Abstract
US market to grow 4.1% annually through 2010
The service aftermarket for light vehicles is projected to increase at an
annual rate of 4.1 percent, reaching $73.3 billion by 2010. The service
aftermarket' s current moderate revenue growth results from improvements in new
light vehicle quality in terms of reliability and durability. These
improvements have overwhelmed other factors such as the expanding light
vehicle population, miles traveled per year, increased labor rates, and
increasingly complex vehicle designs. However, opportunities to provide
service are expected to rise as more vehicles reach prime aftermarket service
age.
Electronic sector to witness highest annual growth
The largest service category in the aftermarket will continue to be mechanical
products, which includes non-electrical/ electronic engine service and
chassis, drivetrain and suspension service and components. However, growth
will be limited by the improved quality of these already highly durable
products. Electronic service and components will witness the highest annual
growth, a direct result of the continued transformation of the automobile from
a mechanical machine with electronic enhancements into a software-driven
device. Electronics diagnostic work will help to elevate demand in this area.
Most service providers set a fixed cost of electronic diagnostic work, which
if often mandatory before repair work begins. The OEM industry' s hesitance to
develop an integrated approach to electronics control and embedded software
virtually guarantees continued high levels of electronics-related quality
issues and thus the need for service in this area. Demand for electrical
service will grow moderately, with some categories seeing demand suppressed
due to new technologies such as highly durable light emitting diode (LED)
lighting. Finally, growth in the exterior and structural service category,
which includes body repair, will continue to experience growth due to vehicle
accident rates.
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