North American Brake Pads and Shoes Aftermarket

  • August 2013
  • -
  • Frost & Sullivan
  • -
  • 104 pages

Increasing Vehicle Age and Rising Prices to Generate Stable Revenue Growth

This research service analyzes the brake pads and shoes (friction parts) aftermarket in the United States and Canada, which has recovered from the 2008–2009 financial crisis that caused vehicle owners to decrease non-essential maintenance activity. It includes unit shipment and revenue forecasts, pricing, distribution channel, and market share analyses, as well as market drivers and restraints. The base year is 2012 with forecasts from 2013 through 2019. Historical data is included (2009-2011). Products are segmented into Good, Better, Best, and by semi-metallic, ceramic, NAO, and carbon materials technologies. Future outlooks consider the affects of hybrid and electric vehicles entering the aftermarket.

Executive Summary—Key Findings

Increasing average vehicle age will result in more cars and light trucks needing brake repairs over the next X-Xyears, and parts will cost consumers more because of inflation and improving product quality.

Market Size/ Growth
•Unit shipments totaled X million in 2012 and are forecasted to reachX million in 2019 (CAGR X%).
•Revenue totaled $Xmillion in 2012 and are forecasted to reach $X million in 2019 (CAGR X%).

Drivers and Restraints
•Increasing average vehicle age drives unit shipments.
•General economic inflation and increased sales of premium parts drive prices.
•Increased price competition restrains revenue growth.

Revenue by Product Type
•Over the forecast period (2012-2019), the Good segment is expected to decline from X% to X% revenue;
•The Better segment is expected to increase from X% toX% revenue;
•The Best segment is expected to increase from X% to X% revenue.

Pricing Analysis
•The Average manufacturer-level price is expected to increase from $Xin 2012 to $X in 2019 (CAGR X%).

Distribution Channel Analysis
•WDs, remain the largest distribution channel X% of 2012 revenue.
•Retail channels are the fastest growing (X% of 2012 revenue).
•The OES channel is emerging with multi-brand, tiered-pricing strategies.

Market Share Analysis
•Federal-Mogul Corp., Affinia Under Vehicle Group, and Rayloc were the top suppliers.
• XtoX million pad sets were direct-sourced from Asian manufacturers.

Executive Summary—Percent of Revenue by Product Type and Distribution Channel

Products in the Better and Best segments and sold through auto parts stores will exhibit the highest growth.

•Although WDs still make up the largest sales channel, retail distributors such as AutoZone and Advance Auto Parts continue to gain share.
•Co-manufactured brake pads and shoes will decline as a distribution channel because of decreasing demand for loaded calipers.
•The revenue share of product lines in the Better and Best segments will increase, while the share of those in the Good will decline.
•This is a positive indicator for manufacturers and distributors seeking to enhance the profitability of their brake pads and shoes sales.

Executive Summary—Percent of Revenue by Brand Type and Pricing Analysis

Private-label products priced below the industry average of $X– per axle set will exhibit the highest growth.

•Brake pads are increasing in price because of rising raw materials costs and a growing preference for higher-quality product lines.
•Brake shoe prices will remain stable because of the low degree of differentiation in that category.
•Private label brands such as NAPA, ACDelco, and Duralast will continue to out-sell national manufacturer brands such as Wagner, Raybetos, and Bendix.
•Private-label brake pads and shoes cost an average of X to X% less than comparable national brand parts at the first point of sale.

Executive Summary—Comparative Analysis by Country

Revenue will grow at about the same rate in both countries.

United States
Product Mix
•Higher sales of discount (Good segment) parts
•Higher sales of Ultra-premium upgrades
•Higher sales of private-label brands
Distribution Channels
•High strength of retail auto parts chains such as Auto Zone, Advance Auto Parts, and O’Reilly/CSK
•Growing strength of Internet retailers (particularly Amazon.com and eBay)
Competition
•Federal-Mogul—market share leader with high share of Wagner brand in WD and retail channels
•About X% of friction parts* direct sourced by distributors from Asian manufacturers

Canada
Product Mix
•Higher percent of sales in Better and Best segments
•Fewer private labels
•Fewer overall brand choices
Distribution Channels
•Higher percent of sales in OES channel because of lower average vehicle age
•Fewer large retail chains
Competition
•Affinia Under Vehicle Group—market share leader with high share of ACDelco brand, which it private labels for General Motors
•Increasing share of parts direct sourced by distributors from Asian manufacturers

Executive Summary—Key Conclusions and Future Outlook

Future regulations banning copper from brake pads will increase the emphasis on raw materials technologies.

Parameters: Market Status
Current:
•Market fully recovered from the 2008–2009 financial crisis (economic recession) that had caused vehicle owners to decrease non-essential maintenance activity
•Increasing growth rates
Future:
•Continued growth based on increasing average vehicle age and decreasing sales of discount parts
•Stable growth rates

Parameters: Pricing
Current:
•Prices increasing slowly as aftermarket decreases inventories of discount parts
•Competition for key retail accounts keeping prices from rising faster
Future:
•Higher rate of price growth caused by continued decline of discount parts
•Weakness of US dollar making imported products more expensive

Parameters: Technology
Current:
•Increasing installation of all-disc brakes
•Use of drum brakes continues decline
Future:
•Continued market share decline of drum brakes
•Increased penetration of regenerative braking systems as hybrids and electric vehicles enter the aftermarket
•Continued development of brake-by-wire systems

Parameters: Product Positioning
Current:
•Most manufacturers still using Good/Better/Best taxonomy
•Increasingly difficult to differentiate between ceramic, NAO, and low-met friction products
Future:
•Declining use of Good/Better/Best to differentiate products
•Increased specialization and use of other product features (e.g., application or material type) for differentiation

Parameters: Key Competitive Factors
Current:
•All makes and models coverage required to gain distribution
•Customer service and after-sales support
•Limited lifetime warranty coverage
Future:
•Ability to develop products that meet copper-free regulations (R&D) increase importance

Key Questions this Study Will Answer

• What is the short-to-medium term outlook for replacement brake pads and shoes sales?
• Which market segments are growing the fastest and why?
• Which distribution channels are growing the fastest and why?
• How are various products priced and positioned in the aftermarket?
• How will new regulations and technologies impact demand for replacement brake pads and shoes?

Table Of Contents

Table of Contents

1. Executive Summary
2. Research Scope, Objectives, Methodology, and Background
3. Definitions and Segmentation
4. Market Overview
5. Total North American Brake Pads and Shoes Aftermarket
• Industry Challenges
• External Challenges: Drivers and Restraints
• Forecasts and Trends
• Market Share and Competitive Analysis
6. Brake Pads Segment
7. Brake Shoes Segment
8. Conclusions and Future Outlook
9. Appendix

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