Cv Shaft & Rack Review 1999: The Numbers Speak For Themselves - Engine Builder Magazine
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Cv Shaft & Rack Review 1999: The Numbers Speak For Themselves

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The numbers speak for themselves. The annual replacement market for front-wheel drive axle shafts, all-wheel drive axle shafts and four-wheel drive shafts is estimated to be around 12 million units a year and growing with total sales in excess of $450 million. Within five years, the number of shafts being replaced is predicted to grow by more than 30% to nearly 16 million units.

But nobody knows what the total sales volume will be because of slipping prices. It could be as low as $500 million or as much as $640 million. Everyone agrees the replacement market for axle shafts is huge and growing day by day, but profit margins are tight. Warehouse distributors are paying as little as $32 to $35 for reman axle shafts in some areas of the country. At such prices, a growing number of rebuilders are finding shafts are not very profitable.

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The numbers seem to favor large high volume rebuilders who can efficiently remanufacture shafts in quantity. Consequently, some of the largest rebuilders are becoming even larger and are gaining market share by acquiring or buying out other companies. Mark Bourgeois, vice president of Car Component Technologies (CCT) in Bedford, NH, said he expects to see even more merger and acquisition activity as companies struggle to cope with the economic realities of today

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