Scope and Methodology

• Market Definition
  • Replacement Parts and Equipment
  • Accessories
  • Chemicals
  
  
• Basic Market Distinction: OE vs. Replacement Parts
• Report Methodology

Market Overview


• Market to Approach $135 Billion in 2006
• Table 1-1: U.S. Retail Sales of Automotive Aftermarket Products by Category, 1997-2006 (dollars): Replacement Parts/Equipment, Accessories, Chemicals
• Replacement Parts Are Bulk of Business
• Figure 1-1: Share of U.S. Retail Sales of Automotive Aftermarket Products by Category, 1997 vs. 2006 (percent): Replacement Parts/Equipment, Accessories, Chemicals
• The General Outlook: Continued Steady Growth
• Hundreds of Companies Compete
• Pressure On Across All Market Categories
• Restructuring of Distribution Continues
• DIY and Service Businesses Merging
• Independent Auto Parts Stores Survive
• Average Household Spends $624 on Vehicle Maintenance and Repairs

Replacement Parts and Equipment


• Sales to Surpass $104 Billion in 2006
• Hard Parts Account for More Than Three-Quarters of Replacement Category Sales
• Proliferation of Makes, Models a Plus for Hard Parts
• Popularity of Light Trucks, SUVs Boosts Tire Sales
• Growth in Electronic Components Demands More Powerful Batteries
• Leading Hard Parts Specialists and Generalists
• Six Major Tire Marketers
• Three Dominant Battery Manufacturers
• Acquisitions a Major, If Risky, Survival Strategy
• Trends in Hard Parts Follow OE Market
• Move to Two-Step Distribution in Hard Parts
• Consumer Purchasing Trend

Accessories


• Sales to Top $18 Billion by 2006
• Electronics More Than One-Quarter of Accessories Sales
• Accessories Market Set to Rebound from Economic Downturn
• “Mobile Theaters” Show Rapid Growth
• Computer Technologies Infiltrate the Car
• Satellite Radio Blasts Off
• Automotive Accessories Market Leaders
• A Shifting Marketerscape
• Telematics Market Could Soar to $7 Billion
• Vehicle Electronics Market Driven by Convergence
• Radar Detector Marketers Lead in Advertising
• Accessories Boast the Broadest Distribution
• Truckers at 75% of Specialty Accessories Market

Chemicals


• Chemicals Aftermarket to Reach $12 Billion in 2006
• Functional Subcategory Claims Four-Fifths of Auto Chemicals Sales
• Motor Oil Has Steady Growth Prospects
• Slow Growth Expected for Fluid Sales
• Environmental Regulations Less a Boon to Additive Sales Than Anticipated
• New Easy-Use Appearance Products Drive Growth
• Hundreds of Marketers Compete in Chemicals
• Pennzoil-Quaker State, Valvoline, Castrol Lead in Functional Chemicals
• Clorox, Turtle Wax Lead in Appearance Chemicals
• Heat Is On in Automotive Chemicals
• Seeking Strength in Size
• Clorox’s STP Has Edge on Competition
• Field Crowded with Newcomers and Line Extensions
• New Appearance Products Predominate Among Intros
• Automotive Chemicals Enjoy Wide Distribution
• Motor Oil Replacement Is Top DIY Chemical Activity

II. The Products

Introduction

• Market Definition: Automotive Aftermarket Products
• Basic Market Distinction: OE vs. Replacement Parts
• Three Product Categories

Replacement Parts and Equipment


• Category Scope: Hard Parts, Tires, and Batteries
• Scope of Subcategory: Hard Parts
  • Engine
  • Fuel System
  • Electrical System
  • Cooling System
  • Exhaust System
  • Drive Train
  • Suspension System
  • Braking System
  • Other
  
  
• Improved Quality of Hard Parts
• Remanufactured Parts
• Metals and Other Materials Used in Hard Parts
• Scope of Subcategory: Tires
• Three Basic Types of Tires
  • Bias-Ply Tires
  • Bias-Belted Tires
  • Radial Tires

