If wholesale accounts seem a little slow lately, perhaps it’s because your independent dealer base is buying an increasing amount from dealership parts departments.
But just a minute, doesn’t that statement sound a little outrageous? After all, isn’t your master installer pricing cheaper than dealer pricing? Don’t you offer higher profit margins? Don’t you offer better service? And what about traditional aftermarket product support? Amazingly enough, these questions are becoming less relevant in today’s wholesale automotive parts market because OE support is becoming more essential to the survival of your local independent shop.
THE HIGH-TECH MARKET
Let’s face it: Selling replacement parts was much easier when the technology was relatively simple and straightforward. Carburetors and distributors were easy to understand. A dozen battery sizes would cover the market and, gee-whiz, the average vehicle owner had to buy a new set of spark plugs once every year!
But let’s fast-forward to the 2000 model year. OBDII engine controls have become exceedingly complex, so much so that only the very best technicians have a good understanding of how they operate. And, since the 2000 model year, shops are dealing with vehicle problems involving as many as eight on-board computers or modules networked together to form a bumper-to-bumper operating system. This operating system controls all operations from starting the engine in the morning to deploying the air bags and unlocking the doors in an emergency situation. These systems are very complex and application specific, so training and equipment requirements for diagnosing and repairing them have quickly risen to levels unheard of in years past.
Of course, there are no shortcuts in diagnosing and repairing modern vehicles. Any shop that proposes to service high-tech vehicles quickly discovers the equipment and training thresholds needed to perform some of the simplest tasks. When dealing with OE theft-deterrent systems, for example, a shop must have the OE diagnostic information and the OE capability of diagnosing the system electronics. In some cases, the theft-deterrent system honks the horn, flashes the lights and disables the starter when it detects a non-authorized ignition key being used or detects a door that is presumably opened without the door lock sensor authorizing such an action. Without OE information and tooling, an independent shop may find it impossible to diagnose and repair this type of vehicle failure.
In a nutshell, technology is driving independent shops closer to OE dealers.
In order to reduce equipment and training requirements, some independent shops are specializing in one or two nameplates. When this happens, that shop most often finds itself buying solely from dealership sources and using OE diagnostic equipment and service information. In other cases, many independent shops are now buying OE diagnostic scan tools and subscribing to OE websites to narrow the gap between their capabilities and that of the local dealerships. In either case, the local jobber is discovering that modern vehicle technology is quickly locking him out of the nameplate specialist or the high-end diagnostic service market.
REDUCED VEHICLE MAINTENANCE
Maintenance issues, such as the 100,000-mile tune up interval, have also reduced aftermarket sales to independent shops.
Thirty years ago, most vehicles needed an annual tune-up and at least four lube, filter and oil changes. Today, vehicles can be driven six years on a single set of spark plugs and on only two oil changes per year. Similarly, better engineered vehicles and better component quality has reduced the need for the traditional steering, suspension and ride control part replacements. Brakes seem to be the only component that need replacing on a traditional basis. The only offsetting factor is that vehicle population has grown as has the vehicle miles driven. But, even at that, the independent service market has become over-populated in many localities, with some shops operating at as little as fifty percent service capacity, at best.
In essence, the average modern vehicle can be driven at least 100,000 miles before it needs significant maintenance or repairs. When a modern vehicle does need aftermarket-supplied repairs, most of this service will consist of ignition, belt, fluid and cylinder head gasket replacement.
When vehicle mileage does exceed 100,000 miles, many of the body components like window regulators, door lock sensors and other hardware that begin to wear out is available only through a dealership parts department. In addition, little, if any, body control electronics components are available through aftermarket distribution. Here again, the independent repair shop must call the dealership for parts in order to perform the repair.
Increasingly, multiplexed electrical systems use electronic modules to operate accessories such as power window regulators, power door locks and wiper motors. Of course, the probability of a body control system failure increases as the miles add up. Here again, if a window regulator module fails, the new module must be reprogrammed to fit the vehicle before it can be operational. Currently, few independent shops have that capability. Without that capability, they must have the reflash done at the local dealership to complete the repair.
Today, thanks to the 100,000-mile tune-up, stainless steel exhausts and long-life fluids, the lag time has increased. The only profitable, big-ticket service on most modern vehicles with less than 100,000 miles on the odometer seems to be fluid flushes and brake or tire replacements. Of course, while some shops experience premature pattern failures on components like ball joint and tie rod ends, that appears to be the exception rather than the rule. In addition, car dealers are pushing extended warranties that tend to draw the vehicle owner closer to the dealership on such routine services as oil changes and fluid replacements. Another issue that is binding vehicle owners closer to dealerships is telematics, which is the ability of the vehicle itself to automatically communicate with an OE service network. The auto manufacturer’s commercials make it very plain that a vehicle owner will never need to worry about losing his keys because an operator several thousand miles away can command the body control or theft deterrent computer to unlock the doors. That ability, along with the ability to automatically remind the owner of needed services or warranty recalls, makes telematics one of those 800-pound gorillas lurking in the aftermarket closet!
THE INDEPENDENT’S VIEWPOINT
Obviously, an independent shop owner has a lot on his plate as far as competing with the local dealership. The driving factor in the automotive service market, however, is that some surveys indicate that most motorists like dealing with independent shops more than with dealerships. Quite clearly, "the buck stops here" attitude of the independent shop attracts paying customers.
On the other hand, most independents are becoming more reliant on dealerships and auto manufacturers for information, tooling, technical assistance and (above all) replacement parts. This is a fact of life that has been brought about by the rocket-science technology now being incorporated into the modern motor vehicle.
How can aftermarket parts distribution improve its competitive stance? Poor cataloging and knowledge of electronic parts is perhaps one of the major problems in selling and delivering a product to a wholesale customer. Too often, cataloging continues to be structured along the same lines as before the electronics revolution. To illustrate, the former category of "tune up" parts has, or should, become fuel system, secondary ignition and engine management system parts.
One of the major problems in aftermarket cataloging is the failure of some sectors of the aftermarket parts industry to acquaint itself with standard SAE J-1930 terminology. This SAE standard assigns a universal acronym or name to parts that perform essentially the same function in all vehicles. For example, a crankshaft position sensor has become a CKP, and intake temperature sensor an IAT, and so on.
Lastly, the issue of parts quality has to do with the shop owner’s relationships with their customers. Because modern vehicles have become more reliable, many independent shops have concentrated their efforts on selling long-term maintenance. For a shop to preserve its credibility with its customers, replacement parts must equal OE reliability and performance. Without this equivalent reliability and performance, the independent shop owner often feels compelled to sell OE, rather than aftermarket replacement parts.