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MEDICAL DEVICES PHARMACEUTICALS CHEMICALS FOOD & BEVERAGE ELECTRONICS
Strategic Analysis of North American Commercial VehicleMaintenance and Repair Market
VPG Publications, Consulting, Clients www.VPGcorp.com
VPG Market Research Reports www.VPGMarketResearch.com
VPG Partner Reports www.Research-Store.com/VPG
VENTURE PLANNING GROUP 545 Eighth Avenue, Suite 401 New York, NY 10018 Phone + 1 212 564 2838 Fax + 1 212 564 8133 [email protected]
Strategic Analysis of North American
Medium/Heavy-Duty Commercial Vehicle
Maintenance and Repair Market
Maximizing Revenue Growth Amidst Rising Competition
March 2012
2
Contents
Section Slide Numbers
Market Metrics 7
Executive Summary 20
Introduction and Overview of the North American Medium/Heavy Duty CV Maintenance and Repair Market
32
Distribution and Service Channel Analysis 42
Maintenance Demand Analysis for Class 4-8 Trucks 50
Maintenance Demand Analysis for Buses 57
CV Product Opportunity Analysis 61
CV Replacement Tires Opportunity Analysis 70
Impact of Regulations of Medium/Heavy Duty CV Maintenance and Repair Market 75
Research Conclusions and Recommendations 82
Appendix 87
The Frost & Sullivan Story 89
3
List of Figures
Medium/Heavy Duty CV Maintenance and Repair Market: Aftertreatment Aftermarket Revenue Potential Analysis, North America, 2010-2017 29
Medium/Heavy Duty CV Maintenance and Repair Market: Safety Aftermarket Revenue Potential Analysis, North America, 2010-2017 30
Medium/Heavy Duty CV Maintenance and Repair Market: Aftermarket Component Manufacturers by Parts Category, North America, 2010 37
Medium/Heavy Duty CV Maintenance and Repair Market: Top 10 OEM Nameplates for Class 4-8 Trucks, North America, 2010 38
Medium/Heavy Duty CV Maintenance and Repair Market: Key Independent Distribution Channel Participants, North America, 2010 39
Medium/Heavy Duty CV Maintenance and Repair Market: Channel Revenue Indicators for Minor Maintenance, North America, 2010 44
Medium/Heavy Duty CV Maintenance and Repair Market: Channel Revenue Indicators for Major Repairs, North America, 2010 45
Medium/Heavy Duty CV Maintenance and Repair Market: Impact of Legislation on CV Tire Aftermarket, North America, 2010-2017 72
Medium/Heavy Duty CV Maintenance and Repair Market: Aftertreatment Aftermarket Revenue Potential Analysis, North America, 2010-2017 77
Medium/Heavy Duty CV Maintenance and Repair Market: Safety Aftermarket Revenue Potential Analysis, North America, 2010-2017 81
4
List of Charts
Medium/Heavy Duty CV Maintenance and Repair Market: VIO, North America, 2007-2017 13
Medium/Heavy Duty CV Maintenance and Repair Market: Vehicles in Production, North America, 2010, 2011 and 2017 14
Medium/Heavy Duty CV Maintenance and Repair Market: Class 4-8 Trucks in Operation by Geography, North America, 2007-2017 15
Medium/Heavy Duty CV Maintenance and Repair Market: Trucks and Companies by Fleet Size for Class 3-8 Vehicles, North America, 2010 16
Medium/Heavy Duty CV Maintenance and Repair Market: Average Annual Miles Driven for Class 4-8 Trucks, North America, 2007-2017 17
Medium/Heavy Duty CV Maintenance and Repair Market: Average Annual Miles Driven for Buses, North America, 2007-2017 17
Medium/Heavy Duty CV Maintenance and Repair Market: Buses in Operation by Vocation, North America, 2007-2017 18
Medium/Heavy Duty CV Maintenance and Repair Market: HD Truck and Bus Technicians by Geography, North America, 2000-2010 19
Medium/Heavy Duty CV Maintenance and Repair Market: Truck and Bus Service Locations, North America, 2000-2010 19
Medium/Heavy Duty CV Maintenance and Repair Market: Roadmap, North America, 2007-2017 23
Medium/Heavy Duty CV Maintenance and Repair Market: Drivers and Restraints, North America, 2011-2017 24
Medium/Heavy Duty CV Maintenance and Repair Market: Revenue by Parts Category, North America, 2010 and 2017 25
Medium/Heavy Duty CV Maintenance and Repair Market: Total Parts Revenue, North America, 2010 and 2017 25
Medium/Heavy Duty CV Maintenance and Repair Market: Channel Performance Indicators, North America, 2010 26
Medium/Heavy Duty CV Maintenance and Repair Market: Maintenance and Repair Service Trends, North America, 2008, 2010 and 2017 27
Medium/Heavy Duty CV Maintenance and Repair Market: Parts Revenue by Distribution Channel, North America, 2010 28
Medium/Heavy Duty CV Maintenance and Repair Market: Overview and Impact of EPA 2010, North America, 2010-2017 29
Medium/Heavy Duty CV Maintenance and Repair Market: Overview and Impact of CSA 2010, North America, 2010-2017 30
Medium/Heavy Duty CV Maintenance and Repair Market: Overview, North America, 2010-2017 33
5
List of Charts (continued)
Medium/Heavy Duty CV Maintenance and Repair Market: Drivers and Restraints, North America, 2011-2017 34
