Global at a Glance

Survival in a global economy...winners and losers

William Strauss, Federal Reserve Bank of Chicago

Passenger car sales have been moving higher, but the light truck market has shown more growth, moving from one of every three vehicles sold to one of every two vehicles sold. Passenger cars are regaining their momentum, partially due to climbing gas prices.

"If we went back to the 1960s and early 1970s, you could see that that percentage share never got down to 6 percent (of consumer dollars spent on energy goods and services), and we're still at this point well below that," Strauss notes. "From a historical perspective, we're still well below the long-term average, which is at 6.4 percent."

Overall, real consumption, consumer sentiment, employment growth and the unemployment rate are doing well, while the real GDP, corporate profits, oil prices, PCE inflation and Fed funds rate all are at a cautionary level. For more information on this presentation.

It's a global aftermarket after all: A multinational perspective

Moderator: Dave Caracci, University of the Aftermarket Foundation

Panelists: David Coolidge, Robert Bosch Corporation

Richard Shiozaki, DENSO Sales California, Inc.

Ricardo Vidal, Grupo Omigron, S.A. de C.V. Labour Consultants Group

Wolfgang Winzer, Siemens VDO

When entering the global automotive industry, a broad-brush approach is not a good mindset, according to this panel, comprising major manufacturers.

"I don't want to lecture anybody in the room, but there is not one single European market to begin with," says Wolfgang Winzer, VP and general manager of Siemens VDO Automotive Corporation Service. "There are a couple of very, very different European markets that you are facing if you ever want to do business there."

Each Latin American country has its own cultural background and accompanying rules and regulations, says Ricardo Vidal, a partner at Grupo Omigron, S.A. de C.V. Labour Consultants Group.

A unifying trend worldwide, however, is the emergence of diesel.

"For the last five or six years in Europe, roughly 50 percent of all new passenger car registrations have been diesel," says David Coolidge, president of Robert Bosch Corporation's automotive aftermarket division. "It's clear to us that we will start to see increasing demand for diesel and other alternative fuels."

Do you know where you are going to?

Moderator: Steve Handschuh, AASA

Panelists: Rusty Bishop, Federated Auto Parts

Larry Magee, BFRC

Peter Morse, Morse Automotive

David Mueller, (formerly of) Advance Auto Parts

It may be one of the most talked about topics in the industry today, but inventory management still is a top priority up and down the supply chain.

"Inventories are accelerating at a very fast pace due to parts proliferation," says Peter Morse, president of Morse Automotive. "The only way we're going to be able to handle parts proliferation is with true category management."

"We need to begin to forecast together," adds Rusty Bishop, CEO of Federated Auto Parts. "And we need unlimited returns to channel partners who support vendors 100 percent and agree to let the vendors do vendor managed inventory."

Larry Magee, chairman, CEO, and president of BFS Retail & Commercial Operations, LLC (BFRC), suggests a partnership within the supply chain will be even more critical within the next five to 10 years.

Read more analysis from these industry leaders.

What can we learn about service from Lexus?

Nancy Fein, Lexus

Nancy Fein, vice president of customer services for Lexus, points out there are similarities between the OEM and aftermarket industries.

"We are all in the business of taking care of the customers who drive cars and trucks in the United States," she says. "That's our business."

She told attendees that Lexus' survival as an OEM is important even to the aftermarket. And both need superior customer service, not only to survive, but to thrive in today's marketplace.

For example, "in 1989 we delivered free coffee and cappuccino and a car wash when we delivered the car."

But now, delivering a good customer experience means more than that. Lexus now offers loaner car services, roadside assistance and new owner welcome events, among other programs.

Luncheon speaker

Bob Lutz, General Motors

GM Vice Chairman of Global Product Development Bob Lutz had a number of insightful remarks for Global Symposium attendees, the first in which he traced the word symposium back to Ancient Greek, where it means "drinking together."

His main message, however, is there is plenty of room for everyone in the realm of automotive accessories.

"We encourage anything that generates interest in our cars and trucks," he says, adding that as long as aftermarket products don't infringe on copyright issues or affect safety, GM supports the aftermarket's efforts.

In a follow-up video interview with Aftermarket Business, Lutz predicted an easing of fuel prices in the latter part of the year. "Long term, I don't think fuel prices will stay at $3 a gallon," says Lutz, who takes issue with the increasing fuel economy standards being imposed by the federal government.

