Oversupply Leads to Lower Profits

New car parts made to last longer have led to an oversupply of suspension parts.
A new analysis conducted by Frost and Sullivan, an international growth consultancy, revealed revenues in the North American Suspension Parts Aftermarket will decline from $592.7 million U.S. in 2002 to $410.6 million U.S. in 2009.
This situation can be turned around says Frost and Sullivan industry analyst Christopher Chen.
Ride control parts such as dampers and springs comprise a significant piece of the maintenance market. Industry growth can be propelled by companies motivating technicians and consumers to improve ride safety and extend a vehicles life by performing justified maintenance on these important parts of a vehicle.
Ride control parts such as dampers and springs deteriorate imperceptibly, and comprise a significant proportion of the total underperformed maintenance market. According to the study, serving this pool of undone maintenance represents a promising opportunity for manufacturers and distributors to propel industry growth. Companies’ challenge is to motivate technicians and consumers to perform justified maintenance on important suspension parts. Doing so can improve ride safety and extend a vehicle’s life.
"Given the volume of vehicles in North America even capturing a fraction of the ‘underperformed maintenance’ segment can boost industry revenue dramatically," says Chen.
Parts manufacturers face improving parts quality and consumers buying new rather than older vehicles. They will also have to manage inventories better since a flood of parts in the market usually drives down unit prices.
The coming years should be both challenging and, if properly approached, promising for innovative companies, says the report.