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Auto parts distributors must know vehicle in operation trends to succeed, Witkamp tells APA conference

Tuesday, March 13, 2018 - 06:00
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Auto parts distributors need to make sure that their parts inventory matches the vehicles in operation (VIO) trends and their part failure rate trends if they want their business to succeed.

That was one of the messages delivered by keynote speaker Peter Witkamp, CEO of consulting business Aftermarket Dynamics, at the Automotive Parts Associates annual shareholders’ conference March 9 in Orlando, Fla. He shared research on the automotive aftermarket and where it is headed in the near future.

“Through 2020, we will see a 9.2 increase in VIO in U.S, which is good news for our business,” said Witkamp, who worked for Federal-Mogul for 36 years before leaving to start his own consultancy.

But not all automaker brands will enjoy a sales increase. He said that the sale of domestic cars in the U.S. will decrease 7.9 percent through 2015, while the sale of import cars will increase 4.3 percent. In 2020, VIO in the U.S. will be approximately 60 percent foreign and 40 percent domestic.

“In 2010, it was close to 40 percent foreign and 60 percent domestic, so you can see the trend,” he said. “I’m not knocking foreign vehicles, but your parts inventory must match the VIO trends if you want to be able to maximize inventory and sales.” The sale of domestic cars in the U.S. are down 8.5 percent in the last 10 years, while the sale of Japanese, Korean and European imports are all up.

Distributors should note that the average age of VIO will continue to increase. By 2019, VIO that are 12 years and older will increase by 15 percent from 2011, said Witkamp, who worked for his family’s heavy-duty distributorship business before joining Federal-Mogul.

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Technology trends

Technology transformation, including new mobility concepts, digital technologies and automated driving, are having a huge effect on the aftermarket because consumers want more efficiency and connectivity in their vehicles.

Witkamp illustrated the technology boom by sharing a picture of a rotary phone and a cell phone, likening the cars of yesteryear to rotary phones and today’s vehicles to smart cell phones.

“There are about 60 sensors in the average car today, but there will be 200-plus sensors in cars by 2025,” he said. Many of these additional sensors will be found in systems such as evasive steering assist, lane keeping, intersection assist, early pole crash detection, electronic pedestrian protection, evasive steering support, highway assist, artificial intelligence programing and parking with apps.

The aftermarket should be concerned that by 2020, 90 percent of cars will be connected to original equipment dealers to extend the service window. But he said that consumers will demand that requirements of controls go to vehicle owners rather than OE dealers.

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