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Article > Editor’s Note

2009: A Look Back at Distribution Influences, ‘The Clunkers’


1/13/2010
By Mark Phillips

At the beginning of each year, we review what were the top influences or events on automotive aftermarket parts distribution during the year that just ended. We gauge this by reviewing the most-read stories from our sister e-newsletter, aftermarketNews.com.
 
Mark Phillips
At the beginning of each year, we review what were the top influences or events on automotive aftermarket parts distribution during the year that just ended. We gauge this by reviewing the most-read stories from our sister
e-newsletter, aftermarketNews.com.

In 2009, the Cash for Clunkers program got plenty of headlines and had effects on the automotive
aftermarket, both directly and indirectly.

With the swoop of some pens on legislation, many, many test drives and the destruction of the used vehicles, 677,017 new vehicles were sold. The result? The final prices of some vehicles actually edged up and people who might have purchased a new vehicle in the future just bought the vehicles earlier than they would have.

And, according to an R. L. Polk & Co. survey, the program actually hurt owner loyalty. The point of the program was to get Americans buying cars again, but American car companies took a hit. Chrysler and General Motors suffered 13 and  7 percent declines, respectively, in corporate loyalty from July to August, according to R. L. Polk & Co. Ford suffered less so, at about 6 percent.

The effect on the independent repair and parts aftermarket was that hundreds of thousands of vehicles — all of which had to be in working order according to “Clunkers” rules — were taken off the road and destroyed. Whatever pent-up work that needed to be done went with them. In the end, about $3 billion was spent on the program, with its value in doubt.

A bit of right-sizing occurred in 2009, in various forms. The Bosch Group foundation brakes business in North America, which includes brake calipers, disc brakes and drum brakes, was sold to Tokyo-based Akebono Brake Industry.
The sale didn’t include brake activities in the field of brake boosters and commercial vehicles, nor does it affect the ESP and ABS business of the Chassis Systems Control division or the aftermarket business with friction and brake components, Counterman’s sister publications aftermarketNews.com reported.

Then-new GM CEO Fritz Henderson, who has been replaced after a mere nine months at the helm of the company, took ACDelco, the company’s parts and service division, off the market in April.

GM talked to several potential buyers, the company said, but nothing came to fruition. In August, a new aftermarket company emerged, Vista-Pro Automotive, which was the blending of select assets of Visteon Corp. and Proliance International. Vista-Pro’s product offering includes Proliance’s Ready-Rad radiators, Ready-Aire condensers and Ready-Aire heater cores.

At year’s end, both Chrysler and GM were still hearing appeals from new car dealerships that were shuttered by the companies. The manufacturers made the argument that shutting down the dealerships would help put them back on the road to profitability.

As expected, the franchise owners hated the idea. Some dealerships, which had been family owned for 50 years, were suddenly gone. Many are appealing to the companies to be reinstated.

In theory, the nearly 2,000 dealerships that were shut down would be a boon to the aftermarket. More independent repair shops should get more work because dealership repair bays would shut down. In some Long Island communities in New York, for example, customers would have to drive a fairly long distance to even find a dealership. So far, there’s only been anecdotal evidence regarding the fallout of the dealerships and the effect on aftermarket. Still, any reduction in service from the dealerships will eventually lead to more business for the aftermarket.

In 2009, several companies with sales overseas sought to bring their products to the North American market. Fras-Le, long a big player in the South American friction market, headed north. Standard Motor Products (SMP) brought its popular import brand of quality engine management parts, Intermotor, to the U.S.

Uni-Select’s purchase of Beck/Arnley was interesting enough news in 2008 and certainly made in impact in 2009 and will continue to in the future.

Uni-Select bought Beck/Arnley Worldparts Corp. and its Canadian subsidiary Beck/Arnley Worldparts Canada ULC. It set the stage for Uni-Select’s new Foreign Nameplate Division.

Everyone talks about e-cats, why not Free-Cat?

In early 2009, a new not-for-profit called Free-Cat emerged. Free-Cat was established by a group of 26
automotive parts manufacturers — including CARDONE, Affinia, Raybestos, Wix, Federal Mogul, Gates, Dayco, Tenneco, Bosch and Standard Motor Products – with the goal to quickly get catalog info to the repair community. The site, free-cat.com, is currently open to the public without any registration.

In 2009, aftermarket parts stores hired in several people who held leadership roles in retail companies such as Best Buy.
It was a sign that some companies are placing an even greater emphasis on online parts sales, as some of those executives filled similar roles outside the aftermarket.

