Import OE Designs Lighter Parts, Shorter Life

hallenged by the increasingly tough CAFE (Corporate Average Fuel Economy) standards for better fuel efficiency, import OEs are focusing more and more on light-weighting vehicles by using lighter and more modular component designs. As a result, many of these new components are proving to have a much shorter lifespan and require replacement on a much more frequent basis. This is proving to be both a blessing and curse for the automotive aftermarket.
“The import plate market has had a huge influence on car mix and parts sales, no question, with over 60% of the SKUS now for import vehicles,” says Mevotech VP sales and marketing Scott Stone. “It’s not just imports that are impacting this market, though. All vehicles are now going through what we call light-weighting, to reduce the weight in the vehicle in order for the OEs to hit their CAFE targets. And as a result, we frankly see a lot more fragile-type designs in suspension parts and chassis parts than we have ever seen before, which is, in effect, increasing the repair cycle.”
Adds John Thody, president of XRF Chassis, “When you have small-displacement engines running relatively high rpm to get the power, you need lighter vehicles to ensure performance. We see all kinds of good design coming in with the imports, but the bad news is when these parts wear out it’s a big bill.”
Mark Boyle, director, steering and suspension, North America, Federal-Mogul Motorparts/Moog Steering and Suspension, says, “We’ve seen significant growth in demand for foreign nameplate applications over a period of several years and expect this shift to continue. Moog has introduced more than 2,500 additional parts for foreign-nameplate applications in the past few years. In addition, we segmented our line for these applications with our Moog Asia-Spec and Euro-Spec packaging to help jobbers and repair businesses better address the foreign-nameplate opportunity.
“It wasn’t too many years ago that most repairs on these vehicles were performed either by vehicle dealers or nameplate-specific specialists. As we all know, most repair businesses have made significant progress in attracting these consumers and are now servicing all makes and models,” explains Boyle.
It’s also important to note that while foreign nameplates continue to grow as a percentage of the overall vehicle population, domestic light trucks and SUVs continue to dominate the steering and suspension category. Because these vehicles typically carry heavier loads and are often operated in more challenging environments, they generally wear out steering and suspension parts at a faster rate. So while the foreign nameplate category is indeed growing, the domestic category remains very strong on a unit and dollar basis due to the popularity of trucks and SUVs.
The speed that OEMs now cycle through their model generations is making it even more challenging for aftermarket manufacturers to recognize what’s new and what’s driving the business.
“It’s tough. We have fulltime people looking at new platforms, trying to dissect new OE part numbers, and see if it’s a part number we already have or whether we are on to a new SKU and a new development. It’s a big challenge, but it’s a challenge that our company accepts. It doesn’t come easy and for those who are just trying to be followers, frankly they are just going to be left behind. You have to get out in front of it to understand the OE world and be all over it every day,” explains Stone. “Mevotech is a company that has taken a leadership role for all makes and all models. But not everyone in this category has done that.”
“It’s a challenge getting our hands on the new models,” agrees Thody. “When we get the new parts we have to quickly determine where the weak parts are, so those parts go on the cycle tester to establish some kind of wear patterns. We generate 400 parts a year, so it’s a lot of money to invest in tooling before you even sell one part.”
“Keeping pace with new vehicle technologies is one of the most important roles at Federal-Mogul and Moog. We leverage our extensive global OE engineering insight as well as our technical support hotline, training team, and field specialists to track emerging service demands and develop and introduce parts that address these opportunities. Federal-Mogul Motorparts now operates a fleet of Mobile Training Vans that visit hundreds of shop locations each week. We not only help these customers understand the unique benefits of Moog and other Federal-Mogul premium parts, but we gain tremendous insight into the repair challenges they encounter each day. All of this insight is channelled to our engineering team based in the Moog brand’s product technology facility in St. Louis,” explains Boyle.
