Brand positioning vital in steering-system hard parts aftermarket

With demand for steering-system hard parts gradually shifting from premium to less expensive secondary lines, total industry revenues are growing at a flatter rate than unit shipments. Industry revenue and price compression pressures are the dominant factors shaping the steering system hard parts aftermarket. New analysis from Frost & Sullivan ( ), North American Steering System Hard Parts Aftermarket, reveals that the industry generated revenues totaling $371.4 million in 2002. Total market revenues could reach $416.5 million in 2009. "Low end-user knowledge about steering-system parts beleaguers product category development," says Frost & Sullivan Automotive Analyst Christopher Chen. "Lack of consumer understanding about chassis parts allows economy line products to trowel share away from premium product sales. "Price compression and growth of the economy tier ultimately pull down revenues for the industry as a whole, absorbing the potential gains from increased unit shipments," adds Chen. With poor product differentiation and low technological development further intensifying competition, brand acceleration is one key element to gaining a strong foothold in the steering system hard parts aftermarket. Premium line manufacturers are expected to fight price compression pressures by strengthening end-user brand awareness. Federal-Mogul Corporation and Dana Corporation currently dominate the market, and the extent to which they displace premium line share from each other is a critical battleground. "The point to watch for is whether their competition against each other opens up viable opportunities for other companies to gain," says Chen. The second line is already witnessing the emergence of a handful of participants with a strong national presence. "While market leaders increase sales at the economy level to avoid losing market share to the second line companies, the latter are expected to make inroads into the market by differentiating themselves through price, coverage, and service," says Chen. Frost & Sullivan will hold a conference call at 3:00 p.m. (EST) on Wednesday, February 12, 2003 to provide manufacturers, distributors, and other industry participants an overview, summary, challenges and latest coverage on the North American Steering System Hard Parts Aftermarket. Those interested in participating in the call should send an email to Cynthia Cabral - Media Relations Executive at [email protected] .

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