Bringing a global perspective to the aftermarket industry

Mort Schwartz, director-at-large and chairman emeritus of GAAS, calls this year's symposium "truly global" in scope. As someone who is committed to making each year's GAAS program better than the last, Schwartz feels that the challenge is well worth the undertaking — as it reflects the changing face of the aftermarket today.

"This year has had a truly global effect, with presentations from visitors from Germany and China," he says. "We will continue to bring in people from all over the world to continuously improve the GAAS program."

The decision to invite more global guests to the symposium was a conscious one, says David Caracci, GAAS chairman and chairman of the University of the Aftermarket Foundation.

"That's the way the industry is going," Caracci explains. "There isn't a supplier, or even a vendor, at this event who isn't looking at markets around the world as well as the competition coming into North America from around the globe."

Pete Kornafel, GAAS scholarship committee chairman and vice chairman of CARQUEST, says the biggest global opportunity the U.S. market faces is that it will continue to become a smaller percentage of the global automotive aftermarket as China, India and other emerging countries increase their vehicle parc.

"It will take years for these countries' aftermarket industry to rival ours, but they are gaining ground very quickly," he adds. "We all may have to look beyond our borders for long-term growth."

Globalization for the sake of globalization isn't necessarily a good thing, says Steve Handschuh, president and chief operating officer of the Automotive Aftermarket Suppliers Association (AASA). Instead, Handschuh is a fan of "responsible" globalization, which he says involves all members of the supply chain being informed about their companies' global strategies and being able to feel confident in the way these strategies are being executed.

Brian Cruickshank, director of the University of the Aftermarket at Northwood University, adds that the continued globalization of the market is one of the most pressing issues facing the aftermarket today. But although this poses many challenges, Cruickshank says it also offers great opportunities.

"There are opportunities for just about everyone in the supply channel, from jobbers to WDs and program groups, and of course, manufacturers," he says. "Smart, well-thought out strategies will help domestic aftermarket companies survive in a global marketplace."

Pain at the pump means new opportunities in the shop

But can the aftermarket survive with the cost of gas skyrocketing to almost unheard of levels? Surprisingly, the answer is yes.

"Many of our manufacturer members are struggling as the cost of raw materials and energy continues to rise," says Kathleen Schmatz, president and chief executive officer of the Automotive Aftermarket Industry Association (AAIA). "But our repair shop members are still busy, even though our research would say that Americans are considering driving significantly less."

Why is this? Simple, say industry experts. With the cost of everything rising, drivers are trying to save money. New car sales are down, and consumers are turning to independent repair shops to keep their cars running longer — which means putting off the purchase of a new vehicle as long as possible.

"I think that the pricing of oil and the impact on gasoline prices is a global issue, not just a domestic issue," says Jack Creamer, GAAS director-at-large and president of Distribution Marketing Services. "When people don't buy new cars, they have to keep their old cars running. So, if you're going to drive, you have to take care of your vehicle. "

Creamer adds that with the sharp fall-off in new vehicle production in recent years, the vehicles on the road and in the car parc in the aftermarket will grow.

Education is key, says Marc Brazeau, president of the Automotive Industries Association of Canada (AIA). "We have technicians that need to be trained on an ongoing basis, service advisors who need to be kept up to date and counterpeople who need to be trained regularly, especially as customer service becomes key to our industry. Education for both customers and aftermarket employees is critical."

With the car parc rapidly aging and consumers unwilling to purchase new cars, the aftermarket is poised to step in and provide real solutions that will help consumers make their cars more fuel efficient. One of the ways in which the industry can do this is through the work of the Car Care Council and its "Be Car Care Aware" campaign, which has educated consumers — through practical maintenance tips and guidelines — about taking better care of their vehicles so they run more efficiently. The upcoming launch of the group's "Drive Smart, Save Money" campaign will further drive home this message, and will advocate proper maintenance to cut fuel costs and to help all of the vehicles on the road run more efficiently.

Unfortunately, while the repair shops may be using the downturn in new vehicle sales to their advantage, higher fuel prices mean increased hardships for distributors and jobbers.

"Higher fuel prices are going to eventually have a major impact in the logistics of moving products around the globe," says Tim Sturdevant, GAAS director and president of SAE Warehouse/Sturdevant's Auto Parts. "Moving raw materials around the world is going to become very expensive. My hope is that the cost of such a process will help domestic manufacturers start up new factories and be able to keep them going in the U.S."

Using technology to foster collaboration, education

"The aftermarket needs to consider these challenges as opportunities," Schmatz says. "There's a lot of room for innovation and new product development within the industry."

But not only is telematics changing the industry, communication technologies are forcing aftermarket players to change the way they do business. For example, says Creamer, the environment has become much more collaborative within just a few short years.

"Now, distributors and manufacturers and jobbers all talk to each other on a daily basis. And all of a sudden, there's a new cousin to the aftermarket — the Internet, and with that, Internet auto parts sales. Who ever heard of Internet auto part sales five years ago? To me, this means that the communication system in this industry is pretty damn good," he says.

Sturdevant agrees: "If we can use technology to get more of our databases online and our product offerings directly to the professional technician as well as the DIY-ers, we'll be in a better position to help professionals as well as consumers maintain their cars."

Along with advancements in communication have come advancements in technology that have positively impacted educational institutions, says Cruickshank. To illustrate how aftermarket institutions are using this new technology to their advantage, Cruickshank points to the interactive, Internet-based educational program The University of the Aftermarket is in the process of developing. The program will incorporate some of the most advanced distance learning tools available, he adds.

No matter what the issue, it boils down to education. Education for manufacturers, suppliers, jobbers and consumers, who must work together to keep America's cars on the road.

"This is going to be a make-it-or-break-it three to five years," Schmatz says. "Companies are fighting to protect and control their part of the business. If the automotive aftermarket can band together and communicate its message to the consumer, to commit to becoming a steward of life-long education, we can extend the reach of the aftermarket in the years to come."