Auto Service World
Feature   August 1, 2004   by Auto Service World

Light trucks hard work great opportunities


There are few who would argue that the emergence of the light truck as many consumers’ vehicle of choice has changed the face of the automotive industry, but the utility of the pickup truck is nothing new to the millions who use them every day in business.

In agricultural communities, for example, the pickup truck has replaced another old standby.

“They used to use a lot of small tractors for things that they use trucks for now,” says Mel Mehling, Birch Auto & Farm Supply, Steinbach, Man. While a tractor used to be a common sight in the front yard of a farm, the pickup has replaced it, and today’s tractors are often too big to fit in the yard anyway, he laughs. Mehling adds that these trucks have become a major point of pride for their owners, in addition to valued tools on the farm.

“The farms use them a lot for small deliveries, and the way they build them, the trucks are more comfortable than most cars. They have to haul stuff and pick up merchandise and they can throw some hay bales in the back. You can’t do that with a car.

“They can do 1001 things with them. It’s almost like an ATV, because it is so flexible. And,” he adds, “they can put farm plates on them, which means they can use purple gas (which isn’t taxed the same) so they can save that way, too.”

The constant use that these trucks get, and the terrain they are asked to traverse, means they can go through parts at a faster rate than the urban user.

“That’s good for us. They are very proud of their units. It is their pride and joy. And they’ll spend $50K plus $20K customizing it. It is unbelievable what they will do.”

Nevertheless, says Mehling, the owners do not lose sight of the real reason they have the truck. The pounding that farm life can produce, combined with the pride the owners take in keeping their rides in perfect condition, spells pay dirt for anyone supplying the right parts.

“If something goes wrong, they fix it. It is part of their pride. This is their residence. Most of the farmers want first-quality stuff. They want the top quality disc pads,” he offers as an example. “If you get a set for $85 and another for $25, 60% will buy the set for $85. They have safety in mind and they like quality stuff.”

The light truck trend at large has not gone unnoticed by the aftermarket. More trucks generally mean more applications, but commonality among the car and truck population for some components has made it difficult on occasion to really understand the impact.

“As we gear up our product offerings, light trucks are as much a consideration as automotive,” says Cameron Young, Canadian national sales manager, Robert Bosch. “We give equal consideration to product availability. There are a lot of parts for other applications that find themselves in those applications. As far as isolating particular applications, there is too much commonality of parts across the spectrum to do that.”

Even in areas such as wiper blades, which used to see only the larger applications going to the light truck market, there has been an increasing degree of crossover.

“It has become an integrated market,” says Young. This integrated market, as he refers to it, still generates growth in areas such as fuel system components–Bosch will be introducing an injector program, drawing on its OE supply experience, in the near future–and of course oxygen sensors, whether in trucks or cars.

“The demand for oxygen sensors continues to ramp up. The aftermarket at the installer level is recognizing that it represents a tremendous opportunity, both for vehicle operation and from a profitability standpoint.”

In a commercial environment, this impact is amplified.

Brian Rassin, group manager, friction, commercial vehicle products for Federal-Mogul Corporation, says it is hard to make sweeping statements about the stresses that commercial use can put on a light truck.

“It really depends on the vocation and duty cycle. Is it being used in the oil field, or over suburban roads delivering flowers? There are a variety of vocations that would of course change the requirements of the vehicle. Nonetheless, just the fact that it is being used in a commercial setting means that there is more wear and tear.”

Aftermarket engineers must take this into consideration. In brake friction, for example, extended use in tough conditions could push conventional friction materials beyond their comfort zone, so materials must be developed that can handle the conditions.

“We offer several different grades of friction and for [commercial vehicle] applications have a Severe Duty grade in our Wagner Brake Products brand,” he offers by way of example. “It is tailored to the particular application. You would not put this on your grandmother’s Escort. It wants to run hard and hot.”

How hot? While specific temperature ranges can, again, differ by application and usage, the range of temperatures that a severe duty pad must operate at can be as much as twice that of conventional usage applications.