Some aftermarket companies filed lawsuits in 2009 over issues such as false advertising, antitrust and trade dress infringement.

Affinia Group filed a petition requesting the National Highway Traffic Safety Administration (NHTSA) consider a first-ever Federal Motor Vehicle Safety Standard for brake rotors.

Affinia’s proposal rule would require rotors to be stamped with identifying markings, including a “DOT” (U.S. Department of Transportation) symbol representing the manufacturer’s certification that the part meets the new standard.

Aftermarket Auto Parts Alliance Inc. (The Alliance) CEO and president Richard “Dick” Morgan, retired after an illustrious career. At the Alliance’s annual winter shareholder meeting  in December in Boca Raton, Fla., friends and colleagues thanked Morgan through a series of pre-recorded video messages and in-person tributes. “It’s been a long road getting here – more than 50 years – and it’s been a great ride. I look forward to this next step but I won’t be too far from the
aftermarket – I guess it’s just in my blood,” Morgan said to those in attendance.

John Washbish, who was executive vice president and who took over the reins of president from Dick on Jan. 1, said of the tributes: “This was a group effort from everyone who has known and worked with Dick over the years. We had to find a way to express our well-wishes for him but also to thank him for his many contributions. I believe we accomplished that this evening.”
  Previous Comments
avatar   howardg   star   2/24/2010   3:54 PM

What did cash for clunkers get us? Cash for clunkers got the american public deeper in debt. I could not take 8000 dollars for my 92 Cheverolet s-10 extra cab 4x4. 8000 dollars would not replace the truck. It's a good down payment for new truck. But only a down payment. So lets say I take the cash for clunker and get new colorado with the same options as my old ride which has yet to click 100,000 mile mark. I get a new truck and a 400 dollar a month payment. My old truck get parted out which takes away from our industry. Now I'm in debt all over again. What good could come from that? Nothing Most of the vehicles that qualified were imports. Thats just great take our unemployment rate and give somebody money to buy imported goods thats a great idea. Just what the O'bama ordered more jobs for our freinds over seas.



avatar   Ed   star   2/18/2010   7:13 PM

Brad, blaming the economy or government programs is a cop out, a cover up for other, more embarassing reasons. Ok so there are more brand new cars with warranties covering major repair, on the road today, what about brakes (Something not covered under warranty) or oil changes. Sure some dealers offer free oil changes with vehicle purchase or discount coupons, but who wants "mystery oil that is dispensed from the ceiling" in their vehicle? Not me. What about accessories? Ventshades, Bugflectors, LeBras, programmers, stereos, speakers? Point is, if you have a shop whose sole focus is just repair and is blaming the government for all of his lack of business, he doesn't need to be in business to begin with.



avatar   Brad H.    star   2/17/2010   6:35 PM

While the pros of the cash for clunkers program seem far less evident than that of the cons, I suppose that it did do one important thing, it got some hard working people into a more economical and reliable vehicle. But that's about the only positive thing it did in my opinion. I can't hardly express, just how many of my installers are now experincing decline in profit now, because their customers are bound by a warranty that demands a dealership do any and all repairs. CFC has taken food off the tables of several hard working families tables, and I fear that it will continue to do so for some time.



avatar   DAVE ELLIOTT   star   2/15/2010   12:28 PM

Cash for Clunkers did get us something..... 85% of the cars with Obama 08 stickers off the road. thanks Charlie.



avatar   Gabe   star   2/14/2010   3:42 PM

Cash for clunkers gave some of us, something to bitch about. Although I am sure it did help some people. Maybe!?



avatar   Kim   star   2/10/2010   12:37 PM

So what DID Cash for Clunkers get us? Anything besides full scrapyards? That's all I really hear about.



avatar   Nate Lewis   star   2/8/2010   11:03 AM

I'm with Ed on this one: If I had a cool 45 grand burning a hole in my pocket, I would take the Elise long before the Tesla. 0-60 in 4.4? 20 mpg city with a reliable Toyota motor? Track ready from the factory? Yes please....



avatar   Chris   star   2/5/2010   9:51 PM

Would that I had $45k to burn. I would have the sickest Chevy on my block. :D



avatar   Gabe   star   2/5/2010   4:26 PM

If I had $45,000 to spend on a car it still wouldn't have been the Tesla. I'm thinking for $45,000 I could have a nice 94-98 Supra, maybe a CRX with K-series or even a real nice '55 Chev Belair. I mean the Tesla was a sports car so it's not like we are comparing it to your everyday commuter car here. Hell I could have a nice '64 Chev pickup, a rat rod, and an old geo metro with good gas mileage for that much.



