Table of Contents
Scopes and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Abbreviations and terms
Executive Summary
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- Aftermarket sluggish in a slowing economy
- Economic slowdown translates into several negative market drivers, but…
- End buyer can be individual consumers or professional installers
- DIY aftermarket relies on a complex distribution structure
- Auto parts store chains grow through expansion and turn to DIFM
- Dealer garages can claim advantage on expertise
- Manufacturers need customer diversification and premium products for topline growth
- Umbrella branding allows for more investment in brand equity
- Branding through distributor warranty helps generic penetration
- Innovation in the era of green auto
Insights and Opportunities
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- Training needed to address increasing car complexity
- Further thoughts on umbrella branding for the DIY market
- Dealers go after repair business with longer warranties
- Consumer education focusing on fuel economy
Fast Forward Trends
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- No Boundaries
- What's it about?
- Implications
- Ugly is the New Beautiful
- What's it about?
- Ugly better
- Understanding Tires (and more)
- One person’s lack of info is another’s info overload
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- Figure 1: Factors influencing tire purchasing decisions, by gender, April-May 2008
- The opportunity
Market Size and Forecast
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- Aftermarket growth slows with economy
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- Figure 2: Total U.S. sales and forecast of the auto aftermarket, 2002-12
- Figure 3: Total U.S. sales and forecast of the auto aftermarket, at inflation-adjusted prices, 2002-12
Competitive Context
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- DIY versus DIFM
- Cars stay in use longer and need repair
Overall Segment Performance
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- Most segments grow with the overall market
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- Figure 4: Total U.S. sales of the auto aftermarket, by segment, 2005 and 2007
Segment Performance—Tires
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- Fewer miles driven and less disposable income to drag tire market down
- Prices rise on increased raw material costs
- Tire efficiency ratings may boost premium priced products
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- Figure 5: Total U.S. retail sales of passenger and light truck replacement tires, 2002-08
Segment Performance— Engines, Transmissions, and AC
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- Engine parts commoditized; engines more complex; weak segment
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- Figure 6: Total U.S. retail sales of engines, transmissions, and AC, 2002-08
Segment Performance— Accessories
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- Improvement of car appearance drives accessories growth
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- Figure 7: Total U.S. retail sales of aftermarket accessories, 2002-08
Segment Performance—Auto Fluids & Chemicals
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- Auto fluids driven by premium brands and technician recommendations
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- Figure 8: Total U.S. retail sales of auto fluids, 2002-08
Segment Performance—Electrical
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- Electrical segment shows little evidence of innovation
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- Figure 9: Total U.S. retail sales of electrical, 2002-08
Segment Performance—Exhaust Systems
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- Performance enhancement to drive growth in exhaust systems
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- Figure 10: Total U.S. retail sales of exhaust systems, 2002-08
Segment Performance—Brakes
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- Brake sales perform better than other internal parts
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- Figure 11: Total U.S. retail sales of brakes, 2002-08
Segment Performance—Steering & Suspension
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- Front wheel drive is up, while shock absorbers down
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- Figure 12: Total U.S. retail sales of steering, wheels, and shocks, 2002-08
Segment Performance—Other
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- Sales of commoditized parts show slow to no growth
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- Figure 13: Total U.S. retail sales of other auto aftermarket parts, 2002-08
Segment Performance—In-car Entertainment
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- Autosound purchases suffer from movement to MP3 players
- Future is in GPS navigation and mobile internet
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- Figure 14: Total U.S. wholesale sales of in-car entertainment, 2002-08
Retail Channels
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- Key points
- Aftermarket products available through a wide variety of channels
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- Figure 15: Where aftermarket products are purchased, May 2008
Retail Channels—Auto Parts Stores
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- Key points
- Auto parts stores keep pace with overall market
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- Figure 16: U.S. sales of leading auto store chains, 2005 and 2007
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- Figure 17: Key operational data of leading auto store chains, 2007
- Leading chains aim for the DIFM market
- Fragmented market sees fair share of M&A activity
Retail Channels—Car Dealerships
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- Key points
- Parts revenue sees slow decline
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- Figure 18: Total U.S. retail sales of automotive parts at car dealerships, 2002-07
- Body work declines, while mechanical work remains vital
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- Figure 19: U.S. retail sales of automotive parts at car dealerships, by type, 2007
- Figure 20: Indexed retail sales of automotive parts at car dealerships, by type, 2002-07
- Dealers enjoy advantage in growing car complexity
Market Drivers
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- Population grows but vehicles may stagnate
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- Figure 21: U.S. population estimates by age, 2003-13
- Figure 22: U.S. registered drivers and vehicles per driver, 1985-2006
- Americans drive less to save on gas
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- Figure 23: Average gas prices and change in trailing twelve-month (TTM) vehicle miles driven, January 2006 to May 2008
- Consumer confidence is low and aftermarket is still retail
- Improved car quality requires less repair
Leading Companies
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- Key points
- Customer diversity key to survival in U.S. downturn
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- Figure 24: North American sales of major auto parts manufacturers, 2007
- Tire manufacturers
- Commoditization
- Production efficiency
Brand Qualities
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- Umbrella branding allows for more investment in brand equity
- Warranties from distributor effectively “brand” generic parts
- Goodyear launches mid-tier lines to up-sell the value consumer
Innovation and Innovators
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- The era of green auto
- Scuderi air-hybrid engine
- Ricardo linear actuation technology
- eCycle battery-powered air conditioning
- Valeo
- Hella
- Green technologies of the future
- Efficient-V engine design
- Eden Energy hydrogen storage
- Bridgestone makes run flats easier to service
- Online vehicle diagnosis
Advertising and Promotion
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- Tire manufacturers
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- Figure 25: Media expenditures of leading auto tire brands, 2006-07
- Bridgestone
- Goodyear
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- Figure 26: Gemini/Goodyear Auto Repair, November 2007
- Michelin
- Continental
- Products targeting the auto/truck enthusiast
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- Figure 27: Bully Dog Triple Dog Downloader, March 2008
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- Figure 28: Optima Car Battery, October 2007
- Figure 29: Fram air filter, May 2008
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- Figure 30: K&N air filter, March 2008
- Products targeting an upscale consumer
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- Figure 31: NRS Brake Pads, December 2007
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- Figure 32: Rain X Wiper Blades, January 2008
- Figure 33: Peak Long Life Antifreeze, October 2007
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- Figure 34: Sylvania Silverstar Ultra Headlights, October 2007
- Figure 35: Black & Decker Automotive Starter, December 2007
- Auto parts chains
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- Figure 36: Media expenditures of leading auto parts store chains, 2006-07
- AutoZone
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- Figure 37: AutoZone, December 2007
- Advance Auto
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- Figure 38: Advance Auto Parts, March 2008
- NAPA Auto
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- Figure 39: NAPA Auto Parts, March 2008
- Discount Tire Centers
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- Figure 40: Discount Tire Centers, February 2008
Appendix: Trade Associations
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