Market Feature: Supplier Services Becoming More Critical to Success In Starting and Charging Market

As with most under-the-hood products, the market for replacement starting and charging parts and components is becoming more and more demanding for jobbers to serve effectively. Ever-increasing technological complexity, significant parts proliferation, and the demand for high quality and strong after-sales service are some of the factors influencing sales in this product category.

Cameron Young, sales and marketing manager at Robert Bosch, comments that although weather factors in Canada have traditionally been one of the drivers of demand for charging and starting system replacement parts, this is becoming less of a factor with the generally milder winters of recent years. The age of the fleet and automotive under-the-hood technology are now bigger market drivers.

“There is greater demand on the units of today – they work harder, and also the vehicles tend to last longer, which extends the service life requirements of alternators and starters,” Young says.

He adds that there are cost savings advantages of a minimum of 30% on remanufactured versus OE, but that with rebuilt there will always be a cores issue, particularly with newer applications. “Having a tie-in to an OE supplier such as Bosch for complete units and components is a key consideration,” Young says.

On the technology side of the equation, Young says that higher-amperage alternators are becoming more common, as the output demand on units rises with the constantly increasing accessorization of today’s vehicles. In addition, the weight and size of starters and alternators is being reduced constantly, and that keeping units cool, in particular with alternators, becomes a key factor in ensuring longevity of the units. This has led to some OE designs now being water-cooled.

According to leading researcher Frost & Sullivan, driving habits are wearing out starting and charging components at record pace.

Car owners are using their vehicles for shorter and more frequent trips, increasing aftermarket demand for starters and alternators.

The North American starter and alternator aftermarket reached an estimated $1.48 billion U.S. in 2000, according to Frost & Sullivan, and this is expected to increase to $1.66 billion by 2007.

“With vehicles becoming more complex to repair, the ‘do it-for-me’ market has grown,” says Frost & Sullivan industry analyst Matt Vestervelt. “To best serve their customers and minimize bounce-back replacement work, professional installers are demanding remanufactured alternators and starters of the highest quality.”

Factors such as these are leading to changes in the DIY market share for these products, although, Young says, “There will always be a DIY market for starters and alternators. The complexity of engine components in today’s vehicles is making it exceedingly difficult for an unskilled consumer to tackle a replacement. As always, the older a vehicle, the easier to DIY.”

In discussing merchandising of alternators and starters, Young emphasizes the benefits of support from suppliers such as Bosch. “We offer a 24-month roadside assistance program, the Bosch Ultimate Protection Plan, which offers the end-user the opportunity for a free tow or boost should they have any problems with a Bosch starter or alternator within 24 months of installation. This is a huge selling feature for the jobber to the installer. In addition, we offer counter mats, trade and consumer brochures that cover features and benefits of Bosch remanufactured starters and alternators. An informed consumer and installer is a confident consumer and installer.”

The importance of strong supplier support is one of the key factors in successfully selling charging and starting systems, according to Tullio Lattanzio of Armature DNS 2000 Inc. “Rebuilds are still very strong in this market; their availability is good and the quality is excellent. One of the things we do is to offer very strong technical support – we consider this a very important aspect of our service. We try to make using our products as easy and as trouble free as possible. We have a 1-800 number for assistance with problems, and we can send someone out to help the jobber or his installer with a problem. Our approach is to fix the problem on the unit sold. In short, just call us and we’ll fix the problem.”

Obviously, there will be less need to fix problems if there is good quality in the units. “We have to have a certain level of quality and we know how these units should be built to avoid problems. We give feedback to the people who supply us and they are listening to our advice on how these units should be built. In addition, for quality control purposes, we re-test everything.”

Speaking about parts coverage, Lattanzio says, “All of my jobbers have very good coverage. Our catalogue has detailed stocking recommendations to help jobbers with SKU decisions. Our overall concept is to keep the jobber’s investment in inventory as low as possible while still maintaining good parts coverage for his customers. The future, in terms of parts numbers, will be interesting because every year the OE companies are changing the alternators and starters with new designs and more parts, resulting in more SKUs.”

Eric Surkari of Mister Starter Auto Electric says, “All of this is designed to take business to the dealer network. Any semblance of parts universality has disappeared and it has been planned that way. The three Rs of remanufacturing, recycling, and reusing are getting very difficult to do.”

