Increasing Age of Vehicles Sustains Growth in North

American Brake Rotors, Drums, and Calipers

Aftermarket

Research PREVIEW for the

North American Brake Rotors, Drums, and Calipers

Aftermarket

Sample of Key Highlights

Total manufacturer-level revenue will increase by 2.3% annually over the

2013-2020 period.

The average manufacturer-level price is expected to increase by only 0.2%

annually, reaching $14.48 per unit by 2020.

Warehouse distributors (WD) represent half of the total revenue (50.5% of

2013 revenue), but large retail chains continue to gain share.

Brake Parts Inc., CARDONE Industries, and Winhere Brake Parts were the

top suppliers in 2013.

Source: Frost & Sullivan analysis.

Drivers and Restraints The impact of market drivers will slightly outweigh restraints, resulting in low market growth.

Total Rotors, Drums, and Calipers Aftermarket: Key Market Drivers and Restraints,

North America, 2014–2020

Drive

rs R

estrain

ts

Drive

rs R

estrain

ts

Rising Raw Materials

and Transport Costs

Decreasing Service Life

of Parts

Severe Weather

Conditions

New SKUs

Enter the Aftermarket

Increased

Direct Sourcing Consolidation

of Distributors

Slow Economic

Growth

Growth of Private-label

Brands

Denotes long-term impact Denotes current impact Source: Frost & Sullivan

Key Conclusions and Future Outlook The large volume of low-cost imported products in the aftermarket makes it difficult to drive market

growth higher.

4

Parameters Current Future

Market Status

• Market fully recovered from the 2008 to

2009 financial crisis (economic recession)

that had caused vehicle owners to

decrease non-essential maintenance

activity

• Stable growth rates

• Stable growth of 2 to 4%

annually, based mainly on

increasing unit shipments

• Older vehicles supporting

demand growth

Pricing

• Rotor prices declining

• Drum prices up due to flat, declining

demand

• Caliper prices flat

• Prices to remain flat or slightly

decreasing for high-volume rotor

SKUs

• Prices up 1 to 2% annually for

drums and calipers

Technology • Increasing installation of all-disc brakes

• Use of drum brakes continues to decline

• Continued market share decline

of drum brake components

Source: Frost & Sullivan

Key Conclusions and Future Outlook (continued) Some suppliers are reducing the number of product lines they offer in order to increase profits.

5

Parameters Current Future

Product Positioning

• Rotors: two lines for most suppliers (economy

and premium). Original part may be sold as

premium.

• Drums: single line for most suppliers. OES

also carries original part for warranty.

• Most suppliers offer loaded calipers line (with

brake pads) in addition to a standard semi-

loaded offering.

• Brand consolidation, with more

manufacturers and distributors

offering a single rotors line

Key Competitive

Factors

• Price

• Quality

• All-makes-and-models coverage

• Price

• Quality

• All-makes-and-models coverage

Source: Frost & Sullivan

Details of the Full Analysis

The Full Analysis Features the Following Content

Section Slide Numbers

Executive Summary 4

Research Scope, Objectives, Methodology, and Background 16

Definitions and Segmentation 23

Market Overview 28

Total Brake Rotors, Drums, and Calipers Aftermarket –

• External Challenges: Drivers and Restraints 31

• Forecasts and Trends 45

• Market Share and Competitive Analysis 58

Brake Rotors Segment Analysis 62

Brake Drums Segment Analysis 72

Brake Calipers Segment Analysis 82

Conclusions and Future Outlook 92

Appendix 96

Research Aims and Objectives

Aim

The aim of this study is to identify the size and direction of the North American

passenger vehicle brake rotors, drums, and calipers aftermarket, and to identify growth

opportunities.

Objectives

• Calculate aftermarket size through primary research interviews with leading market participants

• Determine aftermarket direction over the next 5 to 7 years by analyzing market drivers and

restraints

• Understand the competitive structure of the aftermarket and identify the key success factors

• Identify the main competitors and analyze their market strategies

• Highlight shifting product preferences in the aftermarket and how they affect competitors’ growth

prospects

• Recognize competitive shifts within the distribution channels to determine which suppliers are best

positioned for growth

8

Product Segmentation

9

Brake Rotors Brake Drums

Economy

Premium

Total Brake Rotors, Drums, and Calipers

Aftermarket

Total Brake Rotors, Drums, and Calipers Aftermarket: Product Segmentation, North America, 2013

Semi-loaded

Others*

Brake Calipers

*Others include loaded, unloaded, and bare calipers.

Source: Frost & Sullivan

Market Structure

10

OES Auto Parts

Retailers

Internet/Mail

Order

OEM Exporter Parallel

Importer

New Car Dealer

Service Departments

Retailer Service

Bays

Offshore

Manufacturer

Mass

Merchandisers

US Parts

Manufacturer Remanufacturer

Programmed

Distribution Groups

Body Shops

Collision Parts

Distributors

Independent

Installers

Service Chain

Outlets

WD Service Chain

Distribution

Centers

• The 3-step structure evolves into a 2-step structure as large auto parts retail chains gain

power.

• Small jobbers and independent installers are increasingly acquired by larger competitors.

Step 1

Step 2

Total Brake Rotors, Drums, and Calipers Aftermarket:

Distribution Structure, North America, 2013

Vehicle

Owners

Step 3

Co-manufacturer

Source: Frost & Sullivan

New Car Dealer

Parts Departments

Jobbers

Key Distribution Groups Compared in this Study

11

Group OEMs

WD

NAPA, CARQUEST, Federated,

Aftermarket Auto Parts Alliance,

Automotive Distribution Network

OES

General Motors Service & Parts

Organization, Ford Customer Service

Division, Mopar

Group OEMs

Retail AutoZone, Advance Auto Parts, Canadian

Tire, Sears, Wal-Mart

Others

Includes co-manufactured parts (sold to

other manufacturers for resale in brake

kits, loaded calipers) as well as

Internet/direct mail/catalog sales

The distributor groups compared in this study are as follows:

Note: OEMs lists are not comprehensive. Source: Frost & Sullivan

Interested in Full Access? Connect With Us

Name Jeannette Garcia Corporate Communications

(+1) 210.477.8427

Jeannette.Garcia@frost.com

Research Authors

Stephen Spivey Aftermarket Program Manager Automotive and Transportation

http://www.frost.com/reg/people-finder-result.do?id=16576

Twitter Handle: @FS_Automotive

Facebook https://www.facebook.com/FrostandSullivan

LinkedIn Group https://www.linkedin.com/company/frost-&-sullivan

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Twitter https://twitter.com/Frost_Sullivan

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