ALLENTOWN, PA —
Every other week, aftermarketNews.com offers an interview with a high-profile individual in the automotive aftermarket. We give executives free rein 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.
Our latest edition of “Executive Interview” features Wolfgang Winzer, vice president and general manager of Siemens VDO Automotive Corp. Service & Special Solutions, North America. In this position, Winzer is responsible for all of the Siemens VDO Automotive’s aftermarket activities in the U.S. He was appointed to this position in January 2002 when Siemens Automotive and VDO North America merged to form Siemens VDO Automotive Corporation. Prior to the merger, Winzer was head of VDO North America’s Trading Division.
Winzer was a 20-year veteran with VDO, having served the company’s Trading and Aftermarket organization in several positions. From 1998 to 2000, he was Vice President of the Fleet Division with worldwide responsibilities. From 1995 to 1998, he served as Vice President of Sales Overseas, where he managed all markets outside of Europe. Between 1985 and 1995, Winzer was a Project Manager (Sales and Marketing) for Engine Control Systems worldwide, Sales Manager Germany, and Head of the Nuremberg, Germany Branch Office.
Siemens VDO Automotive Service & Special Solutions is one of the leading companies in the North American automotive aftermarket. 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.
Product lines include Siemens VDO HVAC Blower, Radiator, and Condenser Fan Motors and Cooling Fan Assemblies, Power Window Regulators, Power Window Motor / Regulator Assemblies, VDO Performance Instruments, and VDO Dayton Car Navigation and Multimedia Systems.
Winzer recently talked with aftermarketNews.com about the company’s extensive history in the OE market and how this will help them build a stronger aftermarket segment. He shared some of the company’s goals for its aftermarket business in the coming years.
Q: Siemens VDO Automotive (SV) has a long history on the OEM side. What advantages do you think this gives you over aftermarket competitors who are not OEM suppliers?
A: This is one of the most important advantages to being part of such an established organization like Siemens VDO, because we can really bring the OEM quality into the aftermarket.
We use exactly the same manufacturing locations for virtually all of our aftermarket products that we use for OEM manufacturing. Our aftermarket offerings are built to OEM standards. This means that the product we offer the aftermarket is derived from a foundation of technological expertise in engineering, design, concept, testing and diagnostics. Our ability to tap into this resource, in conjunction with our excellent price performance ratio, means SV sets the standard in the aftermarket. The typical aftermarket competitor can only hope to follow.
Q: You’ve been quoted as saying that the company wants to grow its North American aftermarket business significantly over the next 3-5 years. Can you expand on this? How do you plan to achieve business growth?
A: There are two directions in which we want to take the business. One will focus on our internal growth, the other on external growth.
With regard to internal growth, we plan to significantly expand our product offering by tapping into our OEM division’s extensive portfolio. Our goal is to have all products that we manufacture for the OEMs also available for the aftermarket. One good example would be the fuel module business that we are just introducing. We are already a major player in that category in the OEM market. With full access to that product line, we will now bring it to the worldwide aftermarket.
The other side of our growth plan, which focuses on external growth, will include establishing strategic alliance and/or cooperations on both ends of the supply chain. We are actively pursuing and are open to the potential of adding products manufactured by other vendors to our product portfolio. Of course we are seeking synergies and commonalities with these manufacturers to ensure that we extend our offering with products conducive to Siemens VDO’s strategic plans. We are not merely looking for products to sell. Specifically, this means we want to ensure that we are allying with other manufacturers that meet our strict quality standards. We are looking for the right products to sell. Similarly, we also welcome inquiries from other quality manufacturers that wish to add SV products to their portfolios. Often, we have a product that the marketplace is looking for, but our offering is not enough to provide a full line and all the support that goes with it. An alliance with another manufacturer, who may wish to fill out their line, is often the optimal choice for all parties involved – especially the customer.
Q: In recent years, the compact performance market has been growing at an astounding rate. Retail sales of accessories and other products for this sector grew by 55.9 percent in 2002, according to statistics from SEMA. What are your plans for the performance market and what role will it play in your overall business objectives?
A: The performance market already is a strong segment of our business. With our full line of VDO-branded gauges, we are very well known with import tuners, street rodders, as well as the die-hard performance enthusiasts. The market recognizes the VDO gauges as some of the highest quality, best performing instruments on the market today. This well regarded name, in combination with our OEM heritage, is what enables us to bring products from our recently introduced Power & Sound Technology category to the performance market. This OEM innovation, engineering and performance expertise is what sets Siemens VDO Automotive apart from the competition. Without an OEM background, other companies do not have access to such an array of quality products, technological resources and facilities that can be developed or redeveloped for the performance and aftermarket sectors.
