APA - A Diversity Of Business Models

APA – A Diversity Of Business Models

An interview with Gary N. Martin, president and CEO, Automotive Parts Associates.

The Automotive Aftermarket Industry Association recently rebranded itself the Auto Care Association, favoring the phrase “auto care” over “aftermarket.” Will you and your group adopt this new language? What are your thoughts on moving away from the term “aftermarket?”
The actual answer remains to be seen, and that’s primarily because of how the our marketplace reacts to changes more than anything else. While I understand the reasoning and thought process behind the change, our industry is slow to adopt changes of this kind.

The effort and process of “rebranding” will take time. It will be easier to effect this change in the halls of Congress, because they do not have the institutional memory around the term “aftermarket.” So it comes down to managing the concept of internal and external marketing of this rebranding within our own industry walls. I do not see a ground swell of activity going on inside the aftermarket to abandon the historic terminology, but Automotive Parts Associates (APA Group) will support the initiative as we see the need and momentum growing.

The aftermarket truly has become a globally reaching industry. How much of your group will be represented by stores or warehouses outside the United States?
Approximately 10 percent of APA’s business is represented by interests outside of the United States.

How can eCommerce be used as a strategic benefit to program groups?
eCommerce is a clear strategic advantage to those groups and entities that make it part of their business environment. It is no secret that eCommerce transactions are here to stay and are growing by leaps and bounds. The barriers to entry for eCommerce trade are miniscule, thus making this method of transacting business relatively easy regardless of entity size. There are multiple benefits for users on both sides of the spectrum in the eCommerce transaction when considering the customer and the merchant. Business transactions are no longer bound by the traditional geographic constraints we have been used to dealing with. It is much simpler to broaden the scope of goods and services offered by this medium than the traditional method. Transaction costs go down when a well-constructed site and business plan are engaged in because of the automation of the process from beginning to end.

What particular attributes about your group give you a leg up over the competition?
The diversity of business models within APA is a clear differentiator for our group. We have large mega-distributors that participate in the traditional three- and two-step market, and then we have the specialty market players that cater to the surging import specialty parts marketplace. The overall market place continues to constrict at all channels, and being overly invested or involved in one discipline or market strategy puts anyone at a disadvantage today. APA is well-known for its appeal to all markets and business models and we are not fearful of engaging all segments of the market by welcoming those various business models into our fold.

How does your group get the right mix of parts on the shelf?
APA has one of the best, if not the best, business intelligence systems in the market today. Our membership is increasingly taking advantage of the tools we have made available to the membership through this system to understand what parts are being sold out the door and hung on the car in real time. This information, which is just a portion of what’s available to members, provides the tools to make clear decisions about what to stock across all product lines. At the end of the day, we all must know what to put on the shelves and when to do that. Data Solutions is our business intelligence tool and it simply works for our membership by providing a clear advantage over competition.

Do program groups look different today than they did, say 10 years ago? If so, how? How will they look in 10 years?

Groups absolutely look different today than in previous years. The advent of evolving information technology streams places all groups in the realm of a heightened competitive environment. The challenge of integrating these technologies into the business places of group members or shareholders, traditionally called “independents,” is at the forefront of what drives the growth and effectiveness of groups. This will continue to evolve at a rapid pace and there will be little time or space for those who do not keep up with that pace. Consolidation within the ranks of group entities will likely continue to some degree, but without a doubt, the driver behind success will be those groups that adopt the technology that provides the cutting-edge business intelligence for group members to stay ahead of the competition.

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