Frost & Sullivan: Increased Concerns Spark Questions About the Security of the Spark Plug Market
4 November 1997
Frost & Sullivan: Increased Concerns Spark Questions About the Security of the Spark Plug Market
MOUNTAIN VIEW, Calif., Nov. 4 -- As manufacturers' concern
over the spark plug industry reaches its peak, unsettled manufacturers are
looking to learn what they can do to survive in the industry today. The advent
of platinum spark plugs as standard original equipment has caused a
significant plunge in numbers of unit shipments. Although less than 20 percent
of consumers are familiar with the new platinum plugs, installers are
following original equipment manufacturer (OEM) requirements by using OE
specified plugs. In fact, platinum spark plug usage is expected to increase by
17 percent next year and this leaves manufacturers wondering where they will
stand in relation to the competition.
According to strategic research by Frost & Sullivan (http://www.frost.com), The
U.S. Spark Plug Automotive Aftermarket, manufacturers' revenues for the total
U.S. spark plug aftermarket in 1996 were about $507.3 million. Although the
spark plug aftermarket has experienced a decline in total unit numbers,
revenues have been gradually increasing. This trend is mostly due to the
manufacturers' shift toward more expensive platinum, performance, and
specialty spark plugs, and customers' willingness to buy these new plugs.
Frost & Sullivan divided The U.S. Spark Plug Automotive Aftermarket into
two parts: Market engineering data and end-user data. The objectives of the
study were to analyze usage characteristics, purchase preference and brand
preference in these two areas of focus. In the installer survey, issues were
studied such as installer tune-up business, analysis of installers' favorite
suppliers, brand analysis, platinum versus non-platinum usage, customer
preferences and the platinum spark plug market. The consumer survey consists
of a profile of primary vehicles, Do-it-Yourselfer (DIYer) and Do-it-for-Me-er
(DIFMer) profile and spark plug usage, platinum versus non-platinum usage and
consumer attitudes about brands, quality and price. Some key customer trends
that manufacturers should be aware of are what installers look for in a
supplier, whom installers buy from, whom DIYers buy from and where DIFMers go
to get their vehicles serviced.
The inception of new materials such as platinum has increased spark plug
life, which is expected to cause extended replacement rates in the future.
With a current vehicle age of 8.9 years, industry participants are interested
in knowing if aftermarket spark plugs are being replaced with those that are
supposed to last 100,000 miles, which would reduce unit shipments drastically.
Market trends, such as fewer cylinders per vehicle and pricing pressures, have
also led to concern over the future of the spark plug industry. Competition is
increasing because most auto parts retailers only carry one or two brands of
spark plugs. To combat low market growth opportunities within the United
States, manufacturers have begun entering foreign markets via joint ventures
to capitalize on foreign market growth.
Competition is fierce in the spark plug market. "Spark plugs can be
purchased anywhere, and whoever gets the first call makes the sale," says
Frost & Sullivan Analyst Doug Stein. It is the installers who are presently
driving the market. "The installers decide what type of spark plug to put into
each car, and they tend to follow the manufacturers' recommendations by
choosing the more expensive, longer lasting plugs which will not bring
consumers back with complaints," says Monica Williams, Frost & Sullivan
automotive analyst.
The companies participating in this market include: A. L. Doering Spark
Plug Corporation, AlliedSignal Automotive Aftermarket, Cooper Automotive,
Denso Sales California, Inc., Ford Motorcraft, GM Service Parts Operations,
NGK Spark Plugs (U.S.A.), Inc., NOLOGY Engineering, Inc., Robert Bosch
Corporation, SplitFire, Inc., TECKNICA Spark Plugs, and Torque Master Spark
Plugs Center.
This automotive industry research has integrated the Market Engineering
consulting philosophy into the entire research process. Critical phases of
this research included: Identification of industry challenges, market
engineering measurements, strategic recommendations, planning and market
monitoring. All of the vital elements of this system help the market
participants navigate successfully through the spark plug market.
Frost & Sullivan is an international marketing consulting company that
monitors the automotive industry for market trends, market measurements and
strategies. This ongoing research is utilized to update a series of research
publications such as #5171-18 North American Automotive Electrical System
Components, and to support industry participants with customized consulting
needs.
Visit Frost & Sullivan's web site at: http://www.frost.com
Report: 5563-18 Publication Date: October 1997 Price: $3450
SOURCE Frost & Sullivan
