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More Cars, More Miles Spark North American Starter and Alternator Aftermarket

July 31, 2001

As the automotive industry continues to experience high sales, car owners are using their vehicles for shorter and more frequent trips, causing engine components to wear out quickly and increasing aftermarket demand for starters and alternators.

According to new analysis by Frost & Sullivan (www.transportation.frost.com), "North American Starter and Alternator Aftermarket," the total market reached an estimated $1.48 billion in 2000 and is expected to increase to $1.66 billion in 2007.

Despite the opportunities for new aftermarket sales, market participants are facing reduced profit margins. National retailers are usurping market share, gaining buying power, and forcing suppliers to curtail prices.

"Retailers favor large remanufacturers that can supply in volume, operate efficiently, and meet retailers' low price expectations," says Frost & Sullivan Industry Analyst Matt Vestervelt. "Some remanufacturers are willing to take losses on sales, and some suppliers are using price to undercut competitors."

However, by identifying which products are most in demand and command the highest prices in the aftermarket, smaller regional remanufacturers will have a strong chance to sustain market share against national companies, according to Vestervelt.

"With vehicles becoming more complex to repair, the 'do it-for-me' market has grown," says Vestervelt. "To best serve their customers and minimize bounce-back replacement work, professional installers are demanding remanufactured alternators and starters of the highest quality."

At stake is installers' time and money, as well as the reputation of the remanufactured parts industry, according to Vestervelt. "Low-quality units that fail the consumer in a short time will cause the consumer to think twice before buying additional remanufactured components for their vehicle," he said.

Frost & Sullivan presents the 2001 Market Engineering Awards to companies that have worked diligently to make a positive contribution to the automotive starter and alternator aftermarket. These market specific award are presented to: the Automotive Aftermarket Industry Association (AAIA), CarParts Technologies, Delco Remy International Inc., Excel Automotive, Visteon Corporation, and Unit Parts Company.

About Frost & Sullivan

Frost & Sullivan specializes in international strategic market consulting and training. This ongoing research is part of the Automotive Aftermarket Subscription, which includes market analyses on the Remanufactured Engines and Transmission Aftermarket.

Frost & Sullivan also offers custom consulting to a variety of national and international companies.

For more information, visit www.transportation.frost.com.

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