Greg Gyllstrom, Vice President and General Manager of Visteon’s North American Aftermarket Operations
Posted: Feb. 20, 2006, 9 a.m., EST
VAN BUREN TOWNSHIP, MI — As vice president and general manager of Visteon’s North American aftermarket operations, Gregory Gyllstrom is responsible for expanding the organization’s aftermarket business by coordinating and directing the company’s sales, product development and marketing activities.
Before joining Visteon in 2002, Gyllstrom worked at Freudenberg-NOK where he was chief executive officer of Corteco, the company’s automotive aftermarket business. An executive with more than more than 20 years of sales and marketing management experience in the industrial and automotive industries, Gyllstrom earned a bachelor’s degree in marketing from the University of Illinois and a master’s of business administration in marketing and finance from DePaul University in Illinois.
Recently, Gyllstrom shared with aftermarketNews a few insights into the underhood category as well as Visteon’s evolution from a Ford spin-off into an ‘all-makes/all-models’ supplier.
Visteon’s North American operations were reshaped through a 2005 transaction with Ford Motor Company. How has that agreement benefited Visteon?
Visteon’s transaction with Ford, which included the transfer of 23 facilities to a Ford-managed business entity, created a more competitive structure for Visteon’s North American manufacturing operations.
The key benefits of the agreement are a more cost-competitive North American business structure, a more balanced customer portfolio and a more evenly distributed revenue mix. Prior to the agreement, we derived 63 percent of our revenues from North American operations; today, our business is more globally balanced, with 39 percent of revenue in North America, 43 percent in Europe and 18 percent in Asia.
The transaction positions us to focus on our core product lines in the original equipment and replacement parts markets. For the aftermarket, these core products include climate control, rotating electric, ignition and mobile electronics.
Is OE quality becoming more or less of a differentiator for Visteon? It seems like every supplier is promoting “OE fit, form and function” these days.
Visteon operates in an industry where professional technicians, with good reason, automatically return parts that don’t look, fit and perform exactly like the original. This is especially true in the underhood category, where shops may only get one chance to service the vehicle. As a result, technicians are simply not going to take a chance on a non-OE technology complicating an installation or causing a comeback.
The growing preference for OE quality extends beyond the traditional characteristics of fit, form and function. Technicians and shop owners understand that appearances can be deceiving, that there can be any number of important engineering differences in the OE part that are not easily seen. In short, these customers are learning that not all “OE” is the same – they know which manufacturers and brands truly design and build components to the vehicle manufacturer’s requirements. The bottom line is, you can’t offer “OE quality” if you’re not an OE manufacturer.
Do distributors and service providers now recognize Visteon as an all-makes/all-models supplier, or is the company still viewed as a Ford-centric organization?
A growing number of distributors and shop owners understand that Visteon works with all major vehicle manufacturers worldwide. As a result, we are having tremendous success helping customers leverage our all-makes/all-models offerings, particularly in the climate control and rotating electric categories. And we’re aggressively expanding our aftermarket portfolio into other product areas where distributors have asked for our support.
Do you fight the perception that Visteon, as an OEM spin-off, doesn’t understand the aftermarket?
When we spun-off [from Ford] back in 2000, I think many of our competitors held that assumption. But our rapid growth over the past six years has changed that thinking. When we entered this market, we committed to listening to the distributor and installer. We committed to meeting their needs with OE-quality products backed by exceptional marketing and merchandising programs. Our customers see that we’ve delivered on this commitment, which explains how we established more than 100 new distributor relationships in 2005 alone. And this growth continues in ’06.
In industry presentations, you have consistently been very positive about the prospects of the underhood category. Yet, the incidence of underhood repair has declined on most vehicles. Why the optimism?
It’s true that today’s underhood systems have longer maintenance intervals. At the same time, a significant portion of the vehicle population is reaching prime repair age. Also, because vehicles are lasting longer, shops have the opportunity to capture underhood business from the second and third owners of vehicles. And consumers are more comfortable with the idea that aftermarket service providers have both the knowledge and equipment to diagnose and repair underhood systems on all makes and models. The key for shops, of course, is to have convenient, affordable access to the right replacement components. That’s where our OE quality promise is so important.
Is climate control a promising category for the aftermarket? What do distributors and service dealers need to do to be successful in this category?
Air conditioning, in particular, is promising for shops that are committed to growth through quality, customer service and value. That means investing in leading brands, OE-quality products and ongoing technical training. Independent shops that demonstrate expertise in the A/C sector have a very strong competitive position in terms of their access to the same OE technologies available to dealership service departments.
Our heat-transfer product line – radiators and condensers – also have enjoyed robust growth due to distributors and installers getting the business of quality-conscious vehicle owners. There’s a huge range of quality available in aftermarket heat-transfer products. But the growth-oriented distributors and service dealers have aligned themselves with Visteon because they understand that our OE expertise helps ensure a better outcome for the customer.
On a related note, I was pleased to learn last year that distributors and installers were asking us to create retail-style, branded packaging for our radiator line. Most aftermarket radiators come in a plain brown box. But our customers understand the Visteon brand means premium quality, and they want to leverage our name value through branded packaging. So now, we package our replacement radiators in a retail-style box that carries the Visteon logo.
Why is Visteon interested in the rotating electric category – it seems like an overcrowded, extremely price-driven segment that is being attacked by overseas competitors.
Visteon – and our customers — identified a market need for replacement starters and alternators that are engineered and manufactured to our OE-quality standards. It’s no secret that many distributors and installers experience unnecessarily high return rates in the rotating electric category. We have leveraged our OE engineering and manufacturing expertise to deliver 100 percent new and premium remanufactured units that eliminate comebacks. And we’ve backed this excellent product with a powerful net-pricing program designed to maximize distributor profitability. The results demonstrate that our strategy is working – our sales of starters and alternators continue to grow and, more importantly, distributors are experiencing excellent warranty performance and increased profitability. That’s a compelling story.
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