Auto Parts — Is this Industry Still Growing?
Jennifer Nietz - Director of Operations
I’ve got good news for those of you who actively work with and prospect into the automotive parts industry — it’s still growing! I was recently doing some account deep dives for a client of mine that targets auto parts manufacturers, and it was shocking to me just how big some of the key players are getting here in the U.S. market. Top players in the industry have over 30 U.S. locations and appear to be expanding existing locations or even building new locations. I was a little surprised, so I thought this month I would do a little digging to see what was going on.
Growth over the last five years has indeed been substantial at 8.8% annual growth. The next five years are predicted to continue to grow at about 2.7% – still good, just a little bit of a slower rate.
One of the big factors the growth over the last five years and the continued growth is the rebound on the demand for autos. Consumers are starting to purchase “bigger” ticket items, and automotive OEMs are starting to grow. Industry revenues are expected to continue an annual growth trend as well and are not expected to fluctuate like they did in 2009. Over the next five years as revenue grows, you will see that in the year 2017, the growth is actually expected to be at 3%. The next three years will be critical and a great time for your organization in these spaces.
There are several key players in this industry that should be of interest to your firm and warrant some attention. The companies we would recommend if you support this industry would be:
Magna – Holds 11.9% of the market share
Delphi – Holds 5.9% of the market share. Over the next five years until 2019, Delphi will begin to diversify its product pipeline to meet the changing demands from automakers. For example, automotive parts manufacturers’ success often relies on the technological sophistication of their products. Governments in the European Union, Japan and the United States are steadily increasing emissions regulations, particularly for diesel engines, creating new product opportunities for parts suppliers. To that end, Delphi unveiled a new selective catalytic reduction (SCR) system that can reduce nitric oxide emissions from diesel engines to meet emissions requirements in all jurisdictions. Delphi’s new SCR system went into production in 2012. (Ibisworld)
COACT has a great deal of knowledge and experience in the auto supplier sector and understands that the buying systems in these organizations are very complex and change very quickly. We have found that a lot of products…and services have become commoditized in this space but have found ways to penetrate our clients into the market. We would love to work with you to do so as well.
Questions or comments? Please contact Jennifer Nietz at jnietz@teamCOACT.com.