998 and is anticipated to expand to $1.90 billion in 2005. This study provides an in-depth analysis of new and remanufactured starter and alternator end-user markets, as well as their growth potential. Intense competition is forcing suppliers to remanufacture efficiently to remain profitable despite price pressure. This report discusses specific steps for manufacturers to maximize efficiency.
    The aftermarket for starters and alternators is highly competitive. Mass merchandisers -- particularly auto parts retailers -- are increasing their share of distribution by selling to professional installers, in addition to their traditional do-it-yourself markets. Retailers are highly price sensitive, and quick to change suppliers in pursuit of lower prices.
    Several large companies and hundreds of small companies remanufacture starters and alternators. So fragmented is the market that the leader, Unit Parts Company, holds only approximately 14 percent of total revenues. The growing strength of regional and national retail chains favors large remanufacturers, as retailers prefer to buy from single suppliers that can provide broad coverage and high volume. Buying from one source simplifies management and allows retailers to offer consistent quality.
    "Thus, large companies can expect continued growth, while smaller ones will be acquired or leave the market," says Frost & Sullivan automotive analyst Joerg Dittmer. "Even some fairly large companies, including Arrow Automotive, Automotive Parts Exchange, Blue Chip Products, Keeter Manufacturing and US Metric Manufacturing, have gone out of business."
    Frost & Sullivan presents 1999 Market Engineering Awards to companies that have worked hard to make a positive contribution to the aftermarket starter and alternator industry. The Marketing Strategy Award is presented to Exide/SureStart. The Product Line Strategy Award is given to the Robert Bosch Corporation. The Best Website Award is awarded to Auto Electric Warehouse Inc.
    Frost & Sullivan has recognized the following companies as participants within the U.S. Starter and Alternator Aftermarket: A&S Rebuilders Inc.; AC Alternator & Auto Electric; American Automotive Parts Inc. (AAP); American Generator & Armature Inc. (AGA); American Industrial Manufacturing Services Inc.; Ampere Automotive Corporation; Arrowhead Alternator Inc.; Auto Electric Warehouse Inc.; Automotive Import Manufacturing Inc.; Delco Remy International Inc.; Delphi Energy & Engine Management Systems; Delta Starter & Alternator Service; Denso Manufacturing Tennessee Inc.; Dixie Electric Ltd.; EGR Products Company; Euro Electric Division of KoreTek; Excel Automotive Inc.; Exide/SureStart; Foothill Auto Electric; Garner Automotive; Genco Auto Electric Inc.; Harvey Brothers Inc.; Hastings Company, The; Hitachi Automotive Products (USA) Inc.; Midstate Automotive Parts Rebuilders Inc.; Mitsubishi Electric Automotive America Inc.; Motorcar Parts & Accessories Inc. (MPA); Mr. Alternator; Orange County Alternator Inc.; Perfection HY-Test; Precision Parts & Remanufacturing Co.; Rayloc Division of Genuine Parts Company; Recon Automotive Remanufacturers Inc.; Reliance Automotive; Robert Bosch Corporation; Startex; Unit Parts Company; Vernon Auto Parts Exchange (Vapex-Genex Precision); Visteon Automotive Systems (Global Aftermarket Sales Office); Westling Manufacturing Inc.; Wetherill Associates Inc. (WAI); Willamette Electric Products LLC; Wilson USA Inc.; and World Wide Automotive (Division of Delco Remy). Related Companies include: Aura Systems Inc.; Automotive Rebuilders Supply Company Inc. (ARSCO); Champion Parts Inc.; Continental AG; DaimlerChrysler Corporation; Delphi Automotive Systems; Denso Corporation; Denso Sales California Inc.; Exide Corporation; Ford (Customer Service Division); General Motors Service Parts Operations (GMSPO); Genuine Parts Company; Prestolite Electric Inc.; Rebuilders Automotive Supply Inc.; Renard Manufacturing Company Inc.; Robert Bosch GmbH; and Wilson Auto Electric Limited. Distributors include: Auto Value Associates Inc.; AutoZone Inc.; Beck-Arnley Worldparts Corporation; CARQUEST Corporation; CSK Auto Inc.; Engine and Performance Warehouse Inc. (EPW); Engine Parts Group Inc.; Hahn Automotive Warehouse Inc.; Motor Warehouse; National Automotive Parts Association (NAPA); O'Reilly Auto Parts; Parts Plus Auto Parts Stores; Pep Boys; and Performance Automotive Warehouse. Industry organizations include: Automotive Aftermarket Industry Association (AAIA); Automotive Industry Action Group; Automotive Parts & Accessories Association (APAA); Automotive Parts Rebuilders Association (APRA); Automotive Service Association; Automotive Service Industry Association (ASIA); Automotive Warehouse Distributors Association (AWDA); Motor & Equipment Manufacturers Association (MEMA); Remanufacturing Industries Council International (RICI); and Society of Automotive Engineers International (SAE). Industry publications include: Automotive Engineering International; Automotive Rebuilder; Counterman; Global Connection; Import Service; Parts Professional; and Precision Machine Shop; Underhood Service.
    Frost & Sullivan is an international marketing consulting and training company that monitors the automotive industry for market trends, market measurements and strategies. This ongoing research is used to complement a series of research publications such as the "U.S. Starter and Alternator Aftermarket" report and is used to support participants with customized consulting needs. Free executive summaries are available to the press.

"U.S. Starter and Alternator Aftermarket"

Report: 7200-18 Date: December 1999 Price: $3,950