“In a high braking application, you could reach 900-1400 degrees F. You can run up the temperatures quite high, whereas in normal driving you are only at 400 or so degrees.”

And it is not just about being able to avoid meltdown; the extreme braking forces at play on one-ton and three-quarter ton pickups can literally tear a pad from its backing plate.

“We are cognizant of the shear issue,” he says. “Because of the high torque and high temperatures, this is one of the biggest concerns of commercial vehicle operators.”

To prevent this, special backing plates have been developed to mechanically affix the friction to the steel in addition to being integrally moulded. Rivets are still the method of choice for brake shoes in these applications, and for the same shear-resistant capabilities.

“Everybody has their own specific version, but they are special backing plates that increase adhesion of the friction materials to it.”

Likewise, chassis parts can find themselves pushed beyond the limits normally found by the average consumer. Ball joints engineered for the aftermarket, for example, have a higher load carrying capacity than the original and greater resistance to wear. Premium chassis parts can typically handle impacts and stresses greater than the originally installed parts. There is a limit, however.

“When engineers design the vehicle, they try to lean towards the extreme and build in some safety factor. But people do crazy things. If they are at a point where the steel is touching the ground because they have overloaded the vehicle, there isn’t much you can do.”

Overall, though, Rassin says that the commercial side of the light truck market demands a premium product. The owners and fleets may want a good price, but they need to have their trucks in operating condition.

“Typically they are on a maintenance schedule. To them, downtime is money. They want a part that will last and give them the most miles.”

Regardless of the use of light trucks, it is a market that has been of considerable benefit to the aftermarket.

“I don’t think it has matured by any stretch,” says Rob Tribe, chairman of the Suppliers Council of the Automotive Industries Association of Canada, and the general manager, sales & marketing for NGK Spark Plugs Canada Ltd.

“It is still a growth market for sure, but our trends in Canada are quite a bit different from those in the U.S.,” he cautions. “The U.S. has seen a heavy growth market in the large SUV, which is still growing in Canada, but the mini or small light truck has grown a lot faster in Canada.

Getting inventories right is always a tough issue.

“I guess we’re just too damn cheap, or maybe we understand the cost of gasoline,” he says. “I was with customers in Alberta who said that a year ago you couldn’t find the big crew cab vehicle on the lots, because there was such demand in the U.S. Now you can go to lots all over and find them new.

“A year ago, they were paying people to drive cars so that they could sell them as demos. They were actually paying people to drive them. Today they are sitting on the lot becaus
e the market has slowed down. I am not an economist by any means, but that is what I am hearing.”

Of course, regionalism has always defined Canada, and when it comes to what we drive, it is no different. What is selling in Ontario is not the same as what is needed in Alberta, which differs from the East Coast and Quebec, too. Getting inventories right is always a tough issue.

“Are we getting the right parts? I think there is a lack of parts for the vehicles. I don’t think the aftermarket parts have addressed the market.”

He points out that many trucks are employing more technology than cars these days. Drivetrain systems are more sophisticated due to the increased use of 4WD systems, and specific technologies for trucks have raised the bar even higher.

What is selling in Ontario is not the same as what is needed in Alberta.

He says that systems such as Delphi’s QuadraSteer promise to be both a challenge and an opportunity for the aftermarket.

“So there are definitely more parts to be repaired, and trucks last longer, so they are out there longer for us to sell parts to,” says Tribe.

The whole issue of technology, trucks, and the proliferation of offerings from automakers is quite possibly the greatest challenge facing the aftermarket in the years ahead, especially when you consider that the light truck boom the aftermarket must gear up for, has already passed at the new vehicle level.

“The boom in the light truck market reached its peak in Canada five years ago,” says noted researcher Dennis DesRosiers, DesRosiers Automotive Consultants. “And they have underperformed passenger car sales in Canada. They are consistently at 45% of the market, while in the U.S., it is at 55% and continues to grow.”

The truck boom in Canada, he says, has tailed off.