He also posits that the vehicle of the future will resemble the Chevrolet Volt, a concept car with a rechargeable electric drive system that can be configured to run on gasoline, electricity, hydrogen, ethanol or biodiesel. For a more in-depth look at Lutz's presentation, see our cover story.

It's a new ballgame: Which team is winning the service and repair battle?

Dennis DesRosiers, DesRosiers Automotive Consultants

Businesses at every level of the automotive aftermarket distribution channel are trying not to strike out with their customers. But making a connection when you're a service provider is one of the most challenging things to accomplish.

Dennis DesRosiers, president and founder of DesRosiers Automotive Consultants in Ontario, Canada, says the keys to working with consumers are getting work done right the first time and on time, building trust and confidence, showing the consumer the service advisor/technician relationship, offering a fair price and providing guarantees. If a service provider can do this, his or her business will be able to compete with dealerships.

There are a couple of ways to target business, such as the oil change and vehicles post-lease. With vehicles lasting longer, there are more owners per vehicle, meaning more chances for work.

For more information on battling dealerships.

Changing the culture in aftermarket training: Perspective of the independent repairer

Moderator: Ron Pyle, ASA

Panelists: Douglass Kirchdorfer, AAM, Downing Street Garage

Victor Tarasik, Vic's Precision Automotive

Bill Tyson, Bill Tyson's Auto Repair

George Witt, AAM, George Witt Service, Inc.

For service dealers, having a well-trained frontline is of utmost importance.

Others thought George Witt was crazy when the owner of George Witt Service, Inc., in Lincoln, Neb., decided to close his shop and take all his employees to a two-day NAPA time management class. But the decision paid back in dividends.

Panelists say in order for shops to have well-trained staff, other links in the supply chain also should be properly trained — from the manufacturer, to the WD and jobber, all the way over to the technician.

The panel notes that when a shop is staffed with well-trained technicians, it has positive repercussions for the distributor, because it can also lower return rates.

For a more detailed analysis of this presentation.

R.L. Polk & Co. Efficiency Awards

Mike Gingell, R.L. Polk & Co.

The implementation of industry data standards will help you communicate with your customers and will make your company more disciplined and efficient, suggests Dennis Welvaert, president of Dayco's North American Aftermarket Division, who accepted an R.L. Polk & Co. Aftermarket Inventory Efficiency Award on behalf of his company.

This year's entries, according to Polk, all demonstrated an outstanding commitment to increasing inventory efficiency, but only two companies, Dayco Products, LLC and NAPA Auto Parts, walked away with the awards.

Polk designed the Efficiency Awards to create a process to drive best practices and to encourage knowledge sharing within the industry. According to Mike Gingell, vice president of strategic markets for R.L. Polk & Co., the awards give companies that make a positive impact on the inventory issue a chance to educate, motivate and inspire others within the industry to do the same. For more on these awards.

From 2 wheels to 4 wheels at break neck speed...what's ahead from the next generation of customers

Cynthia Cohen, Strategic Mindshare

Take Generation Y and mix in a little bit of Speeder, and you have what Cynthia Cohen refers to as the "newbies" — new car owners with lots of disposable income to spend on cars and accessories.

Newbies are plugged into their computers and cell phones 24/7, and take expressing their individualism seriously. This generation is known by the brands they keep, and the smartest move a company can make is to earn their brand loyalty and market share.

Newbies respond well to online promotions and use the 'Net to compare product prices. They are early adopters, and are willing to spend their disposable income on technology.

Technology standards for a flat, fast and efficient aftermarket

Moderator: Keith Pretty, Northwood University

Panelists: Andreas Assmann, TecDoc Informations System GmbH

Jim Gerber, AP Exhaust Products

Nick Porrini, Technologue, Inc.

There are many factors that make the world "flat," says Northwood University President and CEO Keith Pretty, referencing the Thomas Friedman book.

"The global aftermarket is, indeed, flattening, and it's flattening because of things like HTML," says Pretty.

Nick Porrini, president of Technologue, provided an industry recap of data standards and discussed the findings of the Aftermarket Data Vision (ADV), where those involved realized that the industry may have perpetuated the problem and now needs to collaborate.

Jim Gerber, vice president of AP Exhaust Products, discussed how a partnership with a software development firm in India placed the company in a place to serve customers effectively, and with higher quality data. "In India, when you quit working, they begin working," he adds. "When you come in the next morning, the problem is resolved."

