Abstract
Suppliers Seek Offshore Substitutes to Remain Profitable
With the aftermarket for fuel filters on the decline and competition within
the industry getting intense, companies are undertaking several measures to prop
up their decreasing profit margins. Filter suppliers are at a disadvantage since
their large retailer clients exert enormous bargaining power – suppliers
thus need to offer competitive prices to retain their customers. Therefore, they
are sourcing major shares of their fuel filters from offshore manufacturers,
which are less expensive. This mounting dependence on overseas companies brings
into focus the management of the supply chain. Manufacturers are doing away with
‘middlemen’ – the importers – through whom they earlier sourced
their products, and are directly approaching the overseas manufacturers. This
has helped them anchor prices while simultaneously boosting profit margins.
This Frost & Sullivan research analyzes the North American aftermarket
for fuel filters, examining competitors, revenues, prices, and unit shipments.
It also identifies key challenges facing the industry, and the drivers and
restraints upon growth.
Shift from Carbureted to Fuel Injected Engines Supports Price Increases
"The slow phasing out of carbureted engines from the North American
vehicle population bolsters revenue growth," says the author of the study.
"This is because filters for fuel injected engines typically cost several
times more than those for carbureted vehicles," he adds. These filters also
function under higher pressure and are required to be sturdier than the filters
on carbureted engines.
As aftermarket demand for the more-expensive fuel filters in fuel injected
vehicles steadily increases, the average unit price of fuel filters naturally
rises. Companies that manufacture longer-lasting premium-grade stainless steel
filters also are able to command higher prices.
Technicians Drive Fuel Filter Replacements
With the migration to fuel injected vehicles, fuel filters have become more
intricate, in keeping with the complex workings of new engines. Consequently,
their replacement is now mostly carried out by technicians at dealerships or
garages. This places technicians in an advantageous position to play a
significant role in driving fuel filter industry revenues. They can be attentive
in checking filters and make sure that these are replaced according to
recommended replacement or maintenance schedules. Thus, technicians can be
product advocates of fuel filters, which belong to a product category that
suffers from underperformed maintenance.
"Major automotive parts retailers also are selling fuel filters to
customers as part of an upgrading package that would have customers change
ignition and fuel-related parts at the same time," notes the analyst. As
dealerships and independent retailers work toward maximizing their revenues,
they help in boosting the industry’s total fuel filter unit shipments.
Table of Contents
- EXECUTIVE SUMMARY
- TOTAL NORTH AMERICAN FUEL FILTER AFTERMARKET
- Overview and Definitions
- Market Overview
- Challenges Facing the Fuel Filter Aftermarket
- Market Engineering Analysis
- Market Drivers and Restraints
- Market Drivers
- Market Restraints
- Quantitative Analysis
- Demand Analysis
- Unit Shipment and Revenue Forecasts
- Trends by Geographic Region
- Pricing Analysis and Trends
- Competitive Analysis
- Competitive Structure
- Mergers Acquisitions and Competitive Changes
- Market Share Analysis
- Market and Technology Trends
- Distribution Channel Analysis
- Frost & Sullivan Award
- Market Penetration Leadership Award
- APPENDIX
- Acronyms and Abbreviations
- Acronyms and Abbreviations
- Equations
- Conversion Equations
- Compound Annual Growth Rate
- Currency Exchange Rates
- DECISION SUPPORT DATABASE
- Decision Support Database
- Light Vehicles in Operation
- Light Vehicle Sales
- Passenger Vehicle Platforms
- Light Truck Vehicle Platforms
- Automotive Technician Forecast
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