Second Day of Presentations at 2004 GAAS Predict Strong Growth - aftermarketNews

Second Day of Presentations at 2004 GAAS Predict Strong Growth

The second and final day of the 2004 Global Automotive Aftermarket Symposium (GAAS) ended on a strong note with some impressive new numbers and predictions for the future success of the industry. For the first time in many years, financial analysts are beginning to sit up and take notice of the aftermarket.

by Amy Antenora
Managing Editor, aftermarketNews.com

CHICAGO — The second and final day of the 2004 Global Automotive Aftermarket Symposium (GAAS) ended on a strong note with some impressive new numbers and predictions for the future success of the industry.

For the first time in many years, financial analysts are beginning to sit up and take notice of the aftermarket. Leslie Armitage, a managing director of private equity firm The Carlyle Group, and Greg Guyett, a managing director with the JP Morgan lending firm, talked to GAAS attendees about venture capital in the marketplace. With more and more private equity firms becoming involved in acquisitions of aftermarket businesses, Armitage noted a number of advantages to investing in the aftermarket versus OE businesses, such as predictability, stable cash flow and a number of drivers to growth including the increasing average age of cars on the road and increasing average of miles driven. “We are very bullish on the aftermarket right now,” Armitage said.

JP Morgan is one of the largest banks working with the automotive industry today and Managing Director James Guyett also indicated that his company is noticing the appeal of the aftermarket. Guyett provided a few things JP Morgan looks for when working with aftermarket businesses, including a good management team with roots in the industry and a strong business plan, and again, stable cash flow. He also noted the importance of having an opportunity to lead market share with a strong product of brand.

Keeping with the theme of this year’s symposium — Leaner, Faster, Better — the event also included a discussion of best practices with leading industry experts on supply chain management. Corteco’s Tom Faust, Jeff Kaminski of Federal-Mogul and Rob Malone of ArvinMeritor shared with the audience steps they took to implement lean and supply chain management principles. The talk focused on the importance of establishing a lean culture throughout a company. “Establishing a culture is by far the most important thing you can do, and it is a long process,” said Malone.

Kathleen Schmatz, president and CEO of the Automotive Aftermarket Industry Association (AAIA), which spearheaded the industry’s “Be Car Care Aware” consumer education campaign, has established another new tradition, the annual reporting of the campaign’s progress. In this second annual report card, Schmatz declared the campaign a “Branding Success Story.” In the past 36 months, consumers, industry members and media alike have shown tremendous interest in the campaign. Among the impressive statistics — 3,000 people signed up for online registration of media kits in March of 2004 (up from 800 in March 2003); and there were 103,000 visits to the www.carcareaware.org Web site in March ’04 (up from 30,000 in March ’03)

A panel of the industry’s leaders rounded out the final presentation for the 2004 symposium day-and-a-half event. The Industry Leaders Panel, was moderated by AAIA’s Al Gaspar, and included Mark Foote of Canadian Tire; Mike Lambert of Parts Plus; Larry Stevenson of Pep Boys; and Ken Walker of Meineke. Opening with an opportunity to discuss whatever they wanted, the panel addressed a variety of issues including brand awareness and brand relevance, the importance of training, whether leaner and faster really is better and the need for continual reinvestment in a business.

Not to forget what this annual event is all about — proceeds from the annual GAAS benefit the GAAS scholarship fund. This year the group expects to provide from 100 to 120 scholarships to students pursuing aftermarket careers. More than 700 scholarships have been awarded since the fund was first started.

While the GAAS symposium typically alternates locations every year between Chicago and Detroit, the 10th annual 2005 GAAS will again be held in Chicago on May 10-11, 2005.

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