avatar   Ed   star   2/4/2010   3:37 PM

I believe the Tesla Roadster qualified for a government credit/rebate and the price given was without the rebate/credit. I know the Model S qualifies for said credit, as every publication I have read on it quoted it at $45,000 after government credit. The problem is the pricing, you could buy a Tesla Roadster or you could buy a Lotus Elise with every option package and still come out about $10,000 cheaper. The only thing the Elise cannot offer is Tesla's Spatial Sound Generator, which simulates the sound of exhaust (A $400 option IIRC).



avatar   CRYSTAL   star   2/4/2010   2:09 PM

What i meant to say is "New Cars" not just chevys..they just dont make them now like they used to.



avatar   CRYSTAL   star   2/4/2010   1:55 PM

Hmm didnt know that about my Ford Ranger i work in every day. I thought the clunkers thing was stupid. Good cars gone to waste. Now these ppl have a car payment for more years than the car will probably last. My water pump went out 5 yrs ago on my 91 Nissan got so hot melted my coolant jug..still going. like to see a chevy do that without busting the block.



avatar   Dave Elliott   star   2/3/2010   1:48 PM

I remember Tesla too! They rock!.......what? Not that Tesla? Never mind



avatar   Chris   star   2/2/2010   4:29 PM

Yes, yes, I do remember the Tesla electric car. I remember when it first came out, and they showed it on Motorweek. My first thought was, "That might be kinda neat to have." Then they showed the base price, and my next thought was, "No, no it wouldn't."



avatar   Chris   star   2/2/2010   4:29 PM

Yes, yes, I do remember the Tesla electric car. I remember when it first came out, and they showed it on Motorweek. My first thought was, "That might be kinda neat to have." Then they showed the base price, and my next thought was, "No, no it wouldn't."



avatar   Gabe   star   2/1/2010   1:30 PM

Tesla wasn't going anywhere anyway. If I remember right their car price wasn't within the means of the average person. Besides it was fast, but if you had the money for it you'd spend it on something better.



avatar   Ed   star   1/31/2010   6:13 PM

Add another clunker to the list, Tesla Motors, announced recently they were ceasing production on their highway-capable full electric Tesla Roadster, which was based off of the Lotus Elise. They cite tooling changes at their "supplier's" plant. They go forward into 2010 and 2011 with no vehicles to sell, only focused on the R&D of their next vehicle, the Model S, a fully electric sedan, by model year 2012. With no income and backers falling away, expect Tesla to fold by the end of this year.



avatar   Tyler   star   1/31/2010   5:11 PM

I thought it was funny the other day when I heard about the 4 toyota plants in the US that had to shut down for the recall. I wondered to myself are there even 4 GM plants left in the US?



avatar   Gabe   star   1/31/2010   4:03 PM

Speaking of the Fit it reminded me of something. My fiancee wants a Fit. So we were looking at them at the dealership just to see what they go for. I noticed that the percent of american parts in the fit was something like 90% So I was at work the other day we found the window sticker for our delivery truck in the glove box. It is a new Ford Ranger it's american parts content was 64% I thought it was funny, because working in parts every now and then you get people saying that, "Jap crap!" I wonder what they'd have to say about this.



avatar   Ed   star   1/31/2010   2:21 PM

Yes, sad to say, cars are getting worse in build quality, but lets face the facts on who is the culprit there. Toyota stops production on 8 models and issues the largest recall in it's history. Honda Fit's power window switch starts fires and the new Civic's rear windows fall out at highway speeds. A lot of this is design issues, not shoddy assembly line work, but that is where the root of the problem stems from. Nearly every major auto manufacturer has at least one plant within the US. At least one plant staffed with American labor, with American UNION labor. The huge drain from the UAW forces them to make cuts elsewhere, which effects build quality. In the late 80s and early 90s, unions were scared, because Reagan had dismantled the air traffic controllers' union and fired them all after a strike.



avatar   Chris   star   1/30/2010   3:38 PM

Cash for Clunkers is a good program, but only to a point. Many vehicles have not really improved on their older models in anything other than a superficial manner. Having owned both a 2003 and a 1994 Silverado, I can attest to the fact. The 2003 is supposed to make more horsepower, get better gas mileage, and cost less to maintain. In fact, the opposite is true. I guarantee the 1994 could not only outrun the 2003, but even with TBI, I get 18 mpg city with proper upkeep. And if the engine ever blows, I can rebuild it for under $1k. Try doing that on a 5.3.



