Alternator prices have been falling over the past three years primarily due to falling key input costs, such as electronic components and steel
Los Angeles, CA (PRWEB) September 04, 2014
Alternators have a buyer power score of 3.9 out of 5, which indicates favorable purchasing conditions for buyers. Buyer power in this market is largely driven by falling prices, the low level of specialization and low switching costs, all of which benefit buyers. Nevertheless, the low availability of substitutes restricts buyer power to an extent, says IBISWorld analyst Cameron Roark.
Buyers benefit strongly from falling product prices, encouraged by the mounting level of import penetration. Alternator prices have been dropping over the past three years mostly due to falling input costs, such as steel and electronic components, which have made the production processes cheaper. About half of domestic demand for alternators is met by imports; this significant level of import penetration has intensified the competition in the market and has forced vendors to drop prices as production costs have subsided. Due to the limited applications outside the automotive market, vendors have pushed to have a variety of features available for their products, constraining the level of product specialization, continues Roark. Limited specialization, coupled with the large number of vendors in the market, reduces switching costs and lifts buyer power. Market suppliers include Delphi Corporation, Denso Corporation and Johnson Controls Inc.
On the other hand, the low availability of substitutes, the high level of price volatility and moderate supply chain risk all restrict buyer power. There are no direct substitutes for alternators, which significantly hampers buyer power. Meanwhile, the price of alternators exhibits a high level of volatility due to fluctuations in raw material inputs, as well as shifts in external demand drivers. Lastly, the supply chain presents a moderate risk of price shocks, primarily due to the supply chain's reliance on the downstream automotive market, which is highly susceptible to economic cycles. While prices are expected to continue falling over the next three years, buyers are encouraged to consider supply contracts to lock in prices. Price volatility in the market will continue to pose a risk for buyers; if prices were to spike, it could cost the buyer in the event of waiting for further price drops. For more information, visit IBISWorld’s Alternators procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of alternators. An alternator is an electromechanical device that converts mechanical energy into electrical energy, particularly alternating current (AC). Alternators are used in vehicles to provide recharge power to the battery while the motor is running and are typically found in internal combustion engines. This report does not include generators, starters or batteries.
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
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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.