Auto Service World
Feature   March 1, 2001   by Auto Service World

MARKET FEATURE: Making Chemicals Work for You

Whether you're able to capitalize on emissions testing programs or not, underhood performance chemicals can be an opportunity. Understanding local conditions is key.

Chemicals treatments that work to improve engine performance come in many forms, but they all share one common characteristic: they can only help improve performance, they can’t fix what’s truly broken. This applies to both the vehicle’s systems and your overall chemicals business.

The fact is that while some jobbers have seen solid chemicals sales with promising growth as a result of mandatory emissions testing programs like Ontario’s Drive Clean–which has just expanded to a dozen new communities in what is termed “Phase II”– those who have not heretofore been very successful in that product category are not seeing the benefits. The successes are highly regional.

“In some areas we’re selling a little more of the emission products,” offers Wayne Coutts, automotive sales manager for UAP/NAPA associate Ideal Supply Company Limited in Listowel, Ont. “It hasn’t really spiked, but we have noticed a little more action.” The multi-branch organization has outlets in the Phase II region of the Drive Clean emissions program, as well as branches outside the program area. Coutts credits the success they have had with taking an aggressive approach. “We took the bull by the horns and put a few programs out to promote it. The result is that we sold more in February than in all of last year.” Nevertheless, he cautions that the numbers are still not huge and says that there has to be a certain predisposition to using emissions chemicals.

“We ran a program (that offered customers sports art prints), but the interest has to be there in the first place. It sold mainly, but not exclusively, in the areas that are in Phase II.”

“Some people believe in them, some people don’t,” says Matt Collee, owner of Collee Automotive Supplies Ltd., an Auto Value associate in Niagara Falls, Ont., also in the Drive Clean Phase II area. “Especially with the new emissions, everybody is trying this and that. We’re selling a lot more treatments now, but some of them are guaranteed to pass and it’s just not happening. You can’t put something in the gas and expect it to stop the oil from burning. Some people don’t understand that.”

He says that his market area has seen most of these chemicals sold directly to consumers.

“At one time we moved a lot of fuel rail chemicals and that’s really slowed down. It has really fallen off,” says Collee, though he is at a loss to explain why. “The only time they’re using it now is if there’s a serious problem,” adding that by then it’s probably too late. “If they would put it in before the problem, it would keep it away.”

Collee says he has a fair-sized showroom and that chemicals are the dominant category on display. “You have to keep showing it. If it’s there on the top shelf and displayed nicely, people will buy it.” He says that experience has taught him that this is true and that it is critically important to have clear prices displayed.

“If they have to ask for the price, they’re not going to buy it. They don’t want to get to the counter and find out that it’s five bucks more than they want to pay.”

By way of contrast, Roland Dempster, president of Dempster’s Automotive Supplies Inc., in Barrie, Ont., says that although there has been a positive effect on his business in terms of emissions components sales, he hasn’t seen much in the way of a positive effect on chemical sales. But then he doesn’t see much in the way of chemical sales anyway.

“I don’t know what the particular reason is. We don’t do a heck of a lot in chemical sales. It doesn’t seem to be a great player for us.” He says that at least part of the issue with his store is location. “We probably have only about 10% walk-in business. We’re not really in a retail location.”

Additionally, says his son Greg, who spends most of his days on the road for the company as a salesman, the competition for chemical business is fierce.

“There are a lot of wagon peddlers in town. They’re making 10% margins and they come and go. Some of them are in cube vans that don’t even have names on them, they come and go so fast.”

Even so, says Greg Dempster, belief in the effectiveness of products is a significant barrier. “A lot of guys don’t believe in it. There are some products out there that you really wonder about.”

Phil Knoblauch, manager of the Carquest store in Windsor, Ont., concurs that Drive Clean itself hasn’t had much of an effect. “But we get a fair amount of walk-in because there are a lot of factories around us. We do get a lot of medium duty industrial business.” Knoblauch says that most of the garages have gravitated toward mechanical work. Many of the repair shops have only dabbled in fuel system service. He admits that this must change.

“They’ll either have to get right into it or get right out of it.”

Jim Davenport, store manager of Auto Sense shareholder Gord Davenport Auto-motive, based in Orangeville, Ont., says that preventative maintenance has really taken hold in most of the markets the company’s branches serve.

“What has taken off is the injector cleaners and the air intake cleaners. But the garages up here are telling people ahead of time.” Largely mechanic installed, the chemical service business–and the tune-up parts business overall–has been on a strong upswing, though failures are low because of preventative maintenance promoted by the installers.

In addition, the cold and changeable weather has played an important role in other chemical sales.

“We’re starting sell more of a variety. Cleaners, water pump lubes, diesel fuel conditioner.” He said that industrial customers have been big users, as have some fleets. “One fleet customer purchased 3,500 cans of glass cleaner last year.” He says that his company also has a customer in a construction firm that purchases large amounts of penetrating oil. “So much that I wonder if they’re drinking it,” he jokes.

Even with such promising potential, variation is the rule rather than exception. Some of the company’s branches do well with chemicals, others do not. And even within the overall sales, popularity of individual products varies widely.

“In certain areas they may hardly sell any, but others are very busy. Certain areas are big chemical users and certain areas aren’t. They are just different industries.”

Understanding those differences, and the specifics of those differences, can go a long way to helping you maximize your chemical sales to the consumer, the installer and a wide variety of other potential customers.

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