For example, one very exciting product that we are bringing to the aftermarket was introduced at this year’s AAIW 2003 in Las Vegas. Displays at both the SEMA and AAPEX shows highlighted our Performance & Sound technology product. This product, created at the OEM level as Active Noise Control (ANC) for an automaker, was actually re-engineered for the aftermarket to provide the opposite effect – crank the noise up! Simply put, this performance and sound technology product will be like transforming a standard Honda Civic into a Ferrari.
To expand, the device does not make a vehicle quieter, but actually makes it louder – significantly louder. The vehicle will sound like a higher performing engine in a car like Ferrari or Porsche. What is so innovative and completely unique about this device is that it is not your typical sound improvement product that changes the exhaust sound. It literally modifies and enhances the sound of the engine. And by the way, it provides an additional 6-10 hp gain. All this at a price competitive to simple air induction tubes. This is innovation that could not be realized by any other company. Only SV with its strong segment recognition and OEM technological background could conceive, develop and achieve such a unique offering.
Q: SVA recently unveiled a new line of cooling fan assemblies for the aftermarket through a relationship with Taiwan-based TYC Brother Industrial Co. Can you tell us more about this?
A: This is a very good example of what I mentioned earlier – our external growth strategy. In this case, we have partnered with TYC to source products from them. We have taken a product that we possess the OEM expertise on, but not the complete all-makes application coverage to bring to market. TYC on the other hand had the fan assembly product we needed to extend our already well-established radiator fan motors product line. Combined with a quality level that meets our high standard, we had an exact fit. For TYC, using our access to the traditional, as well as retail, distribution channels, we have enabled their product to be disseminated into a market segment previously not reached by them.
Another good example of this would be the long-term cooperation that we have established with Audiovox. In this case, Audiovox is selling our in-vehicle navigation systems under their own brand name, which opened their existing distribution channels for us. Regardless of the strengths of the Siemens VDO Automotive family of brand names – Siemens VDO, or VDO, or VDO Dayton, we are convinced that strategic alliances such as these can be very successful for us. Our product still infiltrates the market place, even as privately-labeled or privately-branded merchandise. We are sort of like a silent giant because a lot of our products are now, and have been for some time, under other labels in major automotive and electronics retailers, as well as with traditional warehouse distributors. While we would always prefer to promote the Siemens VDO Automotive brands, we have come to realize that it is important to just get the product out there and build the following first.
When we talk about these types of partnerships, whether we play the vendor role or the company that is making the sale, the synergies have to work. We look for natural relationships. Again, we are already an OEM on fan assemblies and we already sell radiator fan motors by themselves, so it was a natural for TYC to align with SV. Audiovox, as another example, has great name recognition in the North American audio sector, but we have the navigation innovation and technology. The synergies have to work. We are not just picking alliances out the sky.
And of course, we are very conscious about the quality. Every product we sell has to withstand the stringent testing that we perform and control in our facilities. The products we sell have to meet the same quality standards as if it were a Siemens VDO Automotive product, otherwise we don’t touch it.
Q: What do you hope to gain from these types of synergistic partnerships? What was the idea behind moving in this direction?
A: Honestly, we have found that the automotive aftermarket has very limited knowledge of whom and what Siemens VDO Automotive represents. They will say “Siemens VDO? Oh yeah, they make the electric motors…or VDO, they make the gauges.” While this global recognition as a quality leader in these areas is great – we are striving to market ourselves as not just the electric motor and gauge company, but a whole lot more.
I am not speaking of mere quantity of products that we have in our arsenal of potential, but the quality of products and services that we offer the aftermarket. As we are an OEM manufacturer for so many components — it makes sense for us to bring this capability to the aftermarket. These products are revolutionary. We offer state-of-the-art navigation systems and cutting edge audio, as well as automotive electronics and sensors that are all over a car today and will be even more abundant in vehicles going forward. It’s not the old line types of products like ball joints or shock absorbers and struts. These are the products of the future, the concepts that the automotive industry is building on now. Our heritage, vision and innovation expertise make us an industry leader. Siemens VDO Automotive is just the type of company that one would want to partner with for a solid foundation for the future, rather than holding on to the past and potentially getting left behind.
We are sure that the variety of our product portfolio is most impressive and attractive to potential partners on the distribution side, as well as the supplier side. Here is an organization that is eager to grow and we will go out of our way to make partnerships work. We encourage people to understand what we have to offer. If they drive that demand, we can get it to them.
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