Carburetors, Pistons, Piston Rings, and Valves

SIC 3592

Companies in this industry

Industry report:

This category includes establishments primarily engaged in manufacturing carburetors, pistons, piston rings, and engine intake and exhaust valves. Establishments primarily engaged in manufacturing metallic packing are classified in SIC 3053: Gaskets, Packing, and Sealing Devices, and those primarily engaged in manufacturing machine repair and equipment parts (except electric), on a job or order basis for others, are classified in SIC 3599: Industrial and Commercial Machinery and Equipment, Not Elsewhere Classified.

Industry Snapshot

Carburetors, pistons, intake and exhaust valves, and piston rings account for a relatively small and declining portion of the broader automotive and machine engine parts manufacturing industries. Nevertheless, the industry shipped $85.2 million worth of products in 2009, up from $63.7 million in 2008, according to the U.S. Census Bureau. This manufacturing segment was one of the very few in the United States that actually saw an increase in value of shipments during that time; most experienced a fall in production and sales due to the economic recession that took hold in 2008. Still, the automotive parts industry traveled a rough road into the second decade of the twenty-first century, and by 2011 there remained significant challenges that threatened profits and growth.

Organization and Structure

The total auto parts industry is very fragmented and consists of thousands of suppliers, ranging from small specialty shops to multinational corporations. In general, this industry sector is comprised of four lines of business: original equipment (OEM), replacement parts, distribution, and rubber fabrication. Original equipment is manufactured and sold to the automobile companies for installation in new vehicles. The replacement sector produces parts and equipment for either replacement or supplementation. Replacement and supplemental parts are sold primarily to retail outlets and fleet owners.

The industry's product share is divided into three major categories, each with several subcategories. In each industry sector, the largest share of parts is manufactured for use in motor vehicle engines. Miscellaneous non-motor vehicle internal combustion engines and farm machinery make up the second and third largest uses of this industry's products.

The materials consumed by the industry cover most of the materials used in manufacturing: ferrous and nonferrous stock, ceramics, rubber, and plastic. The industry supplies carburetors, pistons, rings, and valves either as original equipment for manufacturers of new products or as replacement parts for older products. Indicative of the industry's overall decline, especially the quickly waning demand for carburetors, is the fact that in 2006, the value of materials used by the industry--including nuts and bolts, fabricated metal, iron and steel casings, aluminum and steel bars and forms, and other components--totaled $350 million, down from more than $535 million in 2002.

In the first decade of the 2000s, the industry continued to be affected by foreign competition and changing technology. Especially in the motor vehicle sector, developments in technology meant that some products needed to be replaced less frequently or were on the verge of obsolescence. In the automotive market, for instance, the traditional carburetor has largely been supplanted by fuel injection, which is more precise and fuel-efficient. After-factory rebuilding and replacement of existing carburetors constitutes the extent of this declining market. As older model automobiles are retired from the marketplace, the demand for new and rebuilt carburetors will continue to wane. Motorcycles and heavy trucks typically still use carburetors, as do other types of non-automotive engines, such as those produced by Briggs & Stratton and Tecumseh. Among all industry products, demand for more reliable components has led to longer-lasting parts that require servicing and replacement less often than in the past. The industry's pistons, rings, and valves are still viable components for the automotive market, both in the OEM and aftermarket sectors.

Because half of its revenues come from automotive applications, the industry is largely dependent on sales of motor vehicles in general and automobiles and light trucks in particular. While U.S. automakers posted a modest recovery in the mid-1990s from their early 1990s slump, growth was tempered by slim margins and was uneven across different segments. By the late 1990s, however, truck and automobile sales had reached unprecedented levels.

As with the entire auto parts industry, the productivity and profit generated by this segment is also heavily dependent on the overall economy. In the late 1990s, the economy and auto sales were both strong, with total shipment values reaching $99.8 billion in 1999 and $98.8 billion in 2000. However, following the terrorist attacks of September 11, 2001, the economy quickly came to a halt, and auto shipment values fell to $86.5 billion in 2001. Automobile manufacturers responded aggressively by offering such incentives as zero interest rate loan opportunities. Industry shipment values rebounded to $90.7 billion in 2002.

Despite the economy, which did not recover as quickly as expected, the automobile industry remained relatively stable. However, this segment of the parts industry faced the rapid withdrawal of demand for new and rebuilt carburetors. Pistons became the category leader, replacing the once-dominant carburetor sector. Although carburetors continued to be used within a narrower field, they were no longer a driving force within the sector.

