Increasing Number of Prime Replacement Age Vehicles Drives Remanufactured Engine and Transmission Sales

Mumbai, Maharashtra, India

The increasing number of prime replacement age vehicles, combined with technological improvement and increasing cost of raw materials and labor, will drive revenues of the total aftermarket for remanufactured engines and transmissions. The salvage market provides used engines and transmissions at lower prices; however, this is emerging as a threat to remanufacturers, since it is witnessing consolidation and organization.

New analysis from Frost & Sullivan (www.automotive.frost.com), North American Remanufactured Engine and Transmission Aftermarket, reveals that the market earned revenues of $8.38 billion in 2006 and estimates this to reach $11.12 billion in 2013.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the North American Remanufactured Engine and Transmission Aftermarket, then send an e-mail to Ravinder Kaur, Corporate Communications, at ravinder.kaur@frost.com with your full name, company name, title, telephone number and e-mail address. An overview will be sent to you via e-mail upon receipt of the above information.

"High price growth in the relatively small diesel engine segment will not be able to offset the growth that the large automatic transmission segment is expected to experience," says Frost & Sullivan Industry Manager Avijit Ghosh. "Therefore, the remanufactured transmission segment is expected to grow more than the remanufactured engine segment."

Scrappage rates, due to vehicles wearing out, have decreased because of improved vehicle quality. The combined effect of increasing sales and decreasing scrappage rates has led to more vehicles in the prime engine replacement age of four to nine years, which will drive the remanufactured engine and transmission aftermarket.

The challenge of obtaining cores for older model engines and transmissions may heighten; OE remanufacturers, in collaboration with automakers, have a core collection program in which automakers ensure the return of all cores. In addition, the environmental protection agency (EPA) mandates a 100 percent core return rate; failure to comply will cause the automaker to be penalized. This could make it difficult for aftermarket remanufacturers in obtaining cores in the future.

"Vehicles that may not last much longer and those in immediate need of parts turn to salvage yards that have used transmissions in stock," says Ghosh. "However, remanufactured units carry longer warranties, although they may not be available at every distributor site when a vehicle owner approaches for replacement."

With technological developments, it is difficult for used engine and transmission suppliers to warrant their engines and transmissions without correct quality information on those units. This provides opportunities to remanufactured engine and transmission suppliers to fight competition from the salvage (used) market.

North American Remanufactured Engine and Transmission Aftermarket is part of the Automotive & Transportation Growth Partnership Services program, and it provides unit shipment and revenue forecasts, revenues by product type, distribution channel analysis, and market share analysis among others. In this study, Frost & Sullivan's expert analysts thoroughly examine the following markets: Remanufactured Gasoline Engine, Diesel Engine, Automatic Transmission, and Manual Transmission. 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's 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. For more information, visit www.frost.com.

North American Remanufactured Engines and Transmissions Aftermarket
N0B8

Contact:

Ravinder Kaur
Corporate Communications - South Asia, Middle East
+91 (044) 4204 4760
ravinder.kaur@frost.com

Vanessa Quezada
Corporate Communications - North America
+1 210 477 8427
vanessa.quezada@frost.com

Michael Banks
Corporate Communications - Europe
+44 (0)20 7915 7876
michael.banks@frost.com

Source: Frost & Sullivan (Business Wire India)

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