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

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

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.

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.”

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