By the year 2005, the U.S. retail market for automotive lifts, wheel aligners, tire changers and wheel balancers will reach levels of half of a billion dollars. The market for this area of the automotive equipment sector will continue to grow due to three main reasons: technology, replacement, and new service centers. Technology has created demand for mature products albeit with a twist, products that are more accurate, have better functionality, and can save time and make money while driving demand and revenues in the market.
The lift industry by far is the largest and most diversified segment of the U.S. garage equipment market. Over the last 30 years, lift shipments have seen a compound annual growth rate of about 1.6 percent. However, as seen in the graph below, the market fell sharply in the early 1970s. This was primarily due to two reasons. The first major reason for the fall was the oil crisis of 1972-1973. The second was the conversion of service stations to convenient marts, limiting the market for lifts. The market has since rebounded and is much more diverse.
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Source: Frost & Sullivan
With so many different light-duty lift types available, including the in-ground and above-ground, it is no wonder that companies are vying to gain market share. Competition in the industry has kept prices at relatively modest levels. The price for a light-duty lift during 1999 varied from $1,900 to about $2,465 depending on the variation of lift. With competitive pressures so strong, it has forced competitors in the market to think of new ways to get their lifts to sell.
Lifts have also seen some technical advances. High pressure/low oil in-ground lifts are more environmentally sound and take less underground space. With shop real estate becoming more expensive, in-ground lifts are making a comeback because they save space. Above ground lifts offer symmetrical and asymmetrical options which allow them to be placed in a wide variety of settings. Advances like these have given way to a new demand for lifts. Yet, this is not the only market to take advantage of new technical advances.
New technology applications have also carried over into the alignment instrumentation market. With new computerized technology slowly but surely coming into the marketplace, there should be a resurgence of new alignment systems for sale. This will be the market segment to spur the industry. Computerized systems are nothing new to alignment systems, yet what is new is the use of digital cameras that take a “snap shot” that allows the computer to indicate alignment measurements. This enables technicians to make adjustments or repairs as needed to almost any make and model of automobile.
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By GlobalDataSurprisingly, this technology is used in only about 2 percent of the alignment racks currently in operation, and is expected to grow strongly in the next five years. Also of keen interest is that this technology allows the technician to service cars faster. Hence, shop owners and technician are able to save time and money, as well as work on more automobiles.
Tire changers and wheel balancers are also implementing new technology, albeit to a lesser extent than the alignment instrumentation system. Tire changers and wheel balancers complement one another and any serious tire business would have a pair suited with the latest technology. On the tire changer front, the European-type tire changer has become standard equipment in the industry taking about 75 percent of the new tire changer market. New wheel designs and softer wheel metals have contributed to this change in tire changer preference. Another contributing factor is the new stiffer sidewall tires such as Goodyear’s run-flat technology. This tire technology uses a higher breaker bead point and must have certified tire changing equipment to correctly and safely dismount and mount the tire. Non-certified tire changers are not strong enough to break the bead on a run-flat tire and may cause injury if attempted.
Wheel balancers have become more accurate with the advent of computerization. Because of strong competition in the marketplace, the average retail price for the end user in 1999 was about $4,025 for a light-duty model and about $12,750 for a heavy-duty version. Considering that this product has a life expectancy of over 6 years, an investment like this would bring a good rate of return, and indicates that about one-sixth of the wheel balancers need to be replaced on a yearly basis.
The overall U.S. garage equipment market is expected to experience a compound annual growth rate of about 3.5 percent during the next 5-year period. Lifts, wheel balancers, and tire changers are a mainstay of the garage equipment market, but it will be the wheel aligner segment that will carry the industry with the fastest growth during the next 4 to 5 years. The majority of the growth is forecast to be attributed to technological advances and replacement.
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By Alfred P. Ortiz
Frost & Sullivan is currently researching the European Garage Equipment Market.