Medium/Heavy Duty CV Maintenance and Repair Market: Aftermarket Parts and Service Distribution Structure, North America, 2010 35
Medium/Heavy Duty CV Maintenance and Repair Market: Overview of Truck Stop Service Centers, North America, 2010 40
Medium/Heavy Duty CV Maintenance and Repair Market: Truck Stop and Travel Center Locations, United States, 2009 41
Medium/Heavy Duty CV Maintenance and Repair Market: Channel Performance Indicators, North America, 2010 43
Medium/Heavy Duty CV Maintenance and Repair Market: Maintenance and Repair Service Trends, North America, 2008, 2010 and 2017 47
Medium/Heavy Duty CV Maintenance and Repair Market: Parts Revenue by Distribution Channel, North America, 2010 48
Medium/Heavy Duty CV Maintenance and Repair Market: Replacement Parts and Service Competitive Analysis, North America, 2010 49
Medium/Heavy Duty CV Maintenance and Repair Market: Class 4-8 Trucks in Operation, North America, 2007-2017 51
Medium/Heavy Duty CV Maintenance and Repair Market: Class 4-8 Trucks in Production, North America, 2010, 2011 and 2017 52
Medium/Heavy Duty CV Maintenance and Repair Market: Class 4-8 Trucks In Operation by Powertrain, North America, 2010 and 2017 53
Medium/Heavy Duty CV Maintenance and Repair Market: Class 4-8 Trucks In Operation by Transmission, North America, 2010 and 2017 54
Medium/Heavy Duty CV Maintenance and Repair Market: Class 4-Trucks Trends and Needs, North America, 2010-2017 55
Medium/Heavy Duty CV Maintenance and Repair Market: Class 4-8 Truck Revenue by Parts Category, North America, 2010 and 2017 56
Medium/Heavy Duty CV Maintenance and Repair Market: Buses in Operation by Vocation, North America, 2007-2017 58
Medium/Heavy Duty CV Maintenance and Repair Market: Buses in Production, North America, 2010 and 2017 59
Medium/Heavy Duty CV Maintenance and Repair Market: Class 4-8 Bus Revenue by Parts Category, North America, 2010 and 2017 60
Medium/Heavy Duty CV Maintenance and Repair Market: Reman Engine Revenue and Distribution, North America, 2010 and 2017 62
6
List of Charts (continued)
Medium/Heavy Duty CV Maintenance and Repair Market: Reman Transmission Revenue and Distribution, North America, 2010 and 2017 63
Medium/Heavy Duty CV Maintenance and Repair Market: Filtration Systems Revenue and Distribution, North America, 2010 and 2017 64
Medium/Heavy Duty CV Maintenance and Repair Market: Bake Systems Revenue and Distribution, North America, 2010 and 2017 65
Medium/Heavy Duty CV Maintenance and Repair Market: Exhaust Systems Revenue and Distribution, North America, 2010 and 2017 66
Medium/Heavy Duty CV Maintenance and Repair Market: Starter/Alternator Revenue and Distribution, North America, 2010 and 2017 67
Medium/Heavy Duty CV Maintenance and Repair Market: Chassis Component Revenue and Distribution, North America, 2010 and 2017 68
Medium/Heavy Duty CV Maintenance and Repair Market: HVAC/Cooling Parts Revenue and Distribution, North America, 2010 and 2017 69
Medium/Heavy Duty CV Maintenance and Repair Market: Overview of CV Tire Aftermarket, North America, 2010 71
Medium/Heavy Duty CV Maintenance and Repair Market: Replacement Tire Revenue by Distribution Channel, North America, 2010 73
Medium/Heavy Duty CV Maintenance and Repair Market: Replacement Tire Revenue and Distribution, North America, 2010 and 2017 74
Medium/Heavy Duty CV Maintenance and Repair Market: Roadmap of Regulatory Environment, North America, 2007-2017 76
Medium/Heavy Duty CV Maintenance and Repair Market: Overview and Impact of EPA 2010, North America, 2010-2017 77
Medium/Heavy Duty CV Maintenance and Repair Market: SCR-Equipped Trucks in Use, North America, 2007-2017 79
Medium/Heavy Duty CV Maintenance and Repair Market: Retrofitted Trucks in Use, North America, 2007-2017 79
Medium/Heavy Duty CV Maintenance and Repair Market: Class 4-8 Trucks Aftertreatment Revenue, North America, 2010 and 2017 80
Medium/Heavy Duty CV Maintenance and Repair Market: Overview and Impact of CSA 2010, North America, 2010-2017 81
7
Market Metrics
8
Research
S
co
pe • Market dynamics – Market drivers, restraints, and challenges for the maintenance and repair market
• Maintenance and repair demand forecasts for class 4-8 trucks and buses
• Assess the impact of the regulatory environment on the maintenance/repair aftermarket
• Demand analysis of replacement parts for CVs
Research
M
eth
od
- o
log
y
Market
D
efi
nit
ion
• The goals of the study are to analyze the North American CV (class 4-8) repair and maintenance industry and to project the future outlook and opportunities it offers to the different participants of the value chain. G
oal
• This study covers the North American class 4-8 (14,001 GVWR and up) on-road CV market. CVs include medium and heavy-duty trucks and school, transit, and motor-coach buses.
