Motor Age: How has the globalization of information and markets affected how SPX pushes its diagnostics processes forward? Has it made product development easier or more difficult?
Arfi: Globalization of information and markets does make product development and ongoing technology and information content leadership more challenging. We have a global footprint which allows us to keep pace with the changing requirements for diagnostic solutions by region. We are the only company in the industry that has close working relationships with automotive OEMs, providing diagnostics support to them globally and also providing the most comprehensive diagnostic productivity solutions to the independent aftermarket. Whether the repair facility is an OEM garage in China, a franchised aftermarket shop in Cleveland, a one man operation in Italy or a DIYer in Missouri, our core competence is providing them with the appropriate diagnostics platform and the appropriate diagnostics and repair information.Motor Age: How is SPX using advancing technologies in its tool offerings? What kinds of technologies are offered?
Arfi: We are known for being the technology leaders in the marketplace. We are continually working towards commercialization of advanced technology, like hardware and components and migrating these over from consumer electronics on to our tool platforms. Several advanced technologies are now integrated into our diagnostic tools like wireless communications and connectivity; touch screen and advanced user interface; J2534 reprogramming capability; (and) "sim scroll" technology to allow techs a quick and easy method to scroll through long data lists, etc. The key advanced technology offering we are most excited about is our leadership in providing information to the tech at the fender. Information is no longer static, and although there is an abundance of information on the Web, it is our ability to narrow the information down to the pertinent specific malfunction and provide it in a user-friendly way on the tool itself that is a key differentiator.
Motor Age: In your view, what are the biggest obstacles shops face this year, and what can they do to overcome them?
Arfi: The uncertain economy and lagging consumer confidence may cause an increase in deferred vehicle maintenance. The business uncertainty caused by the current economic climate makes it difficult for repair facilities to make large capital investments in their business. With such uncertainty comes great opportunity, and it is the shops that invest today in productivity solutions that will be best positioned for success in the coming years. Miles driven trends and repair spend are already showing signs of stabilization, and the realignment of repair spend away from OEM facilities means that opportunity will be there for those that are prepared.
Motor Age: If the current economic situation continues, how do you see that affecting shops spending on technology solutions?
Arfi: In our experience, shops and techs who invest in technology and innovative tools deliver reliable service, better quality of repair and improved customer satisfaction. Investment in productivity solutions is a key to shop profitability, and deferring a productivity investment has the risk of causing a shop to fall behind.
As OEM dealer service bay counts decline with the consolidation of dealership locations in North America, the need for technology and tools that allow the tech to more quickly determine the problem and then repair the issue correctly the first time has never been more important. Independent repair shops across the country are experiencing a bump in demand and we are seeing a split in our product mix. Essential productivity tools continue to do well, while discretionary higher price capital investments are being deferred. Another interesting strength in this market is the DIY market. As a greater proportion of the vehicles on the road are those greater than 10 years old, a portion of basic DIFM repair is shifting to DIY, a trend that appears to have some staying power in this economic environment.
Motor Age: What new diagnostic platforms is SPX introducing in 2009? What impact do you expect them to have on the aftermarket?
Arfi: In late 2008 we introduced the revolutionary Pegisys® diagnostics platform for the independent aftermarket. This diagnostic tool is the most advanced technology platform in the marketplace today providing wireless linking to the vehicle and the most advanced and focused diagnostics information/repair content. In 2009, we have announced our new Pegisys PC Scan diagnostics platform. The PC Scan takes the capability of Pegisys and puts it on a PC. This allows the tech to decide if he wants standalone hardware or to simply utilize his existing laptop. Early adopting technicians have been diagnosing vehicles with OEM tools via a PC for some time. We are introducing that technology to the independent aftermarket diagnostics. With PC Scan you have the most powerful aftermarket scan tool available, running on the PC of your choice. We expect this technology to have a major impact on the independent aftermarket. With increasingly improved and focused information available to the tech seamlessly, we expect the tech to be able to undertake more complex and advanced repairs including vehicle reprogramming using J2534 hardware.
How has the globalization of information and markets affected how SPX pushes its diagnostics processes forward? Has it made product development easier or more difficult?
Globalization of information and markets does make product development and ongoing technology and information content leadership more challenging. We have a global footprint, which allows us to keep pace with the changing requirements for diagnostic solutions by region. We are the only company in the industry that has close working relationships with automotive OEMs providing diagnostics support to them globally and also providing the most comprehensive diagnostic productivity solutions to the independent aftermarket. Whether the repair facility is an OEM garage in China, a franchised aftermarket shop in Cleveland, a one man operation in Italy or a DIYer in Missouri, our core competence is providing them with the appropriate diagnostics platform and the appropriate diagnostics and repair information.
How is SPX using advancing technologies in its tool offerings? What kinds of technologies are being offered?
We are known for being the technology leaders in the marketplace. We are continually working towards commercialization of advanced technology, like hardware and components and migrating these over from consumer electronics on to our tool platforms. Several advanced technologies are now integrated into our diagnostic tools like wireless communications and connectivity; touch screen and advanced user interface; J2534 reprogramming capability; and "sim scroll" technology to allow techs a quick and easy method to scroll through long data lists, etc. The key advanced technology offering we are most excited about is our leadership in providing information to the tech at the fender. Information is no longer static and although there is an abundance of information on the Web, it is our ability to narrow the information down to the pertinent specific malfunction and provide it in a user-friendly way on the tool itself that is a key differentiator.
