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Volume 7    Issue 5        September/October  2005

Market Sees Increase in Number
Of Suppliers, Price Changes
by Charles Cumpston

The market is changing with new suppliers entering and prices in flux due to steep jumps in raw materials costs (and that additional competition in the market).

“Like a lot of other parts of the industry, the mouldings area has become very competitive,” states Joseph Gold, vice president/owner of Gold Glass Group, Bohemia, N.Y. “A lot of new players have come into the market.” 

Industries in general are seeing a lot of competition from off-shore countries. Is that the case here? “There are more foreign than domestic, but there’s a lot of domestic competition as well,” according to Gold.

Edwards Lin, general manager, Yih-Tair Industrial Inc., San Antonio, Texas, which makes FlexLine windshield mouldings, says the market has become much more competitive than when his company entered it in 2000. 

Brad Gross, senior account and product development manager at Creative Extruded Products, Tipp City, Ohio, adds, “We are definitely seeing more competition from overseas. And not as many products are being made in the U.S.”

Martin Bobinger, sales manager with Precision Replacement Parts in Monroe, Wash., also sees increasing competition with additional mouldings suppliers coming into the market.

A World of Suppliers
According to Gold, there are companies trying to get into the moulding market from such diverse locales as Taiwan and China, India and Thailand, Spain, Brazil and Venezuela. But domestic companies are trying to get into this market too, he adds, as an expansion of their extruder operations. “Extruders may go into a wide range of industries because they need economies of scale to make any money doing this. They’ve got capacity,” he explains. “A company couldn’t just make mouldings for the auto glass market and stay in business,” he says laughing.

Edwards agrees that economic conditions do play an important role in the mouldings market and that shops and suppliers are looking for the best pricing without having to sacrifice product quality.

According to Gold, prices have gone down because of the increased competition. “Mouldings are oil byproducts, whether they are vinyl or rubber,” he explains. “I have heard that while up to now prices have been going down, down, down, increases in raw material prices may force them to go up. All the profit has been squeezed out of the product and now with the increase in raw material prices, there is no choice but to raise prices,” he states.

With oil and transportation costs on the increase Edwards says it is still difficult to foresee a price increase in the mouldings market. Even with raw materials costs rising 25 percent this year Edwards feels this is giving more incentive for manufacturers to be more “competitive” while still trying to stabilize prices.

Gross states that his company has had multiple price increases from its suppliers, but the company is constantly looking at how it can improve its processes to minimize the impact of these increases on its customers. “We have no price increases to announce at this time.”

“Recently we were challenged by our suppliers with a hefty price increase due to additional cost of raw materials like oil,” Bobinger points out. “We had to pass a moderate increase on to our customers, but at the same time we also changed our list pricing. The average increase was about 3 to 5 percent. With costs of raw material rising, it is possible that we have to face an increase in the near future again.”

Chris Parkinson, director of operations for PerfecTrim Moldings, Hayward, Calif., makes the point that there’s always at least one company which is trying to get market share through pricing. “That makes it difficult for prices to go up,” he said.

It’s the Quality Thing
“I see a lot of competitive mouldings coming out, but you have to be cautious about quality. We try to use the highest quality material in the market,” Bobinger adds.

On the issue of quality, Gross reports that he is getting feedback of problems with lower grade products.

Gold states that, like the AGR industry, the influx of new competitors has had a major impact on the moulding distribution system. “Distributors will only carry so many moulding lines. Manufacturers are then forced to try to sell to the end user directly. Often there will be very little product support. This all leads to further price erosion,” he states. 

However, Bobinger sees it differently. “I do not see a big change in the current distribution of mouldings. We sell to distributors all over the nation and they usually stock our product to have it available for the glass technicians. 

Typically a glass technician needs the moulding right then and there. He simply cannot wait a few days for a moulding. However, we noticed that more and more glass installers are willing to stock our most popular products to make certain that they really get our product.

Most of the current technological changes in mouldings are related to the recent use of PAAS (Pre Applied Adhesive System), Gold points out. “While this system obsoletes the use of mouldings for replacement, there are a bunch of new moulding products available for when the system gets damaged during remove and re-sets.”

According to Gross, variable moulding technology, which was popular in the late 1990s, is going out and the edge-of-glass look is becoming more popular particularly in Ford and GM vehicles.

What about part-specific mouldings? Precision’s Bobinger points out that there are many different vehicles on the market, much more than a few years ago.

“The result is that individual models of vehicles do not get produced in huge numbers anymore. From a moulding production point of view—more individual parts, but less quantities. On the other side a lot of vehicles do not take mouldings anymore, such as on encapsulated windshields. But this trend seems to be reversing,” he explains. 

Yih-Tair Industrial is in the process of developing more OEM-style “part-specific” mouldings for use in the future mouldings market, Edwards reports.

Parkinson sees more competition coming into the universal market because “they’re very popular.” But he also sees the part-specific market growing.

The Final Fit
People should be looking for two things, according to Gold: quality versus price (a comeback costs you money). “A bad quality moulding does not save you money and most people realize that. You just want to get that car in and out. What’s important is availability, packaging, in-stock, quality,” he states.

Bobinger agrees. “If a glass installer has to redo a job because the consumer is not satisfied or the moulding simply fails, he lost the profit for at least three installations.”

People want a product that is easy to use, Gross points out. “As an owner, you don’t want your technicians to spend five to ten minutes struggling with the moulding. You also don’t want callbacks just because you saved a buck on the moulding. The costs to a business of callbacks due to moulding can be hard to quantify and not everyone tracks these charges adequately,” he adds.

But they take away from a company’s bottom line, and undermine its reputation for quality, satisfaction and safety. 

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