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 MarketMOUNTAIN 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