MARKET FEATURE: Profiting From The Changing Tune-Up Market

One of the difficulties currently faced by the automotive aftermarket is consumer misinformation about maintaining vehicles properly.

In many cases, consumers see advertisements and general media reporting about recommended spark plug replacement schedules of 160,000 km and are making the assumption they can drive their car without having anything checked, maintained or replaced with the ignition system for that long.

Unfortunately for consumers, this is not reality. In the case of high-tech premium spark plug change intervals, for example, various malfunctions within the overall engine system could cause plug fouling or other ignition difficulties and result in driveability problems well before 160,000 km.

This longer spread in service intervals, and shrinking pricing of standard plugs, are driving the whole tune up market, says Colin Philip, Honeywell Consumer Products Group, makers of Autolite brand spark plugs.

“With the changes in today’s vehicles, the spark plug market has been on a steady decline,” says Philip. “This affects the whole tune up market in respect to replacement parts like air filters, distributor wires, fuel filters, etc.”

Instead of the traditional tune-up market being simpler, it is in fact becoming more complex. Varying requirements, proliferating vehicle models, the rapidly expanding number of parts involved, and the increasing age of the vehicle fleet are all contributing factors.

Dennis DesRosiers, president, DesRosiers Automotive Consultants, comments that although technological changes at the OEM level are affecting the traditional tune-up market, “The aging of the vehicle fleet means that traditional ‘tune-up’ products, while not a growth market, will remain good for some time.”

He also notes generally that while accepted wisdom is that the DIY segment overall is declining, the tendency for the vehicle fleet to age is a counteracting factor. He also says, “Now that there are so many vehicles of various models and ages on the road, with varying parts and technologies, there is a pronounced proliferation of SKUs. The traditional aftermarket still has to be able to have parts for these vehicles and be able to fix them, so the strong support of the WD is important. With the current parts proliferation it would be difficult for a jobber to carry all these parts in inventory.”

In concert with declining replacement rates, this puts added pressure on the jobber.

Stephen Durkin, national marketing coordinator for NGK Spark Plugs Canada, comments, “One of the factors in this has been the change from predominantly V8 vehicles to six and four cylinder engines. Also, the advent of distributorless ignitions is going to be a factor in terms of wire set sales, but this will not be significant for five or six years,” Durkin says. On the positive side, Durkin notes that to a large extent, selling more premium product can help compensate for the decline in spark plug unit sales.

Durkin says there is a growth market in oxygen sensors. “We launched oxygen sensors into the aftermarket two years ago and we look on this as a growth area. Technicians at the service level are now more educated and are looking for this type of sale.”

This reflects a change in both the technologies in the cars and the objectives of a tune-up, addressing emissions as well as driveability.

“Years ago, the traditional ‘tune-up’ included replacing the points, replacing the spark plugs, resetting the timing and adjusting the carburetor and choke,” says Michael Smith, brand manager, ignition/fuel products, Federal-Mogul Corporation.

“Today, cars no longer have carburetors or points; they have electronically triggered ignition systems. Spark timing and air/fuel mixture are controlled by the ECU. Additionally, unleaded fuel and precious metal components have increased spark plug life. Therefore, there is little to adjust in a traditional sense. In short, the engine management system has, through technology, changed the way many of the basic functions are carried out in the internal combustion process.”

This factor, Smith says, changes the concept of the tune-up. “Before, a tune-up was considered necessary regular maintenance in order for the vehicle to perform efficiently. Today the tune-up should be looked upon as recommended preventative maintenance.”

Smith says that a large percentage of shop repairs today are done as a result of driveability complaints. The diagnosis and repair of driveability complaints are generally higher than the cost of a periodic preventative maintenance tune-up. “Therefore, our recommendation is for preventative maintenance tune-ups at periods shorter than the indicated potential tune-up cycle for that vehicle.”

Smith says that a periodic preventative maintenance tune-up should include:

Replacing the spark plugs

Replacing the air filter

Changing the oil and replacing the oil filter

Replacing the PCV valve (where applicable)

Performing a complete engine management system diagnosis

Inspecting the primary electrical system wiring and ignition leads

Performing a charging system check

While the manufacturer may recommend a long potential tune-up cycle, Smith says, “Whether a vehicle needs repairs or not is often influenced by different driving styles and varying weather conditions, which affect the wear and tear on expensive sensors and control devices. Failure of a single sensor could affect other parts of the engine and compound the cost of repairs.”

Smith adds that a full-service jobber will be stocking all the parts necessary to supply all of his installer customer’s needs. In the ignition category, minimum stocking requirements are spark plugs, ignition leads and sensors for popular vehicles in his geographic area.

Chuck Ruth, director of product management, engine management products, Bosch Inc., says there are a variety of factors at work in the influence of the age of the vehicle fleet on the tune-up market. “In the Northern U.S. and Canada, the aftermarket is losing opportunities because a lot of older cars (with their short service intervals) have disappeared.” However, there is a compensating factor in the current trend of the existing fleet to age, though, “The older the vehicle, the more people try to economize on parts.”

He says that OEM technology is affecting the traditional tune-up market in a number of ways. The use of platinum-tipped plugs means a longer interval before plug replacement is required, for example. Also, OEMs are using higher quality silicone wire sets, which have the same effect on the sale of aftermarket wire sets. Direct-fire ignition will have an impact on the traditional tune-up market, eliminating plug wires.

He says, however, there can be a compensating factor in that with the trend to higher OE quality, customers are more likely to replace parts with equal quality. “So while there may be fewer repairs, hopefully those repairs will be higher-ticket transactions and more profitable. Spark plugs, for example, offer a good opportunity to sell-up. The growing trend to mandated emissions testing is also having a positive impact on ignition parts sales and on the sale of oxygen sensors.”

Justin Sequeira, engine management product manager, Blue Streak-Hygrade Motor Products, comments that the traditional aftermarket tune-up concept has evolved into an engine management issue. Rather than ignition parts products, he talks in terms of engine management products.

Although technology is rapidly evolving, Sequeira says that spark plugs will be around for a while and notes that one of the large vehicle OEMs has recently invested heavily in plug technology. He also notes that although there are still a lot of carburetted cars on the road, “Overall, the traditional concept of the Spring tune-up is tending to disappear. The tune-up market now involves a multitude of factors depending upon the model and the age of the vehicle involved.”

The fundamental fact of today’s tune-up market is that it is very different from what many technicians and veteran counterpeople grew up with. To effectively handle the many changes in
volves rethinking not only the parts you stock and sell, but also how and when you sell them.

Quick Market Facts

Although spark plugs are classified as a high incidence item in terms of repair/purchase by product area, spark plugs have gone from an incidence of 44.8% in 1995 to an incidence of 35.5% in 1998.

“Other ignition parts” have gone from an incidence of 14.6% in 1995 to an incidence of 10.8% in 1998. In looking at how work is performed with spark plugs, DIY has grown slightly from a rate of 45% in 1996 to a rate of 47% in 1998. This is above the 33% average of DIY installation for other parts.

With ignition parts (excluding spark plugs) the rate of mechanic installed (MI) is 53%, which is below the MI rate for other parts.

Independent repair shops account for the largest market share of service outlets with respect to the replacement market for spark plugs with 44%.

Canadian Tire accounted for the largest market share of retail outlets with respect to the purchase of spark plugs with 52% followed by auto parts stores with 23%.

Source: The AIA 1999 Car Maintenance in Canada report authored by DesRosiers Automotive Consultants.