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2009 Machine Shop Market Profile - Part One

As the debate over bailouts, bankruptcies and generally bad policy concerning the automotive aftermarket continues in Washington, engine builders may well shrug their shoulders and say “welcome to our world.”

As the debate over bailouts, bankruptcies and generally bad policy concerning the automotive aftermarket continues in Washington, engine builders may well shrug their shoulders and say “welcome to our world.”

Now that new car dealers and manufacturers are taking it on the chin because many consumers have apparently decided that “making do is better than buying new,” there is increased optimism in many segments of the service sector. For engine builders – who have been operating in a challenging environment for several years now – the opportunities to be both economically and ecologically friendly have never been better, and some positive signs are emerging.

For more than 20 years, Engine Builder magazine has surveyed the same machine shop/custom engine rebuilder (CER) population to get a picture of the scope of this industry. Admittedly, each year we’ve had to use a slightly smaller lens but the results have continued to be interesting.

Because of the decades of data we’ve collected, we believe the information in this study is the most reliable data available for tracking trends in the production of engines, cylinder heads and crankshafts, as well as specific business data.

The data generated for this year’s Machine Shop Market Profile was collected through survey questionnaires sent to the machine shop/custom engine rebuilding membership of the AERA. Four different questionnaires, consisting of four pages each, were developed to obtain the information contained in our profile.

Each questionnaire was mailed to one-quarter of AERA’s rebuilding membership, selected on a random-start Nth-name basis. A total of 1,830 appropriate usable outgoing questionnaires were sent out in early January.

A total of 203 completed questionnaires were returned,  resulting in a return rate of 11%. Analysis of the data was completed by Babcox Market Research.

The survey information reflects data for production year 2008. Part I of this two-part profile includes data on monthly production of engine blocks and cylinder heads, broken out by engine size as well as by gas and diesel configurations, crankshafts, core sourcing, shop equipment ownership and purchasing, and total production time spent in specific engine building areas.

As engine technology has improved over the years, this industry has suffered, and there is no way to recapture the glory of the past decades in terms of numbers. But opportunities still exist for at least three reasons: people need their vehicles to run properly, there is currently no viable alternative to the internal combustion engine and the competitive fire still burns inside many people, meaning being bigger, faster and louder than the next guy still matters.

This isn’t meant to imply that the statistics surrounding this market are markedly better – in fact, in many instances declines are significant. But since we’re looking at data that reflect last year’s position, there is every reason to believe that changes in the economy now are already starting to have a positive impact.

To download the complete story, click here for the PDF.