In the exhaust and emissions components aftermarket, several products are expected to grow much faster than average, due to price increases through 2017. These price increases are driven by shifting product types within product categories; these shifts, in turn, are influenced by factors on the installer, the consumer and even on the vehicle manufacturer. Understanding these shifts and their causes is vital for installers and distributors in the North American aftermarket.
Exhaust components are expected to undergo shifts related to both installer convenience and consumer preference. Unit shipments of direct-fit components are expected to increase, as these parts do not require fabrication tools at the installer location nor do they require fabrication training for the technician. Direct-fit components are expected to be especially popular with franchised repair locations. Universal products will continue to be a strong product category, but buyers will likely be independent facilities and specialty locations, where the much lower price is seen as a valid trade-off for the increased time required in fabricating the proper components. Consumers are also driving a shift in the exhaust component aftermarket. Because of the durability advantage inherent in stainless steel exhaust components, consumer preference is shifting to this type of product. While prices are higher than conventional components, the trend toward increased adoption suggests that in northern regions, the high price is more than offset by a reduction in replacement frequency.
Product shifts on the emission control product side are driven mainly by shifts at the OE-level. As fuel economy regulations tighten, OEMs are expected to install a greater number of more advanced sensors to monitor and regulate engine performance. The greatest impact on the aftermarket will be generated by the shift in oxygen sensor technology to wideband, or air/fuel ratio, sensors. Wideband sensors allow a more precise control of a vehicle’s air/fuel ratio, enhancing fuel economy. The average price of wideband sensors is three to five times that of a standard oxygen sensor (the type typically installed after the catalytic converter), generating revenue growth for the market through 2017. Despite the trend towards vehicle downsizing, unit shipments will remain relatively stable; while cylinder count may decline, multi-bank engines are still expected to be prevalent, especially in light trucks. Based on the recently-released CAFE 2025 regulations, hybrid six- and eight-cylinder engines will remain a viable production option for OEMs looking for a fuel economy credit for the production of a hybrid vehicle. Unit shipments will face a reduction as midsize and smaller vehicles shift to single-bank engines, namely four cylinder engines, but the higher average price of the wideband sensor will compensate for any revenue declines in this category.
In the exhaust and emissions components aftermarket, several products are expected to grow much faster than average, due to price increases through 2017. These price increases are driven by shifting product types within product categories; these shifts, in turn, are influenced by factors on the installer, the consumer and even on the vehicle manufacturer. Understanding these shifts and their causes is vital for installers and distributors in the North American aftermarket.
Exhaust components are expected to undergo shifts related to both installer convenience and consumer preference. Unit shipments of direct-fit components are expected to increase, as these parts do not require fabrication tools at the installer location nor do they require fabrication training for the technician. Direct-fit components are expected to be especially popular with franchised repair locations. Universal products will continue to be a strong product category, but buyers will likely be independent facilities and specialty locations, where the much lower price is seen as a valid trade-off for the increased time required in fabricating the proper components. Consumers are also driving a shift in the exhaust component aftermarket. Because of the durability advantage inherent in stainless steel exhaust components, consumer preference is shifting to this type of product. While prices are higher than conventional components, the trend toward increased adoption suggests that in northern regions, the high price is more than offset by a reduction in replacement frequency.
Product shifts on the emission control product side are driven mainly by shifts at the OE-level. As fuel economy regulations tighten, OEMs are expected to install a greater number of more advanced sensors to monitor and regulate engine performance. The greatest impact on the aftermarket will be generated by the shift in oxygen sensor technology to wideband, or air/fuel ratio, sensors. Wideband sensors allow a more precise control of a vehicle’s air/fuel ratio, enhancing fuel economy. The average price of wideband sensors is three to five times that of a standard oxygen sensor (the type typically installed after the catalytic converter), generating revenue growth for the market through 2017. Despite the trend towards vehicle downsizing, unit shipments will remain relatively stable; while cylinder count may decline, multi-bank engines are still expected to be prevalent, especially in light trucks. Based on the recently-released CAFE 2025 regulations, hybrid six- and eight-cylinder engines will remain a viable production option for OEMs looking for a fuel economy credit for the production of a hybrid vehicle. Unit shipments will face a reduction as midsize and smaller vehicles shift to single-bank engines, namely four cylinder engines, but the higher average price of the wideband sensor will compensate for any revenue declines in this category.
