Auto Service World
News   May 11, 2005   by Auto Service World

Manufacturers at Leading Edge of Major Issues Affecting Aftermarket Profitability

Manufacturers are facing a host of issues affecting their profitability and the overall profitability of the aftermarket.
A panel of aftermarket manufacturers addressed this and other issues as part of a panel held during the 10th Annual Automotive Aftermarket Symposium in Chicago.
A key issue is the role of the value line within an aftermarket that has relied for so long on the added features of premium brand offerings.
"This is an interesting dilemma," says Joseph Felicelli, executive vice-president, worldwide aftermarket, Federal-Mogul Corporation. "We call them value lines. They have to be products that provide value. There are so many people in this country who don’t have the economic where with all as most of the people in this room. There is a place in this world for the value line. I think they have to be suitable for the purpose for which they are intended.
"We have to careful that we are not trying to misrepresent these in the marketplace."
Dangers in not doing that are great.
"There is a place for value lines but they have to be presented for what they are."
"Value lines have a role to play in keeping cars on the road longer," said Michael Cardone Jr., CEO of Cardone Industries. As technology become even more complex, we are going tot have our hands full."
The panel also dealt with branding issues, the rise of the dealer competitor, counterfeiting, and a host of other issues.
"I believe that the manufacturers in the aftermarket will become very global," said Terry McCormack, CEO of Affinia. Strongly given by cost, but not only cost.
"There are products today that we are producing from the Asian block and we will continue to increase the procurement of those products," said Bruce Zorich, United Components, Inc. "It will end up being a combination [of offshore and domestic production]. All of our manufacturing is not going to go offshore."
Where do the opportunities lie?
"The big opportunity in the supply chain is the elimination of waste," says McCormack. "All through the chain there are areas of waste. We have to find ways of working with our customer base to identify waste and remove it. All of that translates into more profit. It revolves around trust."
"What does a successful supply chain look life for the aftermarket?" asked Cardone. "What does success look like? We are going to have to have a collaborative effort from all segments of the aftermarket if we are going to have that lean supply chain that we are all dreaming of."

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