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New Unit Programs Hold Revenue Generation Potential for Remanufacturers

Although remanufactured units accounted for approximately 92.3 percent of the revenues in the North American starters and alternators aftermarket in 2005, current trends indicate that this share will marginally decline throughout the forecast period as new units gradually gain a foothold in the market.



's8220;New starters and alternators accounted for about 7.7 percent of the total aftermarket in 2005, which is likely to increase to 9.2 percent in 2012,'s8221; says Frost & Sullivan Industry Analyst Sanjay Vasudevan. 's8220;The future growth rate of these units is likely to be relatively low, with revenues projected to increase from $77.2 million in 2005 to $82.9 million in 2012, and will take place at the expense of remanufactured units.'s8221;



New analysis from Frost & Sullivan North American Starters and Alternators Aftermarket, finds that this aftermarket earned revenues of $1.01 billion in 2005 and is likely to reach $903.6 million in 2012.



If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants an overview of the latest analysis of the North American Starters and Alternators Aftermarket, then send an e-mail to Tolu Babalola, Corporate Communications, with the following information: full name, company name, title, telephone number, e-mail address, city, state, and country. The brochure will be e-mailed to you upon receipt of this information.



The projected growth of new units over remanufactured ones does not necessarily imply that total unit shipments will increase, but that new starters and alternators will eat into the share of remanufactured units.



In such a situation, many remanufacturers have started offering new units as part of their product portfolios to have more comprehensive product lines. New unit programs represent fresh revenue generation opportunities for remanufacturers that position these products as a premium offering.



's8220;While major remanufacturers are gearing up to be full-line suppliers with product diversity by offering new units alongside remanufactured ones, the high degree of price competition posed by large retailers and distributors creates a challenging situation for them,'s8221; says Vasudevan. 's8220;This is likely to lead to widespread consolidation among remanufacturers.'s8221;



As a step toward becoming more competitive, remanufacturers are looking for ways to reduce the core charges associated with remanufactured units. This has become essential in the face of growing competition posed by the influx of new products entering North America from low-cost Asian countries such as China, India and Korea.



The advantage of new units is that they do not carry core charges, unlike remanufactured units. Moreover, new units produced by offshore manufacturers have improved considerably in terms of quality and reliability. Together, these factors are forcing remanufacturers to reduce core charges in order to reposition their units as a strong value proposition to retailers and distributors.



While some remanufacturers have started providing relief on the core deposits to distribution channel participants, others are taking steps to own the cores. Efforts to enhance the quality of remanufactured products by investing in test equipment and acquiring certification for certain quality standards have also been seen.



North American Starters and Alternators Aftermarket, part of the North American Automotive Aftermarket Subscription, provides a comprehensive assessment by outlining revenues and shipments in different market segments as well as analyzing key market drivers, restraints, trends, and competitive structure. In this research service, Frost & Sullivan'ss expert analysts thoroughly examine the following segments of the starters and alternators aftermarket: new and remanufactured. Analyst interviews with the press are available.



Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company'ss industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.



North American Starters and Alternators Aftermarket

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