By Amy Antenora
Every year, there are more than 100 new vehicle launches and changes that significantly affect the landscape of the automotive industry. What impact do these new vehicles have on your company and the industry? How important is receiving timely new vehicle information to your product and inventory planning? These questions were asked of AMN readers and aftermarket executives working within various segments of the automotive aftermarket – including warehouse distribution, manufacturing and collision repair. And, what stands out most among all the comments were heard is the emphasis on the need for timely information.
“The introduction of so many new vehicles every year impacts our business significantly. Without timely information, it makes it very difficult to conduct inventory planning. While computer technology has made the process more efficient, if new vehicle information isn’t available in a timely, accurate fashion, it not only impacts our business, but that of our customers,” said Rusty Bishop, CEO of Federated Auto Parts. “A lack of information about new vehicles that results in a gap in our inventory may cause our service provider customers to be forced to buy from another supplier or, worse yet, send the vehicle back to the dealer. It is a huge challenge to get the right part to the right place at the right time, but without the right information, time and money are lost throughout the supply chain.”
In some instances, the lack of timely information can actually send customers to the competition, as one AMN reader working in the collision repair segment pointed out.
“It is extremely important in the collision aftermarket to receive this data ASAP,” wrote an AMN reader who responded to our survey. “Without it the aftermarket collision customers are back at the dealer for OE parts. In the aftermarket collision segment, working with data that is more than six months old when you receive it is not very helpful. We need information that is up to date less than six weeks old to maintain current vehicle coverage.”
There is one segment of the aftermarket that has the good fortune of a little more breathing room when it comes to the need for time-sensitive information. According to Ted Hughes, Marketing Team Leader – Program Development, for MAHLE Clevite, timely information is still important for product planning in the engine parts business, however there is less pressure than in some other segments.
“Regardless of what segment of the aftermarket a company is in, there is always significant pressure to stay current on late model coverage. This pressure is slightly smaller regarding engine parts,” Hughes said. “While the pressure is still there, the time-frame for engine rebuilds are delayed anywhere from one to three years. The fact that one engine is typically used across multiple platforms also reduces the pressure for new vehicle coverage. The demand changes in certain instances when there is an OE part that has a high rate of failure — this means we need an aftermarket fix as soon as possible.”
Hughes added that the window for engine rebuilds usually doesn’t start for about three to five years. “That typically provides enough time to gain the required information on not just the technical specifications for the parts themselves, but also allows us to plan accordingly based on vehicle registrations and how we best should manage inventory regionally to best utilize our network of Customer Care Centers around the country,” he said.
While product and inventory planning in the engine parts business is on a slower turnaround, for other companies such as chemicals maker Shell Lubricants timely new vehicle information is imperative and is the basis for its product offerings. “We typically look for new vehicle information on a quarterly basis to access product changes and evaluate trends on a yearly basis for focused new product developments,” said Shawn Subramaniam, technical manager, Shell Lubricants.
R. L. Polk & Co.’s Mark Seng, vice president strategic markets, points out that the industry must work together to tap into the significant opportunities that can come as a result of the influx of new or redesigned vehicle models each year.
“The aftermarket must react quickly to these new vehicles in order to provide key non-warranty or crash items to their customers,” said Seng. “In 2007, there were 40 of these new models, not including the many facelifts or lesser model updates offered by the automakers, which accounted for 2,168,501 registrations. This represents a significant opportunity to the aftermarket which is potentially missed if the manufacturers, distributors and retailers are not aware they are on the road. As an industry we need to collectively work together to bring new vehicle data to the market much quicker and with more complete information.”