Study: Advanced Powertrains to Drive Remanufactured Replacement Component Market
February 13, 2014
The entry of advanced class 6-8 powertrain systems that comply with new emission regulations will drive revenue for the North American remanufactured replacement components market over the next five to seven years.
New analysis from Frost & Sullivan says while this will intensify competition from suppliers of new replacement parts it will affect unit shipments for some products, the environmentally friendly image of remanufactured engines, transmissions, clutches and turbochargers will support ongoing demand among major truck fleet operators.
The business consulting firm’s report, Strategic Analysis of the North American Class 6-8 Remanufactured Powertrain Components Aftermarket, finds that the market earned revenue of $3.19 billion in 2013 and estimates this to reach $3.52 billion in 2019.
“Increased sophistication in the functionality of heavy-duty engines and variable geometry turbochargers will raise the unit prices of remanufactured components,” said Frost and Sullivan automotive and transportation research analyst Anuj Monga. “The enhanced reliability and availability of remanufactured components means that these products will continue to thrive in the face of stiff competition from new, non-original replacement parts.”
However, the group notes, the addition of newer and refined components to the powertrain system could still pose a challenge, as the lack of cores will lead to the use of newer parts in component assemblies, thereby escalating final costs. The scarcity of skilled labor is another restraint that will be prominent in the case of independent remanufacturers, who are otherwise not involved in the design and development process.
“Unlike many independent remanufacturers that find it tough to gain momentum due to core availability issues, original equipment manufacturers can leverage their installed base and stand a better chance in the remanufacturing market,” said Frost & Sullivan in a release.
It believes partnerships with OEMs will be vital for remanufacturers of enhanced powertrain components to not only access key proprietary information, but also capitalize on the installed base of different OEMs.
“Truck manufacturers are also interested in widening their participation in the remanufacturing industry, hence providing added opportunities for remanufacturers to partner with OEMs, keep pace with technological change, and offer differentiated products,” observed Monga. “The remanufactured powertrain components market will particularly see higher activity from truck manufacturers looking to vertically integrate into component remanufacturing.”