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You are here: Home1 / News2 / Product News3 / Replacement Demand Driving UK Garage Equipment Sales

Replacement Demand Driving UK Garage Equipment Sales

Date: 13th December 2006 Author: Tyrepress Editors Comments: 0

Replacement demand is currently the most important driver in the European mechanical testing and material handling equipment market. Products from established manufacturers are increasingly being replaced by novel offerings from new participants, driving competition and volume sales, according to Frost & Sullivan.

The research firm said the European mechanical testing and material handling equipment market earned revenues of 566.8 million euros in 2005 and estimates this will reach 725.73 million in 2012. “As customers attempt to constantly update and equip themselves with the latest technologies, they are no longer willing to limit themselves to traditional manufacturers,” said F&S senior research analyst Benny Daniel. “End consumers are signing contracts with manufacturers with these competencies, generating fresh demand for garage equipment as a result.”

To keep pace with the latest developments in vehicle technology, garage equipment manufacturers are building close ties with vehicle manufacturers.

This strategy is assisting their R&D efforts to provide repair centres and end users with sophisticated and technologically competent equipment.

“Most automobile manufacturers and test equipment OEMs maintain training centres to instruct repair staff on the use of equipment and diagnostics,” said Daniel. “Companies can take advantage of these facilities to promote their technologies, as end users would be more accustomed to the type of equipment being offered.”

Due to superior technology, however, the interval recommended by vehicle manufacturers for inspections is increasing. As vehicles become more reliable and parts/components benefit from an extended warranty period, the need for inspection or repair assistance, and consequently visits to garages and workshops, has reduced.

Other challenges include the possible slackening of future investment in garage equipment in the short term, as well as high levels of competition, which have driven several companies to seek growth opportunities through acquisition.

“Innovation and new product introduction capability are now enabling niche manufacturers to cater to the top-end market, where the return on investments (ROI) is very high, with equally high risk of involvement,” added Daniel. “This is an alternative to the conventional trend of mergers and acquisitions commonly witnessed across the market.”

At present, manufacturers capable of integrating wireless and other technological developments into workshops are vertically integrating vehicle diagnosis capabilities with standard garage equipment functionalities. Such companies are leading the emergence of new entrants, providing the complete garage solutions demanded by consumers. Existing participants need to make use of this untapped market and follow suit.

“Most manufacturers adopt a pricing strategy failing to realise that quality, robustness, and reliability are long-term factors, which sustain products, manufacturer identity and brand image,” said F&S automotive & transportation programme manager, Anil Valsan. “Equipment manufacturers need to establish close relations with automobile manufacturers, as they lead in providing service stations with certain equipment and brands.”

Also, mechanical testing and handling equipment manufacturers need to emphasise modular design and concepts, enabling customers to buy equipment which suits varied budgets.

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Related Tags

acquisition, automotive, diagnostics, garages, mergers and acquisitions, pricing, research

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