Beyond the Floor Show

Possibly one of the least promoted aspects of Automotive Aftermarket Industry Week in Las Vegas is the fact that some of the most valuable events take place away from the show floor.

So, while tens of thousands of visitors flock to the thousands of exhibits at the AAPEX, SEMA and NACE events, some of the most far-reaching work takes place slightly off the beaten path.

This year was no dif-ferent, with several significant announcements from companies and associations who were taking advantage of the fact that much of the industry is in town.

Among the most notable announcements was the Automotive Aftermarket Industry Association’s so-called Asian Initiative.

In short, this was the announcement of a two-pronged effort to provide better access for U.S. manufacturers to the Chinese aftermarket.

The idea, according to AAIA president and CEO Kathleen Schmatz, is to “explore the opportunities to take American products, American ex-pertise, and American distribution to the growing Asian aftermarket.”

According to Schmatz, some 78% of the association membership is selling some products in the Asian aftermarket already, though there remain significant barriers.

The Association’s government affairs and trade vice-president, Lee Kadrich, says that there have been some victories by companies breaking into China, though most of those companies have been European. That is now changing, he says.

“This is very exciting. This market is new. We can put our own stamp of open competition on this market.”

The association is pinning its hopes on two events. The first, to take place in March 2007, is an Executive Enrichment program designed to improve aftermarket leaders’ understanding of the market with visits to Shanghai and Beijing.

The second is a trade show, the Asian Automotive Aftermar-ket Expo in Macao, China, to take place in 2008.

It is notable that the announcement made much of the fact that it would be held at the Venetian Hotel there — it’s virtually a knockoff of the Vegas venue, but there was nary a word about any anti-counterfeiting initiatives. It is also notable that this was a key announcement prior to the Vegas event, where many worry about visitors from halfway around the world making off with their intellectual property. In Macao, many of those undesirable visitors would be only a 15-minute tram ride away. That is obviously an issue that will have to be addressed.

Among the less wide-ranging announcements, but perhaps with more immediate impact, were those on the product front.

Hella, for example, had a number of announcements that together can be taken as a trend. While the firm does have some new lighting options, in keeping with its best-known product category, these are being integrated into whole assemblies, reflecting the desire for a more factory look. An F-150 grille, for example, had full lighting enhancements included — no add-on look here. Among the other additions was a very tidy tire pressure monitoring system with possibly the best-looking display of any retrofit unit. Small and with interchangeable faceplates, it integrates well with the interior. The company is also well into the planning stages of releasing a rear-view camera to the market. Hella is not alone. It is one accessory that is set to become a market all its own in the next year, with room for high-end, low-end and everything in-between products.

ChevronTexaco also announced a major reformulation of its Havoline brand, with the addition of Deposit Shield. It marks a major push to move the brand upmarket. “The beauty of this formula, and the ‘Deposit Shield’, is that they test very well [with consumers],” said Alison Townley, consumer sector business manager for Chevron Products Company. “The consumer doesn’t have to understand the intricacies of the engine to understand that grime and deposits can harm your engine.”

The technology is based on detergent technology that provides improved oil stability; this creates a protective coating that shields against deposit formation.

Havoline will be offering its new Deposit Shield formula in conventional, high-mileage and synthetic-blend formulas, in quart and new one-gallon bottles. Townley did say that the introduction will be accompanied by a price increase.

Further to new formulas, Delphi Product and Service Solutions announced that the parent company continues to branch out from its GM business, with fully 55% of the company’s commerce now being non-GM. “It’s not because we aren’t proud of GM. We needed to diversify,” said Frank Ordonez, president of Delphi Product and Service Solutions.

Ordonez also said that, since filing for reorganization under Chapter 11 just more than a year ago, “the performance of the company has never been better. We have not missed one shipment to any customer as a result of the restructuring.”

Several product line enhancements were the focus of announcements, including blower motors, HVAC components, remanufactured engine control units for Ford and DaimlerChrysler in addition to the existing GM applications, and planar oxygen sensors. “We are going to leverage our OE ties to help our aftermarket customers,” said David Barbeau, Delphi’s global sales & marketing director. “Over 70% of vehicles with the previous cone technology [oxygen sensors] can be upgraded.”

Connecting the demand with supply for product normally considered dealer-only is an issue for the entire aftermarket.

It’s a rapidly changing market, says computer systems provider Activant’s Tom Alliotti, vice president and general manager of the automotive business.”We’re starting to see more people stepping up and embracing technology. Jobbers are starting to see what technology can do for them.” There is also change at the garage level. Larger organizations have stepped aboard with connections to their main suppliers, some of the smaller ones may never get that far, and in the middle is a need for a different approach. The company’s ASP model Service Estimator product is designed to address this need.

“WDs can offer this to customers in this segment of the market. There is freedom of choice, but the jobber who offers it will offer to his customer of choice and will likely be at the top of the list.” The system allows customer data to be retained by the jobber, while the garage customer has full access to ordering with no more than an Internet connection. Furthermore, setup takes less than five minutes, as it draws on the pricing matrix, cataloguing, and inventory data already on the jobber’s system.

Of course, technicians having to deal with the repairs on such systems will have to have the right information. That was the topic of discussion by the National Automotive Service Task Force (NASTF), which, for those who don’t know, is the body created to oversee voluntary access to repair information from the automakers in the U.S. While that model exists only in the U.S., there are still many who believe that model is the way to go in Canada.

However, NASTF is currently undergoing a reorganization to become more permanent, with a staff and infrastructure in place of the current assemblage of volunteers.

“NASTF, for all the work it has done, has been a volunteer organization,” says chair Charlie Gorman. “To move forward, the process and information must be formalized.

“We are at a critical point and we need to ensure that everyone is represented.” Gorman says that the organization’s continued existence is not in question, regardless of the progress of the Right to Repair legislation that would entrench the access in law, and that many believed would threaten NASTF. “In every board meeting I have ever had, not one point has ever revolved around Right to Repair legislation. It’s time that everyone got aboard.”

An important part of the reorganization is that the Institute for Automotive Service Excellence (ASE) will now handle all administration. As a certification body, it has no axe to grind with one position or another. In essence its sole purpose is the betterment of the trade. It is generally regarded to be an inspired decision.

Still, even though access to repair information is available, it is not being used as much as many may think.

“There is a perception that there is a lot of accessing of OE websites,” says Ron Pyle, president of the Automotive Service Association (ASA), which created NASTF. “That is not the case. The majority of access is through third-party providers,” such as Alldata or Mitchell. He says it is an education process to get technicians to understand what information is available to them.

“We really need to ensure that the solutions are made available in real time, while the car is still in the bay,” says Pyle.