PALO ALTO, CA — As the majority of automobile manufacturers employ disc-braking systems, demand for premium and ceramic brakes is on the rise in the United States and Canada. Despite their high cost, continued demand in the aftermarket is expected.
Niche markets such as tuner pads for performance racing and customized vehicles, along with severe-duty brake pads for vehicle fleets such as police cruisers and tow trucks will boost demand in the brake system parts aftermarket.
New analysis from Frost & Sullivan, North American Brake System Parts Aftermarket – Friction Parts, reveals that revenue in this market totaled $1.07 billion in 2004 and estimates to reach $1.59 billion by 2011.
However, escalating costs of raw materials such as steel, resin and fuel needed to produce and transport brake friction components will hinder revenue growth in the aftermarket.
The boom in steel prices is affecting manufacturers in all verticals, notably in the automotive sector. Steel is a key ingredient in brake pads and shoes, as well as backing plates and other associated hardware. For some manufacturers, costs are likely to rise well above 40 percent in the near future.
This creates additional pressure on manufacturers in the midst of a competitive environment to raise prices and recover costs.
“To counter these costs, companies are moving their production sites to Asia and Latin America to take advantage of lower labor expenses,” explains Research Analyst Stephen Spivey. “For instance, in March, Honeywell Friction Materials announced plans to close factories in Florida and Tennessee to reduce its overall cost structure.”
The move to diminish pricing pressures will also aid manufacturers combat the growing threat posed by counterfeit goods. The sudden influx of low-cost alternatives from Asian manufacturers are likely to affect the cost structures and brand identities of major companies in the United States.
Nonetheless, this aftermarket is likely to witness sustained growth due to the aging of existing automobiles and the increasing total vehicle population. Manufacturers can effectively overcome the threat posed by counterfeits and the competitive market by focusing on quality rather than the cost.
North American Brake System Parts Aftermarket – Friction Parts is part of the Growth Partnership Services North American Automotive Aftermarket (9801) subscription offered by Frost & Sullivan’s Automotive & Transportation research group. It evaluates and offers revenue forecasts and unit sales for both brake shoes and pads in the United States and Canada. Pricing analysis and trends are included, along with vital information on distribution channel analysis.
The research service provides a market share analysis of major manufacturers. In addition to identifying drivers, restraints, and challenges, the study also looks at niche markets and key product trends. Executive summaries and analyst interviews are available to the press.
For more information, visit frost.com.
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