Los Angeles, CA (PRWEB) April 03, 2014
Vehicle seating and interior trim has a buyer power score of 3.3 out of 5, indicating that buyers have the upper hand in negotiations. There is room for price negotiation, but market conditions can put certain restrictions on buyer power. “Market concentration is high at the national level, with a handful of large manufacturers competing for the business of major automakers,” says IBISWorld procurement analyst Scott Winters. “At the regional and local levels, though, the market is highly fragmented, which means buyers can take advantage of competition to get reduced prices.” Major suppliers in the market include Johnson Controls Inc., Magna International Inc., Lear Corporation and Faurecia SA.
Vehicle seating and interior trim prices are only expected to grow slightly 2010 to 2013, which contrasts with the soaring growth trends that have characterized many automotive markets during this post-recession period. These stable prices are influenced by demand from downstream markets like automobile manufacturers, motorcycle manufacturers and auto repair shops. These markets have been experiencing heightened demand during the past three years. “Although demand has been increasing rapidly, the volume of sales has yet to return to prerecession levels, stifling any potential price escalation and keeping buyer power intact during the period,” adds Winters.
Key inputs such as synthetic fiber, urethane foam and steel also dictate prices. These inputs tend to be volatile but are forecast to remain relatively stable in the three years to 2016, allowing interior trim and seating prices to increase. Prices are historically stable and unlikely to spike, making it unnecessary for buyers to commit to fixed-price contracts with suppliers, which also negates the threat of steep switching costs such as contract termination fees, further boosting buyer power.
Interior products tend to be more specialized, forcing buyers to locate an original part or have one custom fabricated. This specialization effectively lowers the number of potential suppliers and reduces buyer power. Buyers still have a number of negotiating opportunities such as bulk discounts and discounts on related products, but low profit margins in the market put a limit on how deep discounts can be. For more information, visit IBISWorld’s Vehicle Seating & Interior Trim procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of vehicle seating components including seat frames, cushions, seat covers, power seating systems and heated and cooled seats. This report also includes interior trim components such as consoles, door panels, headliners, sun visors, instrument clusters and pedals. The report also covers repairs performed on the above components. Seating and trim components for boats and motorcycles are included, but aircraft seating, seating systems and interior components are excluded from the report. The suppliers in this market are aftermarket vehicle parts manufacturers or major automakers that manufacture replacement parts for their vehicles.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.