avatar   Ronnie   star   1/28/2010   3:45 PM

Why did this take a turn about how bad your companys that you work for are? Simply put, make the ceo's take our paychecks home for a week, then we'll see how much they may pay attention to how well there doing in there job so they might get a promotion and can afford there rent on there studio apartment. Also take away there top notch insurance, there company cars and expense accounts, and any other perk that they don't deserve. I could care less if they have a masters degree. Most of them are in bullcrap anyways.



avatar   Gabe   star   1/25/2010   5:41 PM

Cash for clunkers was probably good for some people who really had a turd of a car and make more money than I do. But at my home I have a '96 Corolla (which I call my turdota, sorry toyota not a fan! Unless it's a 94-98 Supra) 1991 Civic DX, 1994 Acura Integra, and my fiancee has an 01 Galant (she didn't know any better) I wouldn't have traded any 3 of my cars in for a new one. They are all paid for, hell the integra was free! (just needed a timing belt) They have all been maintianed by me, and they are all very reliable. They were all very simple too, without all kinds of fancy doo dads, and gadgets. I'm beginning to think that some of these cars from the 90's were better made than some of the stuff rolling off the assembly line now.



avatar   Jeremy Spurlin   star   1/25/2010   12:28 PM

and no i am not not mad at yall Dave you know i still love you



avatar   dave elliott   star   1/25/2010   12:22 PM

Good to hear from you Jeremy, you never call or come by any more. You mad at us?



avatar   Jeremy Spurlin   star   1/24/2010   11:57 AM

It just show that our government tries to save a dime by spending a dollar, and like what Ed said it also saw the death of many a rare car just to get a car that has less emission and better gas mileage



avatar   Ed   star   1/19/2010   10:27 AM

And just as I posted the previous comment, Chrysler unveiled the Chrysler Lancia, not exactly its official name, but as it's name describes it is a Lancia in Chrysler badges and the 500 and Panda have also been confirmed.



avatar   Ed   star   1/18/2010   7:15 AM

Still unconfirmed as the Fiat acquisition of Chrysler is still fairly fresh. They are segmenting Ram into it's own brand and their contract with Daimler-Benz to supply the Dodge Sprinter van is up, so they are looking to Fiat to supply a replacement for that as well as a line of fuel effecient vehicles. Times are changing, GMC is releasing the Granite, a compact car, the Tata Nano (The world's cheapest car) is coming to the US, so do not be surprised to see a Fiat 500 or Panda in Chrysler clothing, as well as some Renaults in Nissan badges.



avatar   Chris   star   1/17/2010   1:05 PM

They should definitely have saved AMC. While rather ungainly in some cases, the corporation introduced technology that was decades ahead of its time. It's no stretch to imagine that if they were still in business today, automotive technology would be greatly superior and harder to break than it is now.



avatar   Ed   star   1/14/2010   12:24 PM

No one saw fit to save AMC, and DMC, the government tried to sell cocaine to John Z DeLorean to get DMC to fall apart. We've bailed out Chrysler, TWICE, let's not forget the plea Lee Iacoca made before congress back in the 80s. However, I am happy with the future of Chrysler and cannot wait to buy a Fiat 500 Abarth SS stateside.



avatar   Jody   star   1/14/2010   9:50 AM

It's just another example of our government over spending. Washington tries to solve one issue by creating other problems. In the end, I can't see the benefits of Cash for Clunckers....what happens if car sales fall this year or the next....who comes to the rescue then. Our business, hasn't seemed to fall very much, in fact we've seen some increase, especially on the commercial side. I'm hoping the trend continues and we'll continue to see yearly increases.



avatar   Ed   star   1/13/2010   3:02 PM

The biggest issue with Cash for Clunkers was there was no clear definition of the rules until the program was over. A dealership in Kansas accepted a 1950s Dodge Business coupe under the program, but when the dust settled, it really didn't qualify, because the CfC program stated the oldest year acceptable was 1980. The "death toll" list the program released around October was just depressing. Among the noteable dead, an ASC GNX, a Maserati Bi-Turbo, a rare imported Mitsubishi EVO VII, a Volvo S80 T6 and there was also one Ferrari.















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