“This is posing one of the problems for the aftermarket,” he says. “Most of the multinationals are trying to bring in light truck programs [from the U.S.] and they aren’t having the same upside with them in Canada. That is simply because Canadians never bought the light trucks the same way as in the U.S.”

This difference is especially acute when considering early boom model years, but, he adds, when expectations are based on a different vehicle population–with the U.S. tending to the larger SUVs–the outcome is predictable.

“A number of companies have great truck programs for their aftermarket business based on the U.S. population. They are finding general disappointment because they tend to be geared to the bigger units.

Interestingly, where the U.S. experience is applicable is the venerable pickup truck.

“Pickup trucks in both places are similar and their commercial use in each country”–more than 75%–“is nearly identical.

“We’re reasonably positive on the aftermarket for light trucks, because units in operation tend to grow. Light trucks have utility as they get older. As a result they are kept around for a long time, as opposed to passenger cars which when they get old, don’t have utility and get scrapped.”

Of trucks over ten years old, he offers, 58% are still on the road. This compares to only 41% of passenger cars over 10 years old that are still on the road. This means that the aftermarket can look forward to seeing the same trucks for quite some time.

“And so the aftemarket for older light trucks is huge–it is probably the fastest growing part of the aftermarket.”

Differing Factory Equipment Distinguishes Trucks

Trucks aren’t cars, even if people often use them the same.

A quick glance at some key build data, courtesy of DesRosiers Automotive Consultants, reveals some surprising data regarding how these two categories compare in terms of vehicle systems.

Take special note of both the engines installed, which should not be a surprise, and the prevalence of ABS, which might raise a few eyebrows, until you remember that Rear-Wheel Anti-Lock brake systems were introduced very early into the light truck market.

Factory Installation Rates – 2002

DOMESTIC CARSDOMESTIC TRUCKS
Automatic Transmission92%95%
Air Conditioning99%98%
4 Cylinder Engine49%6%
6 Cylinder Engine43%52%
8 Cylinder Engine8%42%
4-Wheel Drive2%46%
Electronic Suspension4%1%
Traction Control33%12%
ABS62%83%
Anti-Theft Device52%57%
Digital Displays6%1%
Navigation System9%1%
Source: DesRosiers Automotive Consultants

Parts Proliferation Hard to Handle

As in virtually every other sector of the aftermarket, the increasing variety of build parameters and components on the light truck is going to increase pressure on the SKU count to maintain coverage and order fill rates.

Over the next few years, it is just going to get tougher and tougher as new model introductions explode.

Over the next three years, automakers expect to introduce 186 new vehicle models. According to researcher Dennis DesRosiers, the light truck category will dominate these new models.

The difficulty with much of this is that with so much crossover in applications and the disparity between what the U.S. is experiencing in light truck popularity versus the Canadian experience, how do you know whether you’re doing well?

“In the final analysis, since it would be very difficult to anticipate sales, what you rely on are historical sales. So you look at what the U.S. is doing; that may give you some indication of what you can anticipate in Canada,” says Ron Strain, program manager, chassis products, Brake Parts Canada Inc. “You have to apply some common sense.”

Even better, he says, is to go with your own experience. Have a look at your trading area and order accordingly.

“If I am able to get hold of what the popular parts are on a national basis, and compare that to what I am selling and there is a correlation there, I might think I am doing okay. If on the other hand, I am way off, maybe I want to look a bit deeper. There may be some opportunities that I am not taking advantage of.”

In any case, he says, it is an imperfect system.

“It is not super scientific, but it is still good to have a barometer to know if you are on the right track, missing an opportunity, or if you are not preparing for the future. Rising parts may get your attention, but it is important to know which ones are declining, too.

“You have to apply the Jeopardy rule: the winner isn’t the guy with the answers as much as it is the guy who knows how to ask the question. Am I headed in the right direction? Am I preparing for things that are changing in the marketplace?

“Whatever answers you get, take them and apply them, and for God’s sake trust your own instincts. Nobody will know your market better than you.”


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