Auto Service World
News   May 8, 2003   by Auto Service World

Coping with Changes In Aftermarket The Road to Success

How aftermarekt players cope with changing economies and market drivers will determine how well many of the aftermarket players will fare in a changing global and North American economy a General Motors executive told the Global Automotive Aftermarket Symposium this morning.
Growth in the global vehicle population is expected to be strongly skewed to the Asia-Pacific region, and closer to home, many of the factors that had been relied upon to drive business have changed.
"Certainly we can characterize the world economy as relatively weak, but certainly unpredictable," says Doug Herberger of GM Service and Parts Operations. With the 9/11 events fading into the past, the effects continue, he says, predicting that growth should improve in the second half of the year.
Down the road, though, it is how companies cope with some critical issues affecting every market that will determine success.
Economics, miles driven, and new vehicle sales affect the size of the aftermarket, but there are other factors at play, such as the quality of vehicles, and competition. The result is that the number of repair orders continues to decline. In the face of this reality, then, where is the money to come from?
"Executing lean, the systematic elimination of waste, is key," he offers. Manufacturers have done it. Warehouses can, too, he added. "A lean supplier can be more market responsive with short lead times and smaller production lots."
By extension, lean retailing is another factor. "Everyone in the entire supply chain must collaborate to provide high quality service to the customer."
Telematics is another factor for success. Right now, the concern is that the mobile, satellite based diagnostic and service referral’s potential resides exclusively with the automobile manufacturers, and Herberger did nothing to assuage these fears.
"This has the potential to significantly transform our industry. The bottom line here is that service in a digital world means quicker resolution, higher quality and improved customer satisfaction. It can also provide complete visibility of service centre demand. The result is the elimination of waste and obsolescence by improving order fill and customer satisfaction.
"In the electronic world, the winners are those who control the information," said Herberger.
Among other factors he pegged as critical were changing the perception of the technician, dealing with a changing demographic–in the U.S. the shift in minority population is quite dramatic–coping with regulatory change, and grasping the need for personalization of vehicles.
He also zeroed in on counterfeiting. In some markets, chiefly in the Asia-Pacific regions, counterfeit products of all kinds rival and exceed sales of the genuine articles. "[Globally] the aftermarket has lost $18 billion annually from counterfeiting.
"We need funding to fight this. We need to work in collaboration to create more leverage. Defeating or blunting counterfeiting requires a full court press now.
"We certainly live in exciting times. If we have the ability to cope with these factors, most of us can prosper."
The Global Automotive Aftermarket Symposium is the industry’s largest such event. Held this year in Dearborn, Mich., the event continues today and tomorrow.

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