What new diagnostic platforms is SPX introducing in 2009, and what impact do you expect them to have on the aftermarket?
In late 2008 we introduced the revolutionary Pegisys
How do your product offerings take advantage of wireless communication between vehicles and tools?
Our Pegisys
Which products, in what markets and with what kinds of businesses are you having the most success so far this year? What is your strategy going into the second half of the year and beyond?
Diagnostics segment remains strong. However, we are continuing to see strong demand for specialty tools, equipment and fluid service also. We have noticed a higher impact of the economic slowdown on more capital intensive investments. Our broad product offering from a function and price perspective remains attractive to the marketplace. In terms of markets, most of our aggressive growth is coming more from several areas in Europe and Asia. We continue to see new opportunities in these areas as well as South America and Africa.
Regarding strategies for the second half of this year and beyond, as you know, we have a unique status where we serve the dealership network as well as the independent aftermarket. This gives us a complete view across the repair/service industry. Independent shops, after more than a decade of ceding share to OEM garages, are regaining some of that lost ground. We intend to continue to serve the marketplace by bringing innovative repair/service tools and information content. Clever tools that provide the greatest productivity gains will continue to make a shop's and/or technician's priority list even in these tough economic times. We are also continuing investment in products and services to drive our growth in Asia, Europe and South America.
If the current economic situation continues, how do you see that affecting shops' spending on technology solutions?
In our experience shops and techs who invest in technology and innovative tools deliver reliable service, better quality of repair and improved customer satisfaction. Investment in productivity solutions is a key to shop profitability, and deferring a productivity investment has the risk of causing a shop to fall behind.
As OEM dealer service bay counts decline with the consolidation of dealership locations in North America, the need for technology and tools that allow the tech to more quickly determine the problem and then repair the issue correctly the first time has never been more important. Independent repair shops across the country are experiencing a bump in demand and we are seeing a split in our product mix. Essential productivity tools continue to do well, while discretionary higher price capital investments are being deferred. Another interesting strength in this market is the DIY market. As a greater proportion of the vehicles on the road are those greater than 10 years old, a portion of basic DIFM repair is shifting to DIY- A trend that appears to have some staying power in this economic environment.
Of course, techs can be more productive using the right tools, but what else can you suggest for greater productivity?
Training is always a great investment. This is definitely the case as vehicle systems and repairs get more complex. Techs cannot go wrong by upgrading their skills through effective training. Continuing education is just as important for a tech as it is for any other profession. Right now we're seeing early adopters of technology new to the Aftermarket repair arena. Wireless, Internet-based repair information, live repair assist databases and touch-screens are not new technology; they are just recent introductions to the repair environment.
Training can take many forms, including making use of information readily and freely available. We provide training clinics free of charge to technicians who adopt our diagnostics platforms like Genisys
When can techs expect to see OBDIII systems become more prevalent in the vehicles they service? What will they need to know and how can you help them?
OBDIII is still in early discussion stages and is likely years from commonplace presence in the repair environment. Some experts say the J2534 standards being developed by the OEMs today is the foundation for the new generation in on board computer scanning technology of tomorrow. It is likely that OBDIII will be an evolving phenomenon, and will feature incremental technologies added to on board systems, such as drive by wire and Flex-ray technologies.
Repair shops and techs using our technology solutions can feel confident that our position as providers of diagnostics and information content for OEMs across the globe places us in a unique position to work on bringing the latest technology solutions to the independent aftermarket.
In your view, what are the biggest obstacles that shops face this year – and what can they do to overcome them?
The uncertain economy and lagging consumer confidence may cause an increase in deferred vehicle maintenance. The business uncertainty caused by the current economic climate makes it difficult for repair facilities to make large capital investments in their business. With such uncertainty comes great opportunity, and it is the shops that invest today in productivity solutions that will be best positioned for success in the coming years. Miles driven trends and repair spend are already showing signs of stabilization, and the realignment of repair spend away from OEM facilities means that opportunity will be there for those that are prepared.
Legislation is being introduced on a variety of issues from bailouts for the automotive industry to Cash for Clunkers proposals. How do these legislative events affect the aftermarket, and how can shops remain productive in light of potential new regulations?
There is a healthy debate going on as it pertains to the proposed "Cash for Clunkers" bill. Contradictory opinions exist on how a Cash for Clunkers program may impact the independent aftermarket. On one hand, removal of potentially millions of older vehicles from the car parc would have a negative impact. But a boost to the automotive industry and general economy via new vehicle sales would boost consumer confidence and loosen consumer spending which could be positive. Shops that can address a wide variety of OE platforms quickly and easily could flourish in this environment.
A vast cross section of the independent aftermarket is comprised of entrepreneurs. The entrepreneur spirit in the United States has fueled our growth and has driven us to the position of global leadership. We expect that this entrepreneurial spirit will continue to fuel technicians and shops across the nation.
