Low cost battery makers will lose out to OEMs

Battery bosses say that OEM producers are set to dominate the market at the expense of some low-cost Far Eastern manufacturers due to rapid advances in battery technologies.

The move towards technologies such as AGM and lithium will enhance the position of the large OEM battery and aftermarket manufacturers such as Yuasa, while many of the smaller low-cost producers will be unable to gain a foothold due to the investment needed.

Speaking exclusively to CAT for the magazine’s battery sector report, Yuasa’s James Hylton said: “About 60 percent of the UK’s car batteries come from the Far East. At present the weak Euro is handing a competitive advantage to European producers who can sell more competitively to the UK in the short term.

“In addition, when the lead cost changes, European manufacturers with short supply chains react quickly whereas far eastern manufacturers with much longer supply chains follow several months later. This applies to both increases and decreases.

“Currently European manufacturers are benefiting from a decreasing lead cost and a weak Euro, but these are short term issues and inevitably things will come full circle.”

The aftermarket is well accustomed to the volatile nature of battery production and changing cost cycles so it is far more important for the trade to grasp the ramifications of rapid advances in battery technology, according to Hylton.

“Vehicle manufacturers are setting down unique criteria for batteries for each new car and OEM battery manufacturers are developing these batteries on a case by case basis,” he explained. “This means that batteries, like ECUs, are becoming vehicle specific.”

“As the pace of change inevitably becomes more rapid, current low-cost aftermarket battery manufacturers won’t have the time or the investment to produce low-cost alternatives.”

“In conclusion, the trade would need to align themselves with a major OEM battery manufacturer in order to ensure that they continue to have the product and the know-how required to replace these increasingly complex parts.”