Andreas Assmann, vice president of information management and consulting with TecDoc Informations System GmbH, offered a European view of data standards compliance.

"The mission of TecDoc is based on standardized data structures to make it easy to find automotive spare parts," Assmann says.

Meeting the needs of today's vehicle owners

John Nielsen, AAA Automotive Repair, Buying Services and Consumer Information

Nielsen says the most important factors drivers have when choosing a maintenance facility are convenience, price, speed of service, habit, reputation, trust and advertising.

"It takes something catastrophic to make them go out of their way and not use a facility again," he says.

The biggest reasons drivers are dissatisfied with service are the time it took, fairness of charges and a vehicle's cleanliness after service. Fairness of charges also is the biggest factor in determining where to take a vehicle to be repaired.

Knowing these things, he says, the aftermarket can survive by taking time to understand a driver's needs and being honest with them, making it easy to do business, showing the driver their car and building a brand.

Relating, not translating: How to market to U.S. Latinos

Kelly McDonald, McDonald Marketing

The Latino population is the fastest growing population in the U.S. today. At last count, 43.5 million Latinos called the U.S. home — making the U.S. the second largest Hispanic country in the world.

Those 43.5 million Latinos are a virtually untapped source of income for aftermarket professionals, says Kelly McDonald. The president of McDonald Marketing encourages WDs, jobbers and retailers to roll out the welcome mat for this fast-growing ethnic minority by hiring Spanish-speaking staff, displaying bilingual signage and presenting key information about products and services in Spanish and English.

"It's not just about taking whatever you're doing and translating it into Spanish," McDonald says. "It's about showing that you're Latino-ready and Latino-friendly, and training your staff for cultural sensitivity."

For more on multicultural marketing strategies.

Be Car Care Aware update

Jay Burkhart, Federal-Mogul Corp.

With one of the best runs in its current attack on the industry, the Car Care Council's "Be Car Care Aware" campaign is not slowing down.

In fact, the goals for the campaign include doubling the number of Car Care Guides in print by fall with an additional 2 million, and tailoring the guide, which launched last year, to key consumer segments, such as retirees and new drivers, says Jay Burkhart, senior vice president global aftermarket, Federal-Mogul Corp.

Other goals include getting channel partners to further integrate the campaign into their programs, driving more media exposure, redesigning the CarCare.org Web site and leveraging Internet search engines to drive site traffic.

"The environment's changed a lot in the last 36 months," Burkhart notes. "With the price of gas and the growing consumer concern with sustainability and environment, we might have to change our message."

University of the Aftermarket Leadership 2.0 team competition: "How to survive in the changing aftermarket"

Team QUADRIVIUM: Brian Funke, R.L. Polk & Co.; Gerald Kottke, Delphi; Dan Rader, CARQUEST; David Redeker, Federal-Mogul Corp.; Tim Sturdevant, S.A.E. Warehouse

Team G2: Jeff Blocher, Affinia Group; Aaron Fisk, APH Warehouse; Don McEntee, SKF; Michael Schwab, NGK

The two winning teams from the University of the Aftermarket Leadership 2.0 program gave presentations on survival in the changing aftermarket. Team G2, also known as "The Change Agents," introduced an innovative way to cope with globalization and flatten the aftermarket supply chain: Form a separate and dedicated organization to provide accurate and timely application data to manufacturers, WDs, program groups, jobbers, retailers and technicians.

Team Quadrivium's presentation focused on the industry's struggle to instill consumer confidence and convince vehicle owners that aftermarket businesses can provide the same level of service as dealers, if not better.

Perspectives from Wall Street

Tony Cristello, BB&T Capital Markets

Why survive when you can thrive?

Tony Cristello, senior vice president of BB&T Capital Markets, says the automotive aftermarket is thriving in Wall Street's eyes. The aftermarket grew at a 4.2 percent compound annual growth rate from 1997 to 2007.

"That's a very, very strong growth rate for an industry. You talk about GDP growing at 2 percent," he notes. "You're outgrowing the economy. Investors want to participate in a market where they find stability and they find long-term growth, and this is one area where they can."

Investors focus on industry drivers — performance, valuation, market size and stability. Another item to consider when looking at the future of the aftermarket is the possibility that cores might have to be reevaluated, Cristello offers. See Cristello's column.