Though many product categories are suffering the effects of our weak economy, all signs point to a strong brake product marketplace this year and into the near future.
In fact, drivers are more likely to "trade up" for premium brands and materials, especially as they pertain to ceramic brake friction products, according to a past report by Frost & Sullivan.
More manufacturers are launching and widening ceramic product lines to capture higher profit margins and match the changing OE standards, but factors like fuel prices will tamper the overall growth, states a report from the global growth consultant.
Analysis from "North American Brake System Parts Aftermarket: Friction Parts" states the friction parts aftermarket earned $1.21 billion last year, and Frost & Sullivan estimates a $1.58 billion market by 2014. Some manufacturers have considered this projection wishful thinking, but agree that growth exists in the brake parts category, especially with brake pads.
Manufacturers are putting that thought into their product launches, too.
"The new ThermoQuiet CeramicNXT product line is changing the way technicians think about ceramic technology and, more important, helping them perform superior brake jobs on a full range of today's vehicles," says Lou Kafantaris, group brand branager, Federal-Mogul Global Aftermarket. "Our enhanced website enables professional technicians and consumers to explore the technologies behind today's ultimate ceramic brake pads."
Promoting premium pads is something companies are doing across the board, starting with the planning stages.
"The raw material costs are going up," says Dan Lelchuk, president of Centric Parts, makers of the StopTech and Power Slot brands of brake components and systems. "Price increases are occurring from all segments of the market, not just brakes."
He adds, "I would also agree that smart distributors are actually embracing these price increases because they understand gross profit dollars."
"Moving customers in the low-priced product line into the mid-grade line, and those in the mid-grade line into the premium line, increases profits and allows manufacturers to invest in researching and developing the next generation of friction parts," says Stephen Spivey, Frost & Sullivan senior industry analyst.
Jim Kelley, director of sales and marketing for Honeywell Friction Materials, corrects the "upselling" assumption, instead clarifying that Bendix-brand brake products are introduced to customers at the premium level first.
"Rather than calling it upselling, we start with a premium product, we teach the technician that they should start with a premium product as a replacement," he says. "If the consumer pushes back on the price, they can move down. It's always easier to move down than to move up."
Federal-Mogul is promoting the use of premium lines, too. "As the leader in global friction, Federal-Mogul's insight to the latest developments in OE braking systems provides us a unique advantage in desigining game-changing technologies that meet the evolving needs of today's drivers," says Peter Murnen, global marketing director, friction products, Federal-Mogul Global Aftermarket.
Additionally, Bendix recommends the OE replacement, whether it's ceramic or semi-metallic, but type of driving also plays into what's being sold. If a driver is wearing through his or her brakes at an unusually rapid pace, a different brake pad may be in order, continues Kelley.
The trend with brake work these days appears to be premium friction with standard-grade rotors, asserts Lelchuk. This means more rotors are being replaced along with regular brake pad changes.
Kelley agrees, saying the lighter rotors help reduce an automobile's overall weight. Also, vented rotors are making way for solid designs, he adds.
It's easier to sell a premium brake pad than it is a premium rotor, say the manufacturers we spoke with.
"I think brake manufacturers tend to focus on the friction side of the business because it's very difficult to differentiate hydraulics, rotors (and other components)," adds Kelley. "It's very difficult to explain to a technician why your rotor is better than anyone else's."
Lelchuk also attributes the driver's need for less brake dust as a factor in selling premium friction materials. However, brake dust may not always be connected to the friction material. At times, "the dust you see is not pad dust but dust from the brake rotors," he adds.
Overall, even brakes as a category can stand to improve. Lelchuk says Centric's distributors have seen single-digit increases, "pretty much where they were last year."
Where the slowdown occurs, he adds, is in preventive maintenance.
Kelley foresees drivers continuing to adjust how they allocate budgets, eventually making more room for necessary repairs, brake work included.
The Frost & Sullivan report concludes with this advice: manufacturers must emphasize their product differentiation, along with customer service and profitability throughout the supply chain. Suppliers also should aim for complete all-makes, all-models coverage, along with considering sales of other brake-related products such as rotors and calipers.
