AMN Executive Interview With Behzad Rassuli Vice President, Market Intelligence Auto Care Association - aftermarketNews

AMN Executive Interview With Behzad Rassuli Vice President, Market Intelligence Auto Care Association

Today in our AMN Executive Interview series, we sit down with Behzad Rassuli, vice president, market intelligence for the Auto Care Association, to discuss the latest industry research released in the 2016 Auto Care Association Factbook, as well as the results of the association’s first-ever State of the Industry Form and Report.

Editor’s Note: In last Friday’s edition of AMN Weekly, previewing this interview, Behzad Rassuli’s first name was misspelled. We regret the error.

Behzad - ImageToday in our AMN Executive Interview series, we sit down with Behzad Rassuli, vice president, market intelligence for the Auto Care Association, to discuss the latest industry research released in the 2016 Auto Care Association Factbook, as well as the results of the association’s first-ever State of the Industry Forum and Report. 

AMN: The Auto Care Association just released the 2016 Factbook. How long has this product been produced and how has it changed over the years as industry and member needs have changed?

BR: 2015 marks 25 years of the Factbook. Before publishing this 25th anniversary edition, we dug through our archives to see just how far we, and the industry, have come. We found the Factbook from 1991, the very first one published, was a print-only publication weighing in at 13 pages. By contrast, this year’s Factbook was 116 pages, completely digital, covering all vehicles on the road including those outside the borders of the U.S. The evolution of the publication is a direct reflection of our ever-evolving industry. Vehicles, parts, service equipment, retail – all have been completely transformed over the past 25 years by technology, and we may still be in the nascent stages of the impact of technology on this industry.

It’s not just the digital boundaries where we are seeing change, but the physical as well. The auto care industry is more global today than ever before. These types of changes have driven the growth of the Factbook, as we constantly strive to stay ahead of the needs of the industry, and provide actionable research to businesses to help them plan for the future.

AMN: In this year’s Factbook, it is stated that many workers in the auto care industry are older and retiring, and there aren’t many younger workers to replace them. What are the most notable initiatives to recruit “fresh faces” into the industry?

BR: I think one of the main initiatives to address the need for new, young talent in our industry, is being managed right here at the Auto Care Association. Earlier this year, the association announced its new Job and Career Development program. Within this program are several initiatives that aim to recruit and retain young people in our industry. We also launched our careers website, autocarecareers.org, an educational website designed to teach people about the wide variety of career options in auto care. Later this year, we will launch additional content on that website including an industry-wide job board and an initiative to hire our nation’s veterans called Operation Auto Care. As we map our strategy to broadcast this information to the job seekers, we do so with a particular eye toward the millennial audience. Millennials aged into the working world in the midst of one of the worst recessions in U.S. history, and their unemployment rates are among the highest in the economy, only further compounded by record student debt. We see the convergence of increases in vehicle technology, and the need for employment by this incredibly tech-savvy group making the auto care industry a perfect fit.

We are in the midst of creating an extensive marketing plan to help position the industry in terms of the value it offers to Americans (mobility, independence and consumer choice) and frame their larger contributions to society, which millennials crave. The Young Auto Care Network Group, or YANG, also falls within this program. YANG allows young industry professionals in their twenties and thirties the opportunity to network with industry peers, enhance industry knowledge, as well as partake in a variety of professional development opportunities including webinars, in-person education sessions and scholarships. YANG will soon be launching a mentorship program.

AMN: The 2016 Factbook states that 40 percent of surveyed consumers feel that self-driving vehicles are still a distant reality – upward of 20 years out. Another third believe that they won’t ever become a reality. In your opinion, what will the future bring for this new vehicle segment?

Consumers are right to be skeptical as even the experts are torn on how and when autonomous driving will come to fruition as a commonplace mode of transportation. Two things the experts do agree on, however, is that the question of “if” is nearly a unanimous “yes.” But they also agree to the caveat that vehicle autonomy will evolve in phases. True NHTSA Level 4 autonomy, where the driver is not expected to be present to control the vehicle and the vehicle on its own will monitor and react to physical and environmental roadway conditions, is quite far off in the future – maybe five, maybe 20 years out. There are still many technical barriers to break down and resolve, including real-time map processing and updating, sensor fusion, V2X communication and data communication standards. We are seeing several technologies roll out in vehicles currently or soon to be sold that are part of that autonomous phase-in. Level 2 and Level 3 technologies, such as adaptive cruise and limited self-driving with driver check-in, have a long way to perfection before vehicles drive on their own.

