Oil Filters Procurement Category Market Research Report from IBISWorld has Been Updated

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Oil filters have a buyer power score of 2.4 out of 5, indicating that suppliers have the upper hand in negotiations as a result of steady product demand and a high level of market share concentration. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm IBISWorld has updated a report on the procurement of Oil Filters in its growing collection of procurement category market research reports.

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During the three years to 2014, the price of oil filters has been on the rise due to fluctuating prices among key inputs, like steel and synthetic fiber, and growing demand

Oil filters have a buyer power score of 2.4 out of 5, indicating that suppliers have the upper hand in negotiations, mostly due to steady demand for their products and the high level of market share concentration. Prices are increasing, which puts buyers in a difficult negotiating position, especially considering the above-average volatility in the price of steel, the main input in oil filter production. “Fortunately, buyers still have a few powerful negotiating tactics available to them. By using oil filters' wide availability and the low cost of switching suppliers as leverage, buyers can drive suppliers to reduce their prices,” according to IBISWorld business research analyst Jordan Weinstein.

There are only about 40 companies currently manufacturing oil filters, and many of the top manufacturers produce multiple brands. The low number of manufacturers in the market allows suppliers to grow to enormous size and command high market shares, which reduces buyer choice and negotiation power at the manufacturing level and makes the purchasing process more complex. Some of this market’s top suppliers include Cummins, Eaton, Fram and Parker Hannifin.

Because oil filters are required equipment for many vehicles and there are no viable substitutes for them, suppliers can expect sales to remain constant in the coming years. “This factor dampens supplier motivation to compromise on price and offers buyers little recourse to accepting price increases,” Weinstein says.

Furthermore, the lack of government regulation in the market allows suppliers to use poor-quality materials and make bold, unverified performance claims. There is also a lack of reliable measurement for oil filter performance, which puts buyers at risk of purchasing an inferior filter.

Despite the lack of competition among the market's manufacturers, there is ample competition among secondary suppliers, such as auto parts stores and wholesalers. This competition gives buyers a valuable opportunity to negotiate on price and establish bulk discounts. Additionally, the lack of switching costs enables buyers to change suppliers with ease and quickly take advantage of lower prices. These tactics can shift the balance of power back toward buyers; however, accelerating prices and steady demand are difficult to overcome, which leaves buyers at a distinct disadvantage. For more information, visit IBISWorld’s Oil Filters procurement category market research report page.

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IBISWorld Procurement Report Key Topics

This report is intended to assist buyers of oil filters. Oil filters remove contaminants from the oil used in automobiles, trucks and hydraulic machinery. These filters are primarily used in gasoline and diesel engines, automatic transmissions, power steering and gas turbines, although they are also used in many manufacturing processes involving oil. About 40 large companies, many of which sell their filters under multiple brands, manufacture oil filters. Filters are sold either by a manufacturer or a secondary supplier, such as a wholesaler or retailer. This report does not include hydraulic oil or motor oil, nor does it include oil changes or other automotive services.

Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics

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.

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Gavin Smith
IBISWorld Inc.
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