Automotive Glass Aftermarket Teams Up With OE Glass Manufacturers to Offset Insurance Companies' Influence Over Pricing

Business Wire, Nov 3, 2004

PALO ALTO, Calif. -- Leveraging their position as the largest consumer of automotive glass unit replacements, insurance companies have been influencing prices. In a highly competitive market, installers, distributors, and manufacturers tend to yield to the insurer's terms, placing immense pressure on their profit margins.

The automotive glass aftermarket is looking to original equipment (OE) glass manufacturers for long-term strategic plans to surmount this trend and boost margins.

New analysis from Frost & Sullivan (http://www.transportation.frost.com), North American Automotive Glass Aftermarket, reveals that the market achieved revenue worth $1.27 billion in 2003 and projects to reach $1.61 billion in 2010.

If you are interested in a virtual brochure, which provides manufacturers, end-users and other industry participants an overview of the latest analysis of the North American Automotive Glass Aftermarket -- then send an e-mail to Melina Gonzalez -- Corporate Communications at melina.gonzalez@frost.com with the following information: your full name, company name, title, telephone number, fax number and e-mail. Upon receipt of the above information, an overview will be sent to you via e-mail.

OE glass manufacturers have lately been developing products that cater to both the vehicle manufacturer's design needs and the aesthetic requirements of automotive owners. The extra features give the glass a unique look as well as additional functions that cannot be met by most aftermarket products at the current prices.

Consumers are highly oriented toward features that increase passenger comfort and vehicle manufacturers have responded to this by increasing the number and quality of comfort features available in vehicles -- including glass.

Tinting, integrated heating, solar controls, lamination of sidelite and backlite for noise reduction, and integrated antennas are just a few of the technological developments that are taking place at the OE level.

"By integrating the glass into the overall design concept of the vehicle, glass components become less susceptible to substitution, increasing OE brand value as well as boosting the individual product value," says Frost & Sullivan Senior Industry Analyst Mary-Beth Kellenberger.

Apart from the severe competition in the retail sector, the market also has to address the issue of low-priced imported windshields from Asia.

Nevertheless, the passing of the anti-dumping legislation against China has been a shot in the arm for the North American automotive windshields segment. The implementation of this legislation has boosted the unit and revenue growth rates for domestic products due to the reduced influx of cheaper imports.

Even though pricing has stabilized to an extent, the residual effects of the price wars remain. The perceptions of automotive manufacturers, consumers, and insurance companies about low pricing are extremely hard to overcome.

However, profit margins are likely to widen, especially with the slight price hikes initiated to cover production and distribution costs.

Another factor that favors the aftermarket is its practice of providing fast and efficient service, setting very high standards for repair time and product availability. While ensuring customer satisfaction, it also curbs competition, as the development of this type of delivery network requires massive capital investment and coordination, which serves as deterrents to entrants.

"Auto glass replacement retailers and service providers are increasingly turning to online services such as online claims systems, on-site replacement services, and online ordering to improve their marketability and facilitate sales," notes Kellenberger.

The Internet has not only assisted in streamlining the service delivery process but has also improved the overall transparency of the automotive glass aftermarket to the consumer. This has enhanced the competitive nature of retail installation that is filtering through to vertically organized companies.

North American Automotive Glass Aftermarket, a part of the 9801 subscription, provides an overview and outlook for the North American automotive glass aftermarket. It provides data and analyses of four product categories: windshields, sidelites, backlites, and sunroofs. Listed as well are detailed market drivers, restraints, and industry challenges. In addition, revenue and market figures are illustrated using charts and figures for the two-glass material types -- laminated and tempered. Interviews and executive summaries are available to the press.

Frost & Sullivan, a global growth consulting company founded in 1961, partners with clients to create value through innovative growth strategies. The foundation of this partnership approach is our Growth Partnership Services platform, whereby we provide industry research, marketing strategies, consulting and training to our clients to help grow their business. A key benefit that Frost & Sullivan brings to its clients is a global perspective on a broad range of industries, markets, technologies, econometrics, and demographics. With a client list that includes Global 1000 companies, emerging companies, as well as the investment community, Frost & Sullivan has evolved into one of the premier growth consulting companies in the world. For more information please visit www.frost.com.