Bolstering this statement is a discussion paper by Rick Hammond, Tony Amezquita, and Bert Bras of the Georgia Institute of Technology, titled Issues in the Automotive Parts Remanufacturing Industry – A Discussion of Results from Surveys Performed Among Remanufacturers. The paper discusses parts proliferation as a major issue facing remanufacturers and describes parts proliferation as “…the practice of original equipment manufacturers’ producing multiple unique models of the same part for a given car line, or by changing aspects of the part (making it unique) on a frequent basis – perhaps even more than once per model year.”

Jeff Lewicki of Wilson Auto Electric says there are a number of factors influencing the market for replacement starters and alternators, including vehicle population, the age of the vehicle, parts proliferation, competitive pricing, inferior OEM design, and the fact that the do-it-yourself market is not skilled enough to install the newer types of electrical products.

He says there are a number of advantages with rebuilt units in this category. One of these is their price point advantage. In addition, rebuilt units are readily available. From a quality perspective, Lewicki notes that the remanufacturer can make modifications to the units to make them last longer by addressing OEM design flaws in original units. Lewicki says that in terms of sales of OE versus rebuilt, “We believe that less than 10% are OEM aftermarket sales once the vehicle is off warranty.”

He sees the DIY market suffering in this product category. “Due to changes in design, it has become very difficult to work late model vehicles. The starters and alternators are usually not as accessible as they were in the past. In order to be able to change the electrical units in vehicles now, specialty tools are needed.” Lewicki adds, “There have been many changes technologically in the past five years. Alternators have changed with the introduction of computers on cars. The alternators now run more efficiently, pushing out higher amperage.”

According to the 2001 Car Maintenance In Canada Report, mechanics installed 62% of the alternators and generators that were replaced on passenger cars and light trucks in Canada during the 12-month period from January 2000 to December 2000. Do-it-yourselfers replaced the remaining 38%. Compared to other product categories analyzed in the report, alternators and generators had a below-average rate of mechanic installation.

However, statistics in the report also indicate that the DIY share was greatest in the older, less technically complex vehicles, with a DIY rate of
39% for vehicles in the eight to 12-year-old category and a rate of 48% in the over 12-year-old vehicle category. In the four-to-five-year-old category, it is only one percent and is just 12% in the six-to-seven-year-old category.

With the ever-growing complexity of starting and charging systems, technical knowledge is becoming increasingly important in this product category. Dixie Electric Limited has a Tech Tips and Suggestions section on its website (www.dixie-electric.com) which can help jobbers, their counterpeople, and technician customers with solutions for alternator and starter problems.

One of the sections in this area of the Dixie website is a chart for calculating alternator load, which lists virtually all of the normal components of a vehicle drawing current and listing the load in amps for each. The chart does not include any aftermarket accessories such as high-output stereo systems, but this should certainly be considered when replacing a unit on a highly accessorized vehicle.

Another detailed section on alternator and starter troubleshooting lists a number of symptoms, the probable or possible cause of each symptom, and a number of remedies to rectify the problem. For example, eight causes for a no-crank condition alone are listed, along with solutions.

Noting that today there is a rapid development of automotive electronic components, the website advises, “Through its technical department, and in conjunction with its distributor network, Dixie provides services to encompass technical and product information, professional training, specialized diagnostic test equipment, and field technical services.”

While the starting and charging market has its roots in the very early days of the automotive aftermarket, subtle changes–and some not so subtle changes such as the use of water-cooled alternators and nearly hidden starters–have changed the market in some important ways. This requires that everyone involved in keeping Canadians’ cars starting and charging through the cold winter months take advantage of all the resources available.

For jobbers faced with some difficult challenges in this market, it is useful to remember that they need not tackle them alone.

Power Demands Increasing

The trend to higher output demands on the charging system is noted in a report from Exide Technologies, which says, “The demand for the electrical power provided by batteries is increasing. According to automotive experts, today’s large cars can use as much as two kilowatts of power. By 2005, that number is projected to grow to as much as 3.5 kilowatts. This is because today’s vehicles – from passenger cars to heavy-duty trucks – are equipped with more and more electronic equipment to enhance vehicle performance, comfort, and safety.” The report lists some of the components producing greater power demand:

Electric power steering (EPS)

Electromechanical brakes (EMB)

Electromagnetic valve operation (EMV)

Advanced electrically controlled heating and air conditioning systems

On-board communications components

Comfort and entertainment features such as TV, video playback units, custom heated and cooled seats