Engine and Transmission Remanufacturers Find Encouragement as Number of Replacement Age Vehicles Increases

PALO ALTO, Calif.--April 12, 2005--The age of the North American vehicle in-use population is increasing and this factor expects to steadily contribute to the revenues for the remanufactured engines and transmissions aftermarket.

The strong sales of new vehicles between late 1990s and 2000 are leading to an increasing number of prime replacement-age vehicles in the North American markets. Remanufactured engines and transmissions offer cost-effective solutions to vehicle owners or installers for the major repairs that tend to occur after the expiration of the warranty period.

New analysis from Frost & Sullivan (http://transportation.frost.com), North American Remanufactured Engines and Transmissions Aftermarket, reveals that this market generated revenue of $4.4 billion in 2004 and expects to reach $6.0 billion in 2011.

The continuous introduction of new engine and transmission models by both foreign and domestic automakers results in a proliferation of parts. This implies an increase in the number of parts that remanufacturers need to develop, stock, and warehouse before shipment.

In addition, increased competition from the salvage industry is curtailing demand for remanufactured engines and transmission.

"Salvagers/recyclers have unified computer systems so as to be more organized in the finding and distribution of used parts including engines and transmissions to jobbers, installers, and the independent mechanics," notes Frost & Sullivan Research Analyst Magdalena Borkowski. "These salvage unit vendors offer a facility to the end users where they can order a used part online and get it shipped within two to three days at much cheaper rates."

In addition, new mandatory safety regulations are encouraging consumers to buy cars with enhanced safety features such as mandatory dual air bags. This is increasing the scrappage of lightly used vehicles -- a key source for salvage units.

A convenient financial option to acquire new cars and the attractive incentives offered by vehicle vendors encourages this trend.

While remanufactured engines represent a mature market that is expected to decline eventually, the remanufactured transmissions market is likely to see revenue growth due to an expected increase in the number of replacement-age vehicles in use and the decreasing supply of qualified labor to repair transmissions.

The North American Remanufactured Engines and Transmissions Aftermarket, a part of the Transportation subscription, provides detailed revenue forecasts of these aftermarkets by region and end user. The study enables remanufacturers of engines and transmissions to design strategies and position their products to benefit from the changing markets and obtain maximum return on investments. Interviews of analysts and executive briefings are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community, by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com.

North American Remanufactured Engines and Transmissions Aftermarket

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Keywords in this Press Release: salvage, rebuilders, vehicle parc, remanufacturers, transmissions, engines, prime replacement age vehicles, research, information, market, trends, technology, service, forecast