• The geographic scope is North America, which includes the United States and Canada.
• The aftermarket includes independent distributor/retailers and the Original Equipment Service (OES) channel.
• Price and revenue, unless otherwise stated, are provided in U.S. dollars. Aftermarket-parts revenue is at the manufacturer level unless stated otherwise. All service revenue is at the retail level unless stated otherwise.
• The analysis contained in this research service is based on:
o Information collected through discussions with market participants and from secondary sources
o Frost & Sullivan’s published research and market and technology expertise
Objectives, Scope, and Market Definitions
9
Bottom-up and Demand Analysis are Combined to
Evaluate Market Size and Prevailing Competitive Situation
Market Engineering Using
Bottom-up Methodology
• Market Engineering provides insight into all of the factors that influence a market by examining the market across the value chain, from component manufacturers to vehicle owners.
• Frost & Sullivan conducts primary research interviews with component manufacturers, distributors, and installers to benchmark unit shipment, industry pricing, revenue, products, and competitor shifts. Participant input is validated by verifying information with customers and suppliers. Frost & Sullivan builds the market size by accounting for the role of each major participant in the market.
Demand Analysis Marketing Engineering analysis is augmented by vehicle in operation analysis including, demand by fleet and personal vehicle owners and demand by vehicle type.
Bo
tto
m-u
p M
eth
od
olo
gy
Primary research with all major participants (15-20 interviews)
Validation of participant size through distributor, retailer, and distribution participant
interviews
Secondary research and demand analysis valuations
Competitive positioning of market participants
Dem
an
d/V
IO A
naly
sis
Total Market Size and Competitive
Position
10
Partial List of Companies Interviewed
YRC Worldwide Inc. Hendrickson USA LLC
ADM Logistics Inc. American Truck Dealers Association
Staples Inc. Michelin North America Inc.
Con-way Inc. Goodyear Tire and Rubber Company
Baldwin Filters Inc. National Automotive Parts Association (NAPA)
Cummins Filtration Dana Holding Corporation
Bendix Commercial Vehicle Systems LLC VIPAR Heavy Duty Inc.
Haldex AB Fleet Maintenance, City of Chicago
Fleetpride Inc. Fleet Maintenance, City of Toronto
Inland Truck Parts Lonestar Truck Group Inc. (Freightliner)
Roady’s Truck Stops
11
Aftermarket Analysis Metrics
The CV aftermarket is directly related to the number of vehicles in operation (VIO) and the key base factor in replacement part and services forecasts.
Average annual miles travelled directly impact a product’s lifecycle and is a strong indicator of replacement and service trends.
Because the majority of CVs operate within fleets and are repaired in-house, fleet size, distribution, and growth trends heavily influence maintenance and repair channels.
Number and type of service locations and technician trends show how and which channels will attract service and repair revenue.
Analysis
Metrics
Annual production units indicate the installed base of CV components. The installed base also reveals any changes in component technology that will have downstream affects on the aftermarket.
Because CVs are business drivers, economic conditions are major impacts on purchase and operation trends, thereby impacting maintenance and repair revenue.
Source: Frost & Sullivan analysis.
12
CV Classifications and Definitions
Category Class 4 Class 5 Class 6 Class 7 Class 8 Buses
Vocation
Intracity pickup
and delivery; construction
Construction and service industries
Pickup and delivery;
government fleet trucks
Construction and retail; pickup and
delivery
Line haul; vocational
Intracity transit and
school buses and
intercity motor
coaches
Growth
Outlook
Small portion of the
commercial vehicle
market; likely to
experience medium growth
Slow economic recovery makes
customers likely to stick
to older vehicles in the short
term
Both private and public
sectors delaying
purchase of replacement
vehicles; negative impact on
VIO
Likely to see stable or medium growth;
vocational sectors highly
influenced by economy
and inflation rates
New regulations
led to Increase in price; slight decline in
new registrations; likely to see
medium growth
Fuel economy
concerns will drive growth for electric and hybrid
transit buses; sales directly proportional to economic
activity
Source: Frost & Sullivan analysis.
13
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Buses 0.55 0.56Class 8 3.11 3.18Class 7 0.99 1.09Class 6 0.73 0.80Class 5 0.78 0.86Class 4 0.94
Year
Class 4-8 Trucks and Buses VIO:
CV Population to Reach Nearly x.x Million by 2017 with a Low Compound Annual Growth Rate (CAGR) of x.x Percent
Medium/Heavy Duty CV Maintenance and Repair Market: VIO, North America, 2007-2017
CAGR = x.x%
VIO
(M
illio
n)