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The Industry's Backbone


6/1/2004
By Jon S. Owens

A healthy supplier base is essential to the survival of both the OEs and the aftermarket.
 

As you ripped open the plastic around this month's issue of Counterman, you also found a special edition of Focus, which commemorates a century of service from the Motor and Equipment Manufacturer's Association. Take some time to read through this very special publication. In it, you'll find a very thorough history of the automotive parts manufacturing industry. It's a good read.

While Ford, GM and Chrysler dominated the automotive landscape during the last century, some intriguing developments took place among the parts companies that supplied them. One need only refer to the industry timeline that starts on page 28 of Focus. Read through it and you'll see that the car companies were very good at building cars, but perhaps less inclined to service them properly. Thus, through necessity, the aftermarket was born.

Through the aftermarket, parts manufacturers had another market to serve, much to their delight. The automotive aftermarket quickly earned a reputation as a more profitable venture (though lower volume) than the automotive manufacturing market. This theme has held true (for the most part) through today, but what lies ahead may turn this market dynamic on its head.

Competition, in the form of highly efficient and durable off-shore products, has driven North American car manufacturers to become exponentially better at what they do. This, in turn, has driven parts manufacturers to the same high levels of performance. As a result, the job of servicing these vehicles has morphed into a data-driven task of analysis, rather than a simple 3,000 mile "check-up." Soon, all vehicles will communicate the need for service to their owners, rather than waiting for the owner to decide.

Parts manufacturers should be credited for driving ingenuity, efficiency, performance and productivity at least as much (if not more) than the car manufacturers themselves. In their quest for more OE business, parts manufacturers have dedicated countless resources to product and process R&D, let alone ill-advised pricing and a few steak dinners. In short, parts manufacturers are truly the "backbone" of both the automotive OE business and the automotive service business. Without a consistent source of quality products, neither the OE assembler nor the aftermarket service provider has a chance to survive.

Take some time this month to reflect on the history of parts manufacturers. Acknowledge their contributions, but also ponder their uneasy futures. Pricing pressures dominate their landscape today. The OEs beat them down on price, and now the aftermarket plays that game too. Add to that the enormous rise in raw material costs, and it's not a pretty picture. Whether you're in the automotive service industry or the automotive OE assembly business, you're not going to have much success without a healthy supply base. I've seen both OE and aftermarket entities lean on parts manufacturers in an effort to overcome their own inefficiencies and drive down cost.

As the future of the industry unfolds, many things are unclear. But, one thing is for certain: Without a strong "backbone" in the form of a consistent and quality base of supply, no one wins.















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