The current average vehicle age in Europe of 9.4 years has placed more vehicles in the prime replacement range for a brake job, giving a huge boost to the aftermarket demand for brake pads and rotors. The aging of vehicles in operation has been backed by the decreasing service life of brake components, particularly the rotors, further aiding the aftermarket suppliers.
New analysis from Frost & Sullivan, “2015 European Category Management Report: Brake Pads and Rotors Aftermarket” finds that the market earned revenue of €2.76 billion (approximately $3.1 billion USD) in 2015 and estimates this to reach €3.26 billion (approx. $3.7 billion) in 2018.
While the customer pool for brake pad and rotors has expanded, the European financial crisis has caused a drop in the number of miles driven, as people are reluctant to purchase petrol for their daily commute. In addition, the growing use of other mobility solutions, such as high-speed trains and car-sharing, is lowering the miles driven and causes an increased need for parts replacement, according to Frost & Sullivan’s research.
“This dip in demand will be offset by the escalating prices of brake pads, particularly in the imported budget line, as their synthetic components are becoming increasingly expensive,” said Oindrila Bhar, Frost & Sullivan intelligent mobility research analyst. “The rising costs of raw materials and transport will contribute to a moderate price hike for brake pads. Besides, as pads have a higher level of differentiation than rotors, their advanced friction formulations can be priced higher, while the prices of brake rotors are expected to remain flat.”
Almost all rotors and a significant percent of brake pads sold in the European automotive aftermarket are manufactured in China. This means that the decline in the value of the Chinese yuan will make these products less expensive to procure in due course.
“Manufacturers can widen their profit margins on brake components by revising the distribution structure and recruiting new channel partners,” noted Bhar. “Partnerships between market participants will help guard against competition from direct importers and offshore manufacturers and thus, allow the domestic companies to optimally tap market demand.”
For complimentary access to more information on this research, visit: http://frost.ly/4s.
