The long-term development of the aftermarket in China is viewed as a huge opportunity. The key now is the development of a sustainable profitable business model to service this opportunity, and parts manufacturers are the key to this development.
The problem for aftermarket players is that original equipment manufacturers increasingly use firmware and software to control the function and operation of a wide range of motor vehicle parts. OEMs have replaced what were once purely electro-mechanical parts with microprocessors and software controls embedded in ECUs.
If this were a game of Monopoly, Icahn seems to be focusing on Boardwalk and Park Place, accompanied by lots of hotels. The rest of us seem to be stuck with Baltic Avenue and rely on Chance as our primary business strategy, mortgaging every property we have to stay afloat in case we “roll the dice” incorrectly.
If the manufacturer of the product and the distributor/retailer don’t have their product data and inventory files in perfect sync, the business systems consuming that data fuel can misfire and make some costly mistakes.
Auto parts manufacturers and resellers struggle to handle returns efficiently and accept it as a cost of doing business. They need to invest in a system to handle returns or hire an outside expert, such as a third-party logistics company.
While strong 2015 vehicle sales is good news for the industry and bodes well for the aftermarket’s future, the automotive aftermarket is still feeling the aftershock of the recession. More specifically, the hangover from the recession is still being felt rather acutely by the aftermarket sweet spot.
It’s important to note that automotive online returns have become more common in aftermarket ecommerce. According to a 2015 UPS study, 39 percent of auto parts shoppers return items compared to 27 percent in the 2014 study. Nevertheless, returns represent fertile ground for any retailer looking to build loyalty and drive revenue.
Category management is a complex marketing mechanism that should be focused on customer needs. Run as a collaborative system between automotive retailers and suppliers, category management will benefit both parties greatly, although it should be driven by the retailers.
The automotive aftermarket has to come to terms with two disruptive channel trends: suppliers shipping directly to repair shops and same-day delivery. The upside is that these trends can help repair shops service their customers faster, but distributors, in particular, will have to adapt to these evolutionary changes.
5S, a workplace organization method used to promote efficiency and effectiveness, needs to be included in any improvements to your business. Realistically, it should be the platform that all your improvements are based on.
Younger generations aren’t as interested in cars as previous generations, mostly because of the cost of ownership. The Connected Car, equipped with technologies that keep drivers connected, might be the best thing to help spark newfound interest in cars.
Aftermarket Business World columnist Larry Silvey offers advice to auto repair shop owners on how to effectively market their shop in his column, “Six critical auto shop marketing strategies.” The six key strategies are:
More than 20 years ago, the campaign for auto parts manufacturing and outsourcing in low cost countries began. Many manufacturers have benefitted from lower manufacturing costs but have had to develop feasible logistics to sustain their success. With manufacturers opening the global gate, auto parts resellers also saw an opportunity and began direct importing.
There are various reasons for development of alternative fuel vehicles, including environmental concerns, fuel efficiency standards and the leadership role of the automakers. The continued development of these vehicles hinges on further consumer acceptance and government legislation.
The intellectual property belongs to automakers but consumers have a right to decide where they get their vehicles serviced, which traditionally has been independent repair shops after the new vehicle warranty period ends.
Aftermarket Business World Columnist Larry Silvey discusses omni-channel markeitng as it applies to the automotive aftermarket in his column "Omni-channel marketing is the new normal." Here are a few of his key takeaways.