LAS VEGAS — Grades weren't handed out at the end of Industry Week, but there was plenty of learning going on. Automotive Aftermarket Products Expo (AAPEX) attendees took advantage of the variety of seminars, some of which were so packed that extra chairs had to be brought in.
Right to Repair goes global
The aftermarket industry has been closely following the progress of proposed Right to Repair legislation here in the U.S., but there are similar efforts under way in other parts of the world as well.
While the U.S. debate is centered on the proposed Motor Vehicle Owners' Right to Repair Act, there are already existing mechanisms, like the National Automotive Service Task Force (NASTF), that help provide information to independent repairers. In Canada, however, this is not the case, according to Scott Smith, manager of government relations for the Automotive Industries Association (AIA) of Canada. He estimates the lack of access costs repairers $1 billion to $4 billion per year. Repairers there have responded by utilizing third-party information and local workarounds.
Changing outlook ahead for 2008
If the NPD Group's crystal ball is as accurate for 2008 as it was for 2007, aftermarket players might want to take note.
Some expectations David Portalatin, industry analyst with The NPD Group, shared were favorable, including modest increases in total aftermarket spending.
He says the group found consumers spent a little bit more on vehicle appearance in 2007, in line with NPD's predictions. For 2008, Portalatin reports consumers expect to spend an average of $945 on vehicle repair, maintenance and appearance, a 7 percent increase over 2007. The one downside, according to NPD's data, is that the monthly oil change interval is expected to grow from 4.1 months to 4.9 months.
Category management is not a one-size-fits-all option
Successfully implementing a category management program is not as difficult as some may think.
Boiled down to its essence, category management "is simply a business process," says Jon Rubich, VP of marketing services & category management for United Components, Inc. It is not vendor managed inventory (VMI) or something to be approached with a "cookie cutter" mindset.
To implement a successful process involves changing an organization's culture from the top down, with strong leadership at the helm, Rubich adds. Another crucial element to it is data.
Category management is an eight-step process starting with defining the category, assessing its role, analyzing data and determining a plan and finally executing it.
Homework essential to enter market
Henry Allessio doesn't beat around the bush when he talks about the U.S. aftermarket to foreign suppliers hoping to do business in the United States.
"The U.S., has the biggest, and most competitive, aftermarket in the world," says Allessio, managing director of Walden Consultants, Ltd. "Plus, we have a pretty complex business environment. Success isn't a slam dunk for every company; you really have to know what you're doing if you want to compete with the big guys."
By choosing specific customers in the U.S., a supplier's market and pricing levels are defined and could be restrictive.
Allessio suggests would-be suppliers define, in advance, the focus and balance of their resources in relation to sales opportunity.
Safety, quality addressed
Statistics reveal that more than 850,000 importers from 150 countries around the world are importing $2 trillion worth of products into the U.S. annually. And that can be a problem for importers, who under federal law are considered to be the manufacturers of these products and are responsible to initiate the recall of defective products.
Dan Smith, associate administrator for enforcement at the National Highway Traffic Safety Administration (NHTSA), looked at the regulatory and civil issues connected to the importing of aftermarket products and how the aftermarket industry can work with NHTSA on these issues.
NHTSA's scrutiny seems to be paying off. In 2004, Smith says the organization recalled 30 million vehicles due to non-compliant parts and/or defects.