“Moog has introduced hundreds of new parts through the first six months of 2014 alone, and we continue to invest in the coverage our trade partners need to grow their steering and suspension businesses,” he adds.
“Along with parts proliferation, I think one of the other things that probably challenges this category is nomenclature – I call it this, you call it that, the OE calls it this, and we are all actually talking about the same part,” says Stone.
“That is always a challenge. And that is why you see a lot of companies, including ourselves, putting a lot more managing into online catalogues and including features and benefits, drawings and information that will help jobbers say, okay, you are calling it that but do we agree that this is what it is? We see a lot of that happening,” he adds.
“For everyone to be all things to all people is almost impossible now,” says Thody. “As we broaden residual inventories in the distributors’ stores, that’s good for us but it’s getting tougher for the smaller jobbers, who can’t make the investment in the inventory they require to remain competitive.”
For jobbers, a pricing strategy can be challenging to deal with. “From my standpoint, we see this trend towards more fragile designs, so we have made a conscious effort to step up and say we will be a manufacturer that provides, on our premium side, a solution that is better than OE,” explains Stone. “To most consumers and the installers that are dealing with the consumers, they have so much to deal with on the new vehicles that if they can find a better part that is going to make that vehicle last longer from a suspension standpoint and from a wear standpoint, they seem to gobble it up.”
Premium branded parts provide the safety, performance and reliability the vehicle owner expects. Those three key benefits – safety, performance, and reliability – represent a very compelling message for all parties and should be part of every counterperson’s sales presentation.
“In our mix, about 85% of what we sell is on the premium side. It’s by far, and continues to be, the preferred choice. When you lay the two parts on the table side by side, they both fit the vehicle, but they just continue to grab for the premium-designed component all the time. Frankly it makes more sense. For the dollars and percentage difference in the whole scheme of things, it’s really a no-brainer,” adds Stone.
“Sure it can be as much as a 30% difference, but in the scheme of the whole deal it’s worth it when you consider the cost of bringing your vehicle back a year later and tearing it all down to do it again, versus putting an extra $25 in and see you in five years,” he adds.
“Assemblies were developed in the replacement market to help the service provider reduce the time, and often the cost, required to perform a complete, high-quality repair. Examples of this approach are control arm assemblies – which eliminate the need to press i
n a new ball joint and ensure that the customer will receive all new parts for a longer lasting repair – and complete strut assemblies, which can dramatically simplify and speed the strut replacement process. Each of these part categories is experiencing double-digit growth, which demonstrates the value they offer to the professional technician and their customer,” adds Boyle.
“Our premium Moog Problem Solver parts have experienced significant growth in recent months, largely due to the severe winter. We’ve heard from many jobbers and service providers that the harsh conditions really helped their customers understand the value of premium parts. In some cases, consumers have had lower-quality tie rod ends, control arms, and other components installed just last fall, and they were back for replacement in March. It’s a good bet that they agreed to pay a few dollars more for a premium, longer-lasting, and better-performing part the second time,” Boyle continues.
“I see chassis component designs becoming more complex in the future as OEs continue to focus on lighter, more modular types of designs with just enough integrity to meet the warranty because they have to meet the CAFE restrictions,” explains Stone. “It’s a lot easier to replace a modular type of component than to mess around with individual tear-down components. It’s over half the business now and it’s just going to continue to escalate.”
“We will continue to see a lot more parts designed in a modular way,” agrees Thody. “Not only in the front end but in brakes and in suspension as well.”
“Chassis and suspension components are becoming even more of a market as the new, lighter designs come out with a shorter life span, which is paving the way for more robust aftermarket designs that give the buyer a longer performance life. The dollar percentage that suspension parts play in a jobber mix is definitely on the upswing as they now require replacement on a more regular basis,” concludes Stone.
Whenever a customer asks you why your price is so high, respond by advising them they are asking the wrong question. They should be asking, “Why is the other price so low? What aren’t you getting in that deal?” The sales pendulum is on the upswing and quality counts once again.