Increasing competition in the tonneau cover aftermarket is encouraging manufacturers to focus on brand development to set themselves apart. Currently, manufacturers are seeing greater interest in the hard tonneau segment, as it is likely to generate more revenues than the soft tonneau segment. In the next few years, major participants in the aftermarket are likely to expand their base and improve market share by reaching out to more end users with new products in acrylonitrile butadiene styrene (ABS) plastic and retractable sub-categories of the hard tonneau segment.
New analysis from Frost & Sullivan's shows that the North American Light Truck Tonneau Cover Aftermarket earned revenues of approximately $254.7 million in 2005 and estimates to grow to about $300.1 million in 2012.
"In order to market effectively, manufacturers are trying to figure out the kind of styling, packaging, and promotion that will encourage pickup truck owners to invest in tonneau covers," says Frost & Sullivan Research Analyst Rahul Ganju. "Manufacturers are also expected to develop awareness of their brand name to have a successful aftermarket program through cooperative advertising and sales promotion with distributors and truck accessory store owners."
The implementation of new pickup truck designs is another key factor that could create growth potential in this market. The market is currently witnessing an uptrend in the number of pickup truck models, enhancing the uptake of tonneau covers.
"However, growing competition, coupled with changing market demographics is likely to restrain market growth," notes Ganju. "The possibility of losing end users to competitors forces manufacturers to constantly strive to improve their products."
To achieve this, market participants are expected to focus on developing innovative and high-end, cost-efficient products with unique features, as purchase decisions by end users are mainly based on the aesthetic appeal of the product, functionality, and price.
Educating truck accessory store owners, retailers, and distributors about the better quality of their products is also likely to improve profit margins. This move by the manufacturers is likely to create greater product awareness and increase overall sales.
Aggressive advertising campaigns, attractive warranty packages,efficient customer service, high quality products, and effective brand positioning strategy are vital aids in increasing revenues.