Executive Interview with Howard Laster, Director of Marketing and Business Development, Siemens VDO Service & Special Solutions Group - aftermarketNews

Executive Interview with Howard Laster, Director of Marketing and Business Development, Siemens VDO Service & Special Solutions Group

This week we hear from Howard Laster, director of marketing and business development for Siemens VDO Service & Special Solutions group. Headquartered in Allentown, PA, the company manufactures and markets a wide range of products including replacement hard parts, monitoring systems, instrumentation, and performance accessories for the automotive aftermarket, marine, industrial, fleet and special OEM market segments.

Howard Laster, director of marketing and business development, Siemens VDO Service & Special Solutions Group

ALLENTOWN, PA —

Every other week, aftermarketNews.com offers an interview with high-profile individuals in the automotive aftermarket. We give executives free reign to express their views on anything from the state of their corporations to recent legislative news to future trends in their niche markets. Here you see what matters to the newsmakers themselves.

This week we hear from Howard Laster, director of marketing and business development for Siemens VDO Service & Special Solutions group. Headquartered in Allentown, PA, the company manufactures and markets a wide range of products including replacement hard parts, monitoring systems, instrumentation, and performance accessories for the automotive aftermarket, marine, industrial, fleet and special OEM market segments.

In his role with the company, Laster is charged with developing new business opportunities for existing product offerings, as well as seeking business relationships utilizing mutual manufacturing, engineering, customer base and sales and marketing expertise to provide unique solutions. He is also responsible for product management, marketing communications and pricing strategies.

Laster has been with the company for almost 10 years serving in a variety of executive management and sales roles. He was also marketing manager for Blue Chip Products and product manager for KSG Safeguard Engine Parts as well as owner and general manager of First Auto Parts, a proprietorship he maintained for 10 years.

Recently, Laster took time out to talk with aftermarketNews.com about the company’s new initiatives involving tire pressure monitoring systems (TPMS). Starting in September of 2007, NHTSA has mandated that all new vehicles must be equipped with TPMS. While millions of vehicles on the road today are already equipped with this safety feature, Laster contends that our industry as a whole has yet to fully understand the potential opportunities and challenges that will result. Read on to learn more.

Tell us about Siemens VDO Service & Special Solutions Group’s involvement in Tire Pressure Monitoring System (TPMS) technology.

Our group is focused on the aftermarket service business that is being created by TPMS. What we do is provide the replacement components and parts that today’s technicians will need to properly service and repair TPMS-equipped vehicles. Since our OEM group is a leading supplier of TPMS technology to automakers, it’s a natural opportunity for us to be a major player in the TPMS aftermarket.

According to the TREAD Act of 2000, NHTSA is requiring all new vehicles to be equipped with TPMS as a standard safety feature beginning in September 2007. Obviously, this opens up a number of opportunities for auto parts manufacturers and your company was among the first to jump on board. However, I imagine there are some challenges to this relatively new niche market as well. What are the benefits and challenges of getting involved in TPMS?

I think the biggest challenge is education. Everyone, from the professional technician right down to the consumer, will need to learn all about TPMS, what function it serves on the car, and why it needs to be treated like any other critical maintenance item. This is where I think the real opportunity lies for the aftermarket. The TPMS system will create additional service jobs and profits because it is required on the vehicle, and it will have to be maintained.

The sensors used in TPMS will generate new business from normal parts replacements — if they fail, or are damaged. But there are other business opportunities we can expect from TPMS, as well. Certain components, such as the valve core, valve nut and valve seal shouldn’t be reused and should be replaced any time you dismount the tire from the wheel. Then there are the diagnostic and service tools. Professional technicians will need these to make their jobs easier and more reliable. Shops will need to be able to test the TPMS system before and after the car is serviced to see if it works properly. This could help protect shops from service comebacks and keep them from getting stuck with the liability of a costly rework.

Another thing that the market will need to be made aware of is the fact that there will be several different types of TPMS systems on the road, and that each may have a different set of service requirements. At the moment, there is no set rule. I can’t stress enough how critical good education and information will be in this area.

Do you think it will be especially challenging for independent service dealers to get up to speed on this technology?

Without a doubt. Car dealers already have the early jump on TPMS in the normal process of learning how to service and maintain their new vehicles. Tire stores will be right behind because the bulk of their business profits come from tire services. Also, many tire stores are either franchise operations or tire centers owned by tire manufacturers so they will have the benefit of company sponsored education programs and training.

But, the real job is going to be getting to the independent garages. They will likely see the bulk of tire emergencies and quick repairs as well as the widest variety of TPMS systems. So they will need to be as informed and knowledgeable as the car and tire dealers are, if not more. This is an area that I think is going to present the biggest problem. The average technician may not even be aware that there is a TPMS sensor on the tire and inadvertently damage it in the simple process of fixing a tire leak.

I think it is going to take a group effort by the service industry to make sure that we educate the market at every level of distribution. Whether it’s the auto parts jobber who is servicing the independent garage or a retail chain with service bays, every facet of our aftermarket will need to be educated. And, we need to make it as simple and effective as possible.

Do you think this education will occur on a brand-by-brand basis or do you feel that we need an industry-wide education initiative?

I believe it’s a little of both. Recently, Siemens VDO has started to coordinate with the Tire Industry Association (TIA) to do some joint activities at AAPEX and SEMA on this issue. This will likely blossom into some sort of synergistic cooperation between Siemens VDO, TIA and tire dealers. Maybe down the road, something can be developed with ASE or some other organization that reaches independent technicians.

The technology is here, people are aware of it, but from what you’ve said so far it seems that perhaps they are not aware of all of the challenges and repercussions involved with TPMS when it comes to tire service and maintenance. Being that TPMS won’t be required until almost 2008, do you think we’ll have trouble getting people to take this issue seriously until it’s too late?

It won’t be easy, but I think the sheer magnitude of the situation will force a reality check fairly soon. TPMS systems have been appearing on vehicles for several years now and more are added every day. We have more than three million Siemens VDO systems out there already. And, the automakers aren’t waiting around for the deadline. They’re taking the initiative and doing it now. Technicians will begin to see a steady rise in service incidents and will have to take the appropriate steps to learn how to deal with the problems and advise their customers accordingly.

I understand that the company is introducing a replacement parts program for TPMS assemblies and components. Can you tell us about this? When will it be available?

We’re planning to introduce it during this year’s AAPEX and at SEMA shows in Las Vegas with an actual launch and distribution slated for sometime in the first quarter of 2006. As we do with all of our aftermarket products, our program will include all of the sale and educational tools needed to make TPMS viable and profitable for our customers.

What is Siemens VDO doing to assist in this education process?

Our preliminary plan is to actually get all of our sales reps and sales managers involved in an education program that reaches all of the distribution channels. Then down the road, we’d like to have the ability to hold clinics and to hand out information that could be posted in independent garages and tire centers.

Before we wrap up, are there any other key points you would like our readers to think about?

We all need to understand that TPMS is not just a safety feature. We’re trying to encourage the industry to really understand all of the benefits of this product from the aftermarket side. It not only helps prevent an unnecessary breakdown caused by a tire that’s going flat but can also optimize the life of the tires which saves money and gas mileage. We’re also talking about the vehicle’s performance. If you don’t realize that one of your tires is 25 percent lower than the rest of them, your car’s ride and handling could be compromised. TPMS makes a lot of sense; as much sense as having a rear-view mirror.

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