Energy Level High At AAPEX

Regardless of the outright attendance numbers at the 2009 edition of the AAPEX show, the pace of activity and the general mood were considerably stronger and more energetic than the prior year–a great development.

Of course, any comparison of the annual Las Vegas aftermarket parts show must be taken in the context of 2008, when the open wound of the sub-prime-driven economic crisis was still fresh and raw.

One of the positive results of that shock to the system is a release of pent-up demand in the marketplace; the aftermarket service business seems to be doing much better these days, and at the show, exhibitors had more new product offerings and a greater sense of optimism than we’ve seen for the past couple of years.

Nobody is openly admitting it, but I suspect that a significant number of products being launched at the 2009 event were, in fact, ready a year ago but had been held back owing to the uncertainty in the marketplace. With that dark veil lifting, companies are once again bringing product to the market, confident they have at least a chance of reaching their potential.

A slew of key introductions from Bosch probably placed it most firmly on the product-intro wagon. In addition to some new shop floor tools, a new diagnostic monitor, and a smoke machine, the company announced the launch of a comprehensive automotive battery program in the continental United States, as well as the DistancePlus ultra-premium grade oil filter offering 23 part numbers.

Most importantly, Bosch announced that it was entering the crowded brake market. The QuietCast brake pad program, with 789 part numbers, will provide 95% coverage for all makes and models of Asian, domestic, and European automobiles, light trucks, and SUVs throughout the United States and Canada.

“The QuietCast brake pad program offers platform-specific ceramic, semi-metallic, and non-asbestos organic (NAO) formulations, rubber-core shims, and Molded Shim Technology (MST) on selected applications,” said Rob Backode, director of product management for Bosch Automotive Aftermarket Brake Components North America.

One of the strongest indicators of the improving lot for aftermarket companies was the announcement by Delphi that the firm had emerged from Chapter 11.

I heard Frank Ordonez, president of Delphi Product & Service Solutions, explain Chapter 11 to European audiences a number of times over the past few years, and heard him declare the company’s continued prosperity to North American audiences through the midst of it. It must have been no small relief for him to be able to close that chapter and start really moving forward.

Now that Delphi has emerged as a privately held company with product offerings streamlined from 27 to 10, Ordonez continued to emphasize the OE connection. “The more we have for the OE, the more we have for the aftermarket. So we continue to be very focused on engineering.

“Without the four years of Chapter 11, we would not be the company we are today. We continue to grow our business as we have through the Chapter 11 process,” to the tune of 15% a year over the past two years, with particular promise for the aftermarket ahead. “After picking up share and with the closing of all those dealers, the future is very bright for the aftermarket.”

One of the outcomes of tough market conditions is usually a healthier state of affairs within those companies that survive. This isn’t just by accident, of course; companies seek the tools to help them become more efficient out of necessity.

One such tool presented at the show was Activant’s suite of tools that build on the e-catalogue to provide stronger statistical basis for inventory management. These tools allow for decisions to be made not just on individual store sales and lost-sales history, or even just on the vehicles in operation, but on the wider pool of users too.

Through software tools and its agreement with R.L. Polk, the company has already seen some strong results in testing to the pooling of demand data: as much as a 15% to 20% reduction in inventory with a similar increase in coverage.

Activant Vista Replacement Rate Intelligence solutions features vehicle data integrated with daily electronic catalogue transactions. These solutions include the new Vista Catalogue Coverage Monitor and Inventory Modeling tools, which will assist manufacturers in product planning and distributors in inventory optimization.

The Eagle system’s Version 19 from Activant also features a suite of new tools.

“At the store level, the Eagle system is gaining traction,” said Tom Aliotti, senior vice-president, automotive, Activant Solutions. “The new Eagle V19 will have more CRM as well as ways to improve customer communication. Little things like integrated telephony really help improve customer relationships; it even allows you to put a picture of the customer onscreen.” Cool stuff, to be sure.

Of course, sometimes the aftermarket is about moving metal. I sat down with two companies in the challenged exhaust market.

Eastern Catalytic is a growing player in the market that started as a sideline in a family-owned garage, but has since grown to be a full-line supplier with sales in more than 70 countries; it made it to 77th in the AASA’s top 100 list of aftermarket companies in 2008. While Eastern has yet to make strong inroads into Canada, company principal Ken Schafer offered some insights into the challenges facing catalytic converter suppliers.

Keeping pace with precious metal content and construction requirements has become a continual challenge, he said. The company’s standard ECO II and ECO III (for 2003 and later applications) offerings take care of most needs, but a recent issue arose anyway.

“Even with the ECO III, there was an issue with GM models. Check-engine lights would come on.” The company ended up developing its ECO-GM Series for 2.2, 3.1, 3.4, and 3.8L engines with an R&D company. “We went with more precious metal and a new core. It worked.” He says that special chemistry for other makers is likely and is a development that is changing the market.

“It is going to be so specialized, some of the smaller guys are going to go away. Our customers want to have just one converter that will fit everything. Those days are gone.”

Further to that, Bill Dennie, director, ride control channel management, North American aftermarket, Tenneco, who was subbing in on the exhaust category at the event, says that training in catalytic converters will see a big push in 2010, noting that it reduces comebacks. The company also plans to launch an aftermarket diesel particulate filter in mid-year, but is putting a big emphasis on stainless-steel product introduction.

“With Walker, the story is stainless,” said Dennie. “We’ve been producing the Quiet Flow line with 409 stainless for quite a while. Now we’re ready to tell everybody.” Walker Quiet-Flow SS (for stainless steel) mufflers feature 409 stainless steel heads, shell, bushings, louvred tubes, and partitions. Each muffler is manufactured in the same facility as original-equipment units and is offered with a limited lifetime warranty and a 90-day Safe and Sound guarantee at no additional charge. The company also plans distribution-level promotions to help move the units through the system.

“What we’re finding is that the life expectancy is 300% that of aluminized.”

The company’s other major segment, ride control, offers some new developments as well, with Monroe offering a limited lifetime warranty on its products to combat low-cost entrants into the marketplace. I asked how much of an issue this was.

“It’s not significant yet; there’s more discussion on it, without a lot of product in the market. We believe that jobbers and installers still want to sell quality products. And we’ve got to let people know that we are going to stand behind our product.”

And that is a sentiment every company can appreciate.