Auto Service World
News   September 4, 2002   by Auto Service World

Distributorless Ignitions Will Drive Ignition Parts Sales

Increasingly prevalent distributorless systems are set to drive the growth of the automotive ignition parts aftermarket in North America, says a new analysis.
Since their use is likely to generate greater demand for coils, engine control units (ECUs), and spark plugs, research firm Frost & Sullivan says that revenues are projected to reach $1.70 billion U.S. by 2008. In 2001, this market totaled $1.24 billion U.S.
In its study, "North American Automotive Ignition Parts Aftermarket," the research firm maintains that as the number of vehicles on the road and the need to frequently replace parts in “older” vehicles increases, the market will find opportunities for expansion.
The intensity of vehicle usage and mandatory safety and environmental inspections enforced by the federal government are expected to further stimulate demand, as automobile owners upgrade their auto parts in order to meet these standards.
“Aftermarket ECUs are just entering the growth stage of the product life cycle,” says Frost & Sullivan research analyst Alfonso Corredor. The engine control units segment represents a significant growth area for this market and is expected to generate higher revenues, especially since units installed during the 1990s are likely to reach the end of their life spans now. An important trend in this market is the use of the two-step distribution channel, in which auto parts retailers and programmed distributors buy directly from manufacturers. Participants striving to increase sales must endeavor to create better relationships with these retailers and distributors.
“Maintaining an engineering department capable of developing products in a timely way is one of the key factors for success in the aftermarket,” says Corredor.
The growing inclination among professional installers and vehicle owners to buy parts from the original equipment service (OES) channel threatens traditional aftermarket manufacturers to some extent. In many cases, OES outlets offer convenient and low-priced maintenance packages.
“To overcome this challenge, manufacturers have to effectively train installers and invest in advertising to convince them as well as vehicle owners about the value of their products,” adds Corredor. Participants must continuously innovate and improve offerings to remain competitive and to keep up with the technological developments in ignition systems. Product innovation provides the base for increasing prices that are likely to result in higher revenues.

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