Over the Counter June 2006

U.S. Aftermarket Growth Strong in 2006, Predicts Study

The U.S. light vehicle automotive aftermarket industry is expected to grow by 4.2% in 2006, according to new research from the Automotive Aftermarket Suppliers Association (AASA).

A detailed analysis of the size of the aftermarket is included in the soon-to-be-released 2006-2007 AASA Automotive Aftermarket Status Report.

According to AASA, the value of the light vehicle aftermarket (parts and labour) broke the U.S.$200 billion mark for the first time ever in 2005, finishing at $200.41 billion, a 5.2% increase from 2004. (All figures in U.S. dollars.)

The jump was the highest the industry has experienced since a 5.6% increase in 2000. If you include the $54.5 billion heavy-duty aftermarket (Class 6 through 8), the total U.S. aftermarket is $255 billion, a 5.1% increase over 2004.

AASA estimates that the light vehicle aftermarket will finish 2006 at nearly $209 billion U.S. Growth will continue at a somewhat slower pace and reach $239 billion by the end of the decade, says the study.

While the study focuses on the U.S. aftermarket, experience has shown that many trends are mirrored in the Canadian aftermarket.

In the study, vehicles more than 10 years old account for the largