Private-label brands such as NAPA, DuraLast and PartsMaster account for a majority of sales in the brake parts aftermarket, presenting challenges to suppliers of traditional brands such as Wagner, Raybestos and Bendix.
Frost & Sullivan’s latest research on aftermarket brake components is based on discussions with leading retailers and program distribution groups. Participants were asked to account for their sales by brand type. In addition to private labels and aftermarket brands, OE brands such as ACDelco and Motorcraft were also considered.
Private-label brands will increase their share of brake component sales from 60 percent of revenues in 2009 to an estimated 66 percent by 2015. Aftermarket brands will lose market share, accounting for just 30 percent of revenues by 2015.
Aftermarket brands enjoy a strong reputation among installers, and installers typically make the brand choice for vehicle owners when their brakes are serviced. However, distributors have used their growing channel power to launch their own brands, with manufacturers’ brands available as a second line or for niche applications. And evidence suggests that private labels are gaining acceptance with installers. NAPA, North America’s largest aftermarket parts distributor, is the most obvious example. In a 2008 Frost & Sullivan survey of more than 1,000 independent installers, NAPA brake pads were the most highly preferred brand by 13 percent of respondents.
In some cases, private label growth is a function of price. The average price for a private-label brake part last year was 20 percent less than the same national aftermarket brand part. The result is higher margins for the distributor and lower margins for the manufacturer. In addition to price, improvements in product quality have also contributed to growth in private-label product lines.
Although national brands are losing ground with leading distributors, customers still prefer to select from a choice of brands, particularly in the brakes category. As a result, distributors will increase the number of national brand SKUs in their product portfolios. The study concludes that the optimal brand mix for brake parts includes low-priced private labels for DIY customers and other price-sensitive buyers as well as several different national brands for DIFM customers and DIYers in search of performance upgrades. Other findings suggest there will be an increased amount of co-labeling – whereby the manufacturer and distributor both have their brand names on the packaging.