AMN: In your fourth annual Key Issues Impact Survey, you identified the three biggest “movers” in terms of importance to auto repair shops. They were all related to telematics. What does this say about our industry?

Telematics presents a great opportunity for our industry – enabling consumers to digitally engage with their preferred service location to diagnose and schedule a repair in real time. Beyond enhancing customer service and the shop/owner relationship, there is a real opportunity for the industry to unlock the estimated $60 billion of unperformed or underperformed maintenance on the 260 million vehicles on U.S. roadways.

That opportunity, however, lies behind legal and legislative barriers that will allow the owner of a vehicle to dictate where and how their telematics diagnostic information is communicated. As it stands, vehicle manufacturers view themselves as the “curators” of this data, singularly receiving and distributing a vehicle owners’ data to their own dealer service bays. First, this closed network proposition is mathematically impossible. The more than 17,000 dealership service facilities already have their hands full with recalls and regular maintenance of the nearly 17 million vehicles entering the market annually. The independent market exists to be able to meet the demand of the total population of vehicles of 260 million. Second, consumers want choice and ownership of their data. This comes through loud and clear in any study, survey, or conference involving telematics data. The industry is right to identify telematics as an area of major importance. Through those market forces above, the Auto Care Association’s efforts on Capitol Hill, and the help of our allies on the telematics taskforce, we believe the telematics opportunity for the auto care industry, and consumers, will be realized.

AMN: With new car sales increasing again, is the aftermarket “sweet spot” going to go away soon?

On the contrary, we actually anticipate the sweet spot to shift and potentially grow to include older vehicles on the road. Vehicles these days and over the past decade are built better and last longer than the older vehicles that formed the traditional sweet spot today. Coming out of the recession, we are clearly seeing new car sales return dramatically, which we anticipate will reduce the number of vehicles in the traditional sweet spot (six to 11 years) in the near-term. At the same time, we are seeing vehicles in the 12-plus-year-old group grow at 15 percent. Long term, this is great news for our industry. The new vehicles being sold today will likely stay on the road longer, shifting or expanding that sweet spot beyond 11 years.

AMN: Tell us about the first-ever State of the Auto Care Industry Forum, which took place in April, and the subsequent State of the Industry Report. How did this event differ from other major speaker events going on in the industry? What were some of the key takeaways?

BR: The State of the Auto Care Industry Forum that we hosted at the U.S. Chamber of Commerce in Washington, D.C., and the State of the Industry Report, were both firsts for the association, and different from anything we have ever done. It was a year ago that we rebranded from AAIA to the Auto Care Association, which we did to increase awareness of our industry and visibility of our association, particularly to audiences on The Hill and in the media. The State of the Auto Care Industry Forum was, in a way, our “coming out party.” The day before the Forum at the Chamber was spent on the Hill presenting our report to regulators and legislators, and discussing key issues such as telematics. The 100 guests in attendance at the Forum included other industry executives, association executives, policymakers, media and members of the investment community. To help share our story via our State of the Auto Care Industry Report, we were joined on stage by executives from Google, IHS, UPS and AAA, with a keynote address by Assistant Secretary of Commerce Marcus Jadotte. The Auto Care Association has long been known to provide robust information about the industry, for the businesses in our industry, through our factbook and topical research studies.

The State of the Auto Care Industry report was created to share our industry’s scale, size and economic importance to all of the people outside of our industry. Our goal was to present individuals with all of the components that combine to make up our industry, and connect them to our industry in the context of their daily lives and behavior as consumers.

IHS helped us share that the vehicle population around the world is growing, and that the U.S. auto care industry is becoming more borderless every day. Google highlighted that increasingly, consumers’ first interaction with the auto care industry is via their mobile device. UPS connected their business directly with the auto care industry, not just as a major logistics operator and parts distributor, but as dependent on our industry to keep one of the largest fleets on earth in operation. And, AAA shared information on the proliferation and importance of telematics to the motoring public and the auto care industry. The event was a major success, and the feedback has been overwhelmingly positive. On one hand, we feel like “mission accomplished.” The culmination of the rebranding couldn’t have gone better. But on the other hand, we feel like we’re just getting started, because we are.

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