After declining significantly during the early 1990s, shipment values grew in the late 1990s, increasing from $2.7 billion in 1997 to $3.3 billion in 2000. Shipment values then declined sharply to $2.1 billion and $2.0 billion in 2001 and 2002, respectively. Further economic hardships took their toll on the American auto industry resulting in a drop in sales to $1.5 billion by 2006. In 2008, despite a global recession that devastated the American auto industry, revenues increased modestly to $1.8 billion. Industry employment also fell off sharply in the early years of the first decade of the 2000s, reaching a five-year low of 11,982 in 2002, down nearly one-third from 17,706 in 1998. While revenues did not rise, employment increased in the middle of the decade, reaching 14,880 in 2006 before plummeting to 9,693 in 2007. The auto parts sector remained a challenging industry due to stiff competition and price pressures. Although piston and valve sales held steady during the mid-years of the first decade of the 2000s, carburetor sales continued a gradual, steady decline.

In 2008 pistons, piston rings, and piston pins accounted for nearly $1.8 billion in sales, up from $1.2 billion in 2002. The shipment value of carburetors, both new and rebuilt, totaled $248 million in 2006, up from $173 million in 2002. Valve shipments totaled slightly more than $124 million in 2006, down significantly from $431.6 million in 2002.

The auto parts industry faced a number of challenges in the later years of the first decade of the 2000s. Parts manufacturers traditionally operate on a very low profit margin in their dealings with auto manufacturers, and there was concern that the continued high price of steel would squeeze profit margins even further and make international competitiveness difficult to achieve. According to the International Trade Administration, such conditions prompted nearly 300 acquisitions and mergers in the auto parts industry in 2010. The previous high had been 275 in 2007. Further complicating the scene was the economic recession that began in 2008 and the near-demise of the largest three auto makers (Ford, Chrysler, and General Motors).

Current Conditions

According to Dun and Bradstreet, in 2010, 388 U.S. establishments manufactured carburetors, pistons, piston rings, and engine intake and exhaust valves. Together these firms employed a total of 11,135 people and generated $594 million in revenues. Although 71 percent of the businesses that manufactured carburetors, pistons, piston rings, and valves employed fewer than 10 workers in the early 2010s, the small portion of large companies that employed more than 100 workers accounted for approximately 63 percent of sales. The leading states by revenue were Ohio ($209.9 million), Michigan ($100 million), and California ($70.9 million) Pistons and piston rings represented the largest portion of the market, with $270.8 million in sales, followed by valves with $133.7 million and carburetors with $18.2 million.

The auto parts industry was aided by the beginning recovery of the overall automobile industry in 2010. Approximately 11.5 million vehicles were sold in the United States in 2010. Accordingly, based on figures from the International Trade Administration, U.S. sales of auto parts in the OEM market were up 36.5 percent in 2010, reaching $141.5 billion. The U.S. aftermarket parts market, which ranged from $62.0 billion to $78.1 billion in 2010, also saw an increase. Although the auto parts industry was considered to be in recovery, industry experts forecast a slow upturn.

America and the World

U.S. suppliers of auto parts faced increasing competition from foreign suppliers. In 2010 the United States exported $58.1 billion in auto parts, an increase of 36 percent from the previous year. NAFTA partners Mexico and Canada were the primary markets. U.S. imports, on the other hand, were worth $90.9 billion, which represented a 44 percent increase. Mexico and Canada, as well as China, were the primary sources for imported parts.

Research and Technology

According to some industry participants, expansion of the U.S. automotive parts industry will come only by responding to demands for improved technology and products--technology that will produce a lighter, fuel efficient, and environmentally friendly vehicle. In response to the Clean Air Act of 1990 and other legislation, composite materials--plastics, carbon fibers, and other substrates--were developed by the industry. The main goal of the government's Partnership for a New Generation of Vehicles was an affordable mid-sized passenger vehicle able to travel 80 miles on a gallon of gas. The project was cancelled in 2001; however, the big three auto makers did manage to create such a vehicle, although GM was the only one that reached the 80-mile goal with the Precept; Ford's Prodigy and Chrysler's ESX-3 could go 72 miles on a gallon. New technologies that used lighter materials and more fuel-efficient delivery and exhaust systems continued to be developed into the early 2010s.

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