• Radials the Virtually Unanimous Choice
• High-Performance Tires Emphasize Traction
• Treads Are Classified by Weather Compatibility
• Retreads Now Confined Mostly to Truck Market
• Raw Materials Increasingly High-Tech
• Recycling and Disposal
• Tire Rating and Labeling
  • Speed Ratings
  • Traction Ratings
  • Temperature Resistance Ratings
  • Treadwear Ratings
  
  
• Scope of Subcategory: Batteries
• Battery Design and Materials
  • Cold-Cranking Power
  • Warm-Cranking Power
  • Reserve Capacity
  
  
• Batteries More Sensitive to Heat Than Cold
• Trend to Maintenance-Free Batteries
• Dual-Capacity Batteries
• Warranties Increase from Five Years to Seven
• Battery Recycling

Accessories


• Category Scope: 13 Segments
• Products Not Included

Chemicals


• Category Scope: Functional and Appearance Chemicals
• Motor Oil
  • Oil Base Most Important Component
  • Motor Oil Ratings
  • Refined vs. Synthetic Motor Oils
  • Recycling Motor Oil
  
  
• Automotive Fluids
  • Antifreeze/Coolant
  • Transmission Fluid
  • Brake Fluid
  • Power Steering Fluid
  • Air Conditioning Fluid
  • Differential Fluid
  • Lubricating Greases
  
  
• Automotive Additives
  • Fuel Additives
  • Oil Additives
  • Engine Treatments
  • Sealants
  
  
• Environmental Regulations Affect Functional Chemicals
• Appearance Chemicals
  • Waxes and Polishes
  • Touch-Up Paints and Body Fillers
  • Protectants
  • Washes

III. The Market

• Figure 3-1: U.S. Retail Sales of Automotive Aftermarket Products, 1997-2001 (dollars)

Market Size and Growth

• Methodology for Sales Estimates
• Market Nears $120 Billion in 2001
• Table 3-1: U.S. Retail Sales of Automotive Aftermarket Products, 1997-2001 (dollars)
• Replacement Parts a $92.6 Billion Category
• Accessories Sales Approach $14 Billion
• Sales of Chemicals Approach $10 Billion in 2001
• Table 3-2: U.S. Retail Sales of Automotive Aftermarket Products by Category, 1997-2001 (dollars): Replacement Parts/Equipment, Accessories, Chemicals
• Replacement Parts Are Four-Fifths of Business
• Hard Parts Account for More Than Three-Quarters of Replacement Category Sales
• Figure 3-2: Share of U.S. Retail Sales of Automotive Aftermarket Replacement Parts and Equipment by Subcategory, 1997 vs. 2001 (percent): Hard Parts, Tires, Batteries
• Electronics More Than One-Quarter of Accessories Sales
• Figure 3-3: Share of U.S. Retail Sales of Automotive Aftermarket Accessories by Type, 2001 (percent): 5 Types, All Other
• Functional Subcategory Claims Four-Fifths of Auto Chemicals Sales
• Figure 3-4: Share of U.S. Retail Sales of Automotive Aftermarket Chemicals by Subcategory, 1997 vs. 2001 (percent): Functional, Appearance

Factors to Market Growth


• The General Outlook: Continued Steady Growth The Big Plusses: Increasing Size and Age of U.S. Vehicle Fleet; More Miles Being Driven
  • Aging of U.S. Vehicle Fleet
  • Mileage per Vehicle Continues to Increase
  
  
• Cars as “Second Home” a Boon to Accessories, Mobile Theaters
• Light Trucks an Ever-Growing Presence in U.S. Vehicle Fleet
• Light Trucks Drive New Car Sales
  • Light Trucks Dominate Aftermarket Accessory Sales
  
  
• Proliferation of Makes, Models a Plus for Hard Parts
• Younger Sport Compact Owners Avid Accessorizers
• Used Car Owners Have More Upgrade Options
• Leasing Option Slows
• AAIA Launches Campaign to Encourage Increased Maintenance
• Alliance with Motorsports Buoys Aftermarket
• Factors Favoring DIY Sales
  • Light Truck and SUV Popularity Boosts DIY Activity
  • Growth of Hispanic Population a Plus for DIY Sector
  • Advancing Technology: Minuses and Pluses
  • Imports Less of a Deterrent to DIY

• Factors Favoring DIFM Sales
• Growth in Electronic Components Demands More Powerful Batteries
• New Autosound Technologies on the Rise
• New Technologies Also Driving Telematics, Security
• Will Fuel Cells Power the Cars of the Future?
• Government Supporting Development of Fuel-Cell Vehicles
• Gas/Electric Hybrid Vehicles an Intermediate Step?
• Leading Tiremakers Raise Prices in 2002
• Synthetic Motor Oils a Question Mark
• Possible Adverse Effect of New Regulations Remains Concern
• Durability of Parts and Equipment a Dampening Factor, Along with Fewer Parts
• Extended Dealer Warranties a Negative Factor
• Longer Drain Intervals for Motor Oil on Newer Vehicles
• Smaller Share of Owners Care for Vehicle Appearance Themselves
• Competition Puts Pressure on Prices
• Figure 3-5: Projected U.S. Retail Sales of Automotive Aftermarket Products, 2001-2006 (dollars)

Projected Market Growth


• Market to Approach $135 Billion in 2006
• Table 3-3: Projected U.S. Retail Sales of Automotive Aftermarket
  • Products by Category and Subcategory, 2001-2006 (dollars): Replacement Parts and Equipment/Hard Parts, Tires, Batteries; Accessories; Chemicals/Functional and Appearance
  • Parts/Equipment Category: 2%-3% Annual Growth
  • Accessories Category to Exceed $18 Billion by 2006
  • Appearance Products Continue to Outpace Functional Chemicals

IV. The Marketers

Marketer Overview

• Hundreds of Companies Compete
• Cross-Category Marketers Remain Few, But Specialization Is Waning
• Marketers Expand Within Parts/Equipment Through Acquisitions
• Functional Chemicals Marketers Acquire Appearance Marketers
• Appearance Chemicals Marketers Return the Favor
• Big Three Automakers Dominate Hard Parts Subcategory
• GM Parts-Making Spinoff Delphi Also Competes
• Ford Spinoff Visteon Targets Aftermarket
• Leading Hard Parts Specialists and Generalists
• Six Major Tire Marketers
• Three Dominant Battery Manufacturers
• Automotive Accessories Market Leaders
• Pennzoil-Quaker State, Valvoline, Castrol Lead in Functional Chemicals
• Clorox, Turtle Wax Lead in Appearance Chemicals
• Table 4-1: U.S. Automotive Aftermarket Products: Selected Leading Marketers and Brands, 2002 (95 Marketers and Their Brands)

Competitive Overview


• Pressure On Across All Market Categories
• Replacement Parts and Equipment
  • Automakers Enjoy Big Advantage in Hard Parts
  • Other Hard Parts Marketers Have Other Advantages
  • Acquisitions a Key, But Risky, Survival Strategy
  • Intense M&A Activity May Have Peaked
  • The Perils of Acquisition
  • Accidents Threaten Firestone Brand’s Future
  • Tire Marketers the Most Active at Retail and as Advertisers
  • Competition and Cooperation in a Global Market
  • Parts and Equipment Marketers Slim Down to Fatten Bottom Line
  • Parts Proliferation a Continuing Problem
  • The Trend to “Preferred Vendors”
  
  
• Accessories
  • A Dynamic, Multifaceted Category
  • Pioneer First in Auto Sound/Video/Multimedia, But with Plenty of Competition
  • Audiovox Competes in Many Areas of Vehicle Electronics
  • Electronic Security Arena Controlled by Two Companies
  • Whistler Leads Ranks in Radar Detectors
  • American Racing Leads Crowded Custom Wheels Segment
  • Truck Accessories Segment Loosely Defined But Still Booming
  • Lund Leads in General Truck Accessories, Penda Strongest in Pickups
  • Trico Creates Windshield Wiper Market, Stays on Top
  
  
• Chemicals
  • Marketers Face Incursions from Several Sides
  • Independent Chemicals Marketers Seek Strength in Size
  • Functional Chemicals Marketers Advertise Heavily
  • Motor Oil Segment Is Highly Price-Driven
  • Prestone Dominates Fluids Segment But Future Is Unclear
  • Clorox’s STP Paces Additives Segment
  • Appearance Subcategory Crowded with Newcomers, Line Extensions

Marketer Profiles: Automotive Replacement Parts and Equipment


• Dana Automotive Aftermarket Group
  • Dana Automotive Aftermarket Group Formed in 1998
  • Dana’s Future Looks Promising
  • Raybestos Is #1 Brake Parts Brand
  • Wix Is Important Filters Brand
  • Dana Is Exploring Fuel Cells

• General Motors Service Parts Operations
  • ACDelco Is Brand for All Makes, All Models
  • ACDelco a Leader in Hard Parts
  • ACDelco #3 in Battery Aftermarket
  • GM Includes ESP Technology in Many New Cars
  • GM Spins Off Delphi
  • Delphi Creates Aftermarket Division
  • Limited Competition Between Delphi and ACDelco
  • GM Is an Electric Vehicle Pioneer
  • GM Develops Hybrid Vehicles
  • One Step Closer to Fuel Cell Vehicles
  
  
• Goodyear Tire & Rubber Co.
  • #1 U.S. Replacement Tire Marketer
  • #1 in North American OE Tire Market
  • #1 in Replacement Parts Advertising
  • Fortera Is Newest Goodyear Brand
  • Kelly’s Safari Signature Debuts in 2002
  • EMT Tires Are Goodyear’s Run-Flat Entry
  • Sharing Run-Flat Technologies
  • A Million EMTs to Sell in 2002
  • Banking on Growth of Run-Flat Market
  • Polyurethane-Based Tires
  
  
• Johnson Controls, Inc.
  • #1 U.S. Marketer of Replacement Batteries
  • Many Retail Outlets Carry Johnson Controls Batteries
  • Johnson Controls Battles Exide for Sears DieHard Contract
  • Interstate Batteries Originate at Johnson Controls
  • Acquisition of Optima Brand in 2000
  • A Pioneer in 42-Volt Systems
  • Johnson Controls Also Makes Branded Car Parts
  
  
• Michelin North America, Inc.
  • #2 U.S. Replacement Tiremaker
  • #2 in North American OE Tire Market
  • Cutting Jobs
  • Reduced Ad Spending
  • Higher Tire Prices
  • Run-Flat Alliance with Goodyear
  • Michelin’s Current Run-Flat Offerings
  • High-Performance Tires a Growing Segment for Michelin
  • T3 Certified Tire Centers Connected with Michelin

  Marketer Profiles: Automotive Accessories
  

  • American Racing Custom Wheels
  • OEM Cutbacks Force Plant Closings, Shift to Aftermarket
  • Quality and Variety Keep American Racing on Top
  • RO_JA, Montegi, and Epic
  • American Racing Hits the Road with Unique Marketing Tour
  • American Racing Boasts Numerous Ties to Racing
  
  
• Audiovox Electronics Corp.
  • A Mobile Video Leader
  • Autosound a Growing Area
  • Strong in Security
  • Code-Alarm Acquisition Expands Security Lineup
  • Navigation Entries
  
  
• Lund International, Inc.
  • Expansion Key to Lund’s Success
  • Lund Brand Offers Variety of General Accessories
  • Deflecta-Shield Another Respected Brand
  • Auto Ventshade Markets Most Popular Bug Deflectors
  
  
• Pioneer Electronics (USA), Inc.
  • Innovations Extend from Home to Car
  • Environment a Corporate Concern
  • Autosound Remains Core Focus
  • Mobile Video a Growing Focus
  • Navigation Integration
  • New Technology Microsoft-Friendly
  
  
• Snap-On Corp.
  • Diversity, Acquisition Keys to Success
  • From Classic Tools to High-Tech Equipment
  • Strong on the Web
  • Make-A-Wish Sponsorship
  • Environmental Impact a Constant Concern

  Marketer Profiles: Automotive Chemicals
  

  • Pennzoil-Quaker State Co.
    • Acquisition by Shell Would Put P-QS on Equal Footing with Competitors
    
    
  • Valvoline Co.
    • From NASCAR Sponsor to Racing Team Owner
    
    
  • Castrol North America Holdings, Inc.
  • Clorox Co. (Armor All, STP)
    • STP Maintains Its Edge in Additives
    
    
  • Turtle Wax, Inc.

V. Marketing, Retail, And Consumer Trends

Marketing and New Product Trends

• Electronics Changing the Hard Parts Market
• Change to 42-Volt Systems Just a Matter of Time
• Run-Flat Tires Seem Here to Stay
• Longer-Lasting, All-Season, and High-Performance Tires
• Embattled Bridgestone/Firestone Dominates Recent Tire Introductions
• Vehicle Electronics: Telematics Market Could Soar to $7 Billion
• Vehicle Electronics Market Driven by Convergence
• Autosound Marketers Targeting Women
• Size Matters in Custom Wheels
• Chemicals: Motor Oil Marketers Push Synthetics
• $10 Million Campaign Supports Mobil 1 with SuperSyn Launch
• Wipes Are Most Popular New Appearance Chemical Format
• Tire Dressing Continues to Attract New Entries
• Table 5-1: The U.S. Automotive Aftermarket Products Market: Selected New Product Introductions, 2001-2002

Distribution


• A Complex Structure
• New Trends Emerge in 1970s and 1980s
• Restructuring Continues
• Warehouse Distributors
• The Top 10 Wholesaler/Retailers
• Program Distributors
• NAPA—The Largest Program Distributor
• Distribution to Retailers

Retail Structure


• Preliminary Distinction: DIY vs. DIFM
• DIY and Service Businesses Merging
• Servicer-Oriented Retail Outlets
• New Car Dealerships
• Service Specialists’ Role Increasing
• Tire Dealers Expand Service Offerings
• Service Stations’ Role in Aftermarket Shrinking
• DIY-Oriented Retail Outlets
• Auto Parts Stores
• Mass Merchandisers and Warehouse Clubs
• Sears a Leading Retailer/Service Installer
• Performance Shops
• Food Stores, Drugstores, Convenience Stores

At the Retail Level


• AutoZone the Leading Auto Parts Chain; Advance Auto Narrows Gap
• Consolidation and Attrition Continue to Reshape Auto Parts Ranks
• WDs and Jobbers Sue Auto Parts Chains Over Price Discrimination
• Independent Auto Parts Stores Survive
• Hard Parts Give Auto Stores Edge in DIY
• Auto Parts Stores Carry More Hard Parts
• Bridgestone/Firestone Operates Largest Tire Chain
• Table 5-2: Leading U.S. Tire Retailers by Number of Outlets, 2001 (number): 10 Tire Dealers
• Wal-Mart Ranks Among Leaders in Tire Sales
• Accessories Boast Broadest Distribution, Huge Array
• Automotive Chains Hold Edge in Accessories; Mass Merchandisers, Warehouse Clubs Lead in Chemicals
• General Repair Shops Are Leading Servicer-Oriented Channel
• Trend to Limit Number of Vendors
• Merchandising, Margins, and Turns

Consumer Overview


• Average Household Spends $624 on Vehicle Maintenance and Repairs
• $70K and Over Households Average $1,115 in Expenditures on Maintenance and Repairs
• The Household Composition Factor
• High Expenditures and Percentage of Expenditures for Households in the West
• Mixed, Male Demographics for Direct Purchasing of Auto Parts
• Table 5-3: Average Total Dollar Expenditures on Vehicle Maintenance and Repairs, 1995-2000 (dollars)
• Table 5-4: Average Expenditures on Vehicle Maintenance and Repairs by Demographic Characteristics: Total Dollars Spent and Percent of Household Expenditures (dollars and percent)
• Table 5-5: Overview of Yearly Direct-Order Purchasing: Auto Products, 2001 (percent and number)
• Table 5-6: Demographic Characteristics Favoring Direct-Order Purchasing of Auto Products, 2001 (U.S. Households)
• Table 5-7: Demographic Characteristics Favoring Direct Purchasing of Auto Products: By Mail/Phone Order, 2001 (U.S. Households)
• Table 5-8: Demographic Characteristics Favoring Direct Purchasing of Auto Products: By Internet Order, 2001 (U.S. Households)

Appendix I: Examples Of Consumer Advertising

Appendix II: Addresses Of Selected Marketers