Mythbusting for the Aftermarket

Few myths are greater than that the professional service provider won’t take training.

What they won’t do is put up with poor training and actions that won’t move their business forward, according to a panel of shop owners at the Global Automotive Aftermarket Symposium.

The 11th Annual Global Automotive Aftermarket Symposium attracted four hundred leading automotive aftermarket executives to Dearborn, Mich. for a day and a half of presentations on the theme of “Thriving in a World of Change.”

John Cochrane, owner of Cochrane Automotive in Toronto, says that the shop owner understands perfectly well that it is his responsibility to train his people.

“But our experience with much of the aftermarket training is that they are infomercials. Technicians will come once, they will come twice, but they won’t come a third time. People want to know how to fix cars,” he told the Global Automotive Aftermarket Symposium as part of a panel of service providers.

An important part of this is a focus on management training.

“It’s critical. One of the numbers I hear this morning is that efficiency in the aftermarket is 60%. Fortunately our ASA members are higher than that, because at 60% you’re out of business; you just don’t know it yet,” says Denny Kahler of Kahler’s Werkstatt in Dublin, Calif. “The education needs to be there.”

“We have been seeing a real increase in management training from suppliers. Most of our businesses were started by technicians who were good at working on cars. We learned very quickly that if you didn’t know how to run a business, it didn’t matter how well you could fix a car,” says Betty Jo Young, Young’s Automotive Center, Houston, Tex.

This training issue goes right to the core of the shortage of competent technicians.

“A lot of the older folks are getting to the point where they are retiring. They have the talent and wisdom to deal with the sophisticated cars of today. The new people have the schooling, but they don’t have the talent and the wisdom to deal with these cars,” says Kahler.

One of the other myths presented at the symposium was that service providers can’t make money on preventative maintenance. Part of that new reality is changing the way shops see their role; no longer can they rely on vehicles being towed to their shop for business. Preventative maintenance has taken on a whole new role in today’s market.

“The first person I have to sell [on preventative maintenance] is myself,” says Young. “If my customer breaks down, I have failed him.”

“The car dealers are eating our lunch in the maintenance business,” says Cochrane. “We must get into it. I do some counselling and calculate how often the shops should be doing transmission services, fuel system services, and they are just not doing them.”

“Technicians used to think that maintenance was beneath them,” says Young. “We need to convince them that it is a money-maker.”

Of course, that all hinges on the repair facility being attractive to the customer.

“We have an octagon-shaped counter in the middle of the waiting room where our service advisers work. And we have a large-screen TV that is constantly reminding the customer of the benefits of preventative maintenance,” says Aaron Clements, C & C Automotive, Augusta, Ga.

“I believe it starts right from the street, the landscaping, the cars in the parking lot,” says Kahler. He adds that he is confident in the long-term success of the very best shops, but is concerned about the future prospects of those shops at the bottom of the scale in terms of profitability and image.

“What we need to do is get those shops at the bottom at least up to the middle.”

Talk Is Cheap–So Why Not Talk?

Of great concern to professional shop owners and their technicians is the quality of the products they install, and by extension that has an effect on the quality of their relationship with their key suppliers.

The panel of shop owners spent a fair amount of time discussing product supply and brands, but at the core of the discussion is that it is vital to a jobber’s relationship with his customers to keep them informed.

If there is a change in lines or brands, let them know. Do not substitute brands without their knowledge or an explanation. Do not change lines without a discussion in advance of the change.

The same is true on policies and procedures. If you want the loyalty of your professional customer, the panellists told jobbers in general, make sure that you respect their right to know what they are buying.

Don’t Ask Government to Protect You from China, says Leading Economist

Only 27 years ago, China’s per capita income was about the same as it was in year one A.D. That has all changed, says economist and Dallas Federal Reserve Bank executive Michael Cox.

The rapid upswing in earnings has the People’s Republic trending upward almost vertically over the past three decades.

“Now, of course, they are starting to get into auto production,” says Fox, who kicked off the Global Automotive Aftermarket Symposium presentations.

For China, he says, the growth is obvious simply by opening the curtains in a Shanghai hotel room and looking out the window. Building is going on at a breakneck pace. Two 35-storey buildings are completed every week, and the building plan is committed to doing this for at least the next six years.

In industry, China’s growth encompasses more than automotive, but it is focused on manufacturing.

Only about 11% of the American labour force is employed in the manufacturing sector; by comparison, China moved 100 million of its people into manufacturing in the last decade.

But China is not the only challenge ahead. While it is developing as a manufacturing nation, India is developing as a service industry nation.

“They come out number-one as an outsourcing centre,” says Cox. India is involved in accounting, translations, form processing, content management, and e-learning.

“So China and India are vying to be the new world leaders. Add in a few eastern European nations entering the economy and you have about 3 billion New World capitalists in the world.”

He says that this is guaranteed to have an unsettling effect. The opening of new markets, both foreign and domestic, revolutionizes the international economic structure–replacing the old one with an entirely new model. It upsets all the cost calculations, all production functions, and practically every way of doing things.

Currently, about 80% of Americans work in the service industry.

“Right now, if you look at where China works, it has a labour force right about where the American labour force was in 1882. India is where we were in 1942.

“But it will take them much less time to move people. It looks like India and China are catching up, but then [post-war] Japan and Germany looked like they were going to catch up, but never did.

“Still, China and India are definitely making faster growth. How we stay ahead is the challenge. What do we do? What we do not do is think of them as the enemy.”

He says that turning to the government for protection doesn’t work; it only fosters lack of competitiveness.

“That is what has happened to Japan. [Japan] tried to fight competition by protecting its own industry. Even the rhetoric of protectionism is dangerous, because it stands in the way of innovation.

“Talking people into buying American products is not as good as simply getting them to buy an American product because it is the best one.”

Case in point: the rise of the imported luxury car.

In 1981, the average price of a car sold in the U.S., including both imports and domestics, was about $9,000. By 2001, this had risen to $19,000 for domestic makes, but had mushroomed to $27,000 for imports.

“So you don’t solve the problem by trying to legislate it away. Competing makes us stronger. So what do we do? Simply make the best product.”