Putting things in historical perspective

Jan. 1, 2020
As program groups emerged, no longer did distributors grovel for the privilege of selling a product line.

What has been the single most remarkable development in the evolution of the automotive aftermarket?

This edition of The Aftermarket Manual is an important and impressive undertaking. I have often lamented the lack of a market history when bringing a new associate up to speed on this industry. I acknowledge the effort mounted by my peers to provide this much-needed tool. I will let you readers judge if the resulting product is as impressive as the undertaking.

Reading the text that has become this issue, I was struck by the remarkable changes this industry has undergone in its relatively short history. I started pondering which one was the single most remarkable development in the evolution of the automotive aftermarket.

I considered several subjects, including design and engineering developments, the rise of computerization, changes in distribution practices and the emergence of retailers in what historically was a "trade" business before I settled on the rise of program groups.

Program groups have done more to change this industry than anything occurring in the last 50 years. To really appreciate the role they have played, one need only look back about three decades. In the 1970s and well into the 1980s, the power base of the aftermarket resided with manufacturers. Manufacturers regularly decided the fate of distributors with decisions of to whom to sell and to whom not to sell.

With the emergence of program groups, things began to change. No longer did distributors grovel for the privilege of selling a line. The influence they wielded as a part of a group leveled the playing field. Let me make my point by sharing a story about a meeting I was in back in the late 1970s.

The principal of what was then about the second largest group had just laid out a pitch he was going to make to a very large supplier and asked me what I thought. I responded delicately, but made it pretty clear I thought his demands were over the top and he would be rejected out of hand.

He said to me, "You talk like you think that the manufacturers have all the power." Stuck in the paradigm of the time that manufacturers were the center of the universe, I asked him what he would do if this supplier chose to no longer sell to his group. He replied by naming several of the large markets where his group had leading WD members, followed by: "What is he going to do when we tell him if he won't do this deal, we already know his competitor will?"

That's when I realized the power center was shifting. That power shift has continued over the years. Some have argued that the center of gravity is now firmly beneath the groups. Perhaps it is. Perhaps some groups think they make the market. Perhaps some manufacturers think they are the driving force. But as with all things, be it nature, politics or business, balance is best. We are better off when we view ourselves as a supply chain with a single customer to serve: the person who throws away the box. If we keep in mind that gravity is beneath the customer, we will all be better off.

Bob Moore is president of Bob Moore & Partners, a consulting firm that specializes in the automotive aftermarket. Moore can be reached at [email protected].