Okay then… looking only at market cap as the criterion and not sales. The actual stock industry category according to Forbes is “Small Tools and Accessories” in the “Industrial” sector. Not all of these are automotive, but let’s just go through the list one by one until we hit what we’re looking for.
1. Black and Decker Corp $6.7B market cap – not primarily automotive
The Black & Decker Corporation engages in the manufacture and marketing of power tools and accessories, hardware and home improvement products, and fastening and assembly systems worldwide.
2. Makita Corp $4.5B – not primarily automotive
Manufactures power tools, including portable woodworking tools, primarily saws and planers, and portable general purpose tools, primarily drills, grinders and sanders.
3. Stanley Works $3.9B – not primarily automotive
The Stanley Works produces various tools and security products worldwide.
4. Snap-on Inc $2.3B – mainly aimed at automotive market though now expanding into others
Snap-on Incorporated engages in the innovation, manufacture, and marketing of tool, diagnostic, and equipment solutions for professional tool and equipment users.
Ok then… there’s the company with the largest market cap but we don’t know if it is really 50%. To do that, we have to research ALL the other car tool manufacturers and that’s a lot of research, unless I want to pay big bucks to a broker for his market research. Let’s see if I can find some info another way.
The direct competitor comparison features B&D, Danaher, and Stanley Works. Can’t use that data since Danaher is a conglomerate and not primarily automotive. But this also points out a possible fallacy in what the tool dealer told you. Just because a company isn’t primarily automotive doesn’t mean that it isn’t an automotive industry leader. It’s just harder to tell exact market positioning because you have to go deep into the company division records to get the actual figures for comparison, and market cap comparisons are impossible in such situations so you must rely on more traditional figures like production and sales.
What other acceptable and hopefully accurate source can we access for free? How about the company’s own annual report which can be found on its corporate web site.
In the 2005 final Annual Report you’ll find the following:
“The major competitors selling to professional technicians in the automotive service and repair sector through the mobile van channel include MAC Tools (The Stanley Works), Matco (Danaher Corporation), and Cornwell. Snap-on also competes with companies that sell tools and equipment to automotive technicians through non-mobile van distributors including department stores (such as Sears, Roebuck and Co.), home centers (such as Home Depot, Inc. and Lowes Companies, Inc.), auto supply outlets (such as AutoZone, Inc. and The Pep Boys), and tool supply warehouses (such as Stampede and ICN). Within the power tools category, Snap-on’s major competitors include Ingersoll-Rand, Black & Decker Corporation, Bosch, Makita Corporation, Chicago Pneumatic (Atlas Copco), and Milwaukee Electric (TechTronic Industries Co. Ltd.). In the industrial sector, major competitors include Armstrong (Danaher Corporation), Proto (The Stanley Works), Irwin (Newell Rubbermaid), Cooper Industries, and Westward (W.W. Grainger). The major competitors selling diagnostics and shop equipment to shop owners and managers in the vehicle service and repair sector include Corghi S.p.A., Fluke and Hennessy (Danaher Corporation), Robinair (SPX Corporation), OTC, Hunter Engineering, and Rotary Lift and Chief Automotive (Dover Corporation).”
Obviously, these aren’t strictly automotive companies, but don’t forget that neither is Snap-on, which is increasingly expanding into other areas. They make note of it in their annual report: “Our products have earned the trust of the everyday heroes who make our assembly lines run, put up skyscrapers, supply our energy, maintain our shipping and airline fleets and help keep the global economy moving.”
So, taking into consideration the conglomerates who are nevertheless also playing big leading roles in the auto industry, Snap-on’s expansion into non-automobile sectors, and its own annual report, I can only conclude that it does NOT actually have 50% of the automotive tool market capitalised in the USA.
Feel free to disagree with me.
