The North American ride control aftermarket is expected to resume its historical trend of continual decline, despite a brief upswing in 2009 and 2010 driven by a consumer preference towards repairing vehicles rather than replacing them. The current state of decline is driven by steadily dropping pricing and revenues in standard replacement shock absorbers and struts, which comprise the bulk of the market’s volume. Average prices have been dropping from severe price competition commonly seen in commodity markets. Declines stem from little to no product differentiation, price pressure from competing imported products and market share concentration in leading manufacturers. Compounding these declines is a drop in the number of units shipped, due to increases in original equipment manufacturer (OEM) warranty terms and quality of parts.
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Despite the expected declines, overall market conditions will support growth if a manufacturer is able to generate demand from the consumer. As economic recovery continues, consumer maintenance spending is expected to continue to increase. Supporting this growth beyond the short-term are the movements toward extended vehicle life spans and increased vehicle mileage, both of which began in the 2008 recession and show no signs of slowing.
The key strategy to overcoming this state of market decline and taking advantage of a favorable market continues to be focusing on consumer education. A lack of consumer attention to and maintenance of ride control components are expected to be the most significant restraints across the forecast period, and are certainly the largest restraints that manufacturers can take steps to counteract. Consumer education should be a joint effort between distributors, retailers and installers. They should educate consumers about the importance of ride control product maintenance and the advantages of premium ride control products through both on-location and social media and Internet outlets. Manufacturers should remind consumers that shock absorbers and struts are items that require regular replacement and are not designed to function for the lifetime of the vehicle, unless failure dictates otherwise. The safety advantages of properly functioning shock absorbers and struts should be emphasized.
Manufacturers should also ensure that their product line is positioned to be accessible to consumers and installers with little familiarity with ride control products. A key product positioning strategy will concern the differentiation from imported products by increasing the product’s performance or quality. Manufacturers are able to emphasize their value proposition against imported products that compete on a price-only basis. Differentiation can also be driven by the manufacturer’s reputation for build quality through extended warranty support for entry-level products. As the average vehicle age increases, consumer willingness to invest in preventative maintenance is expected to increase, as is the number of consumers undertaking this type of repair. These factors will increase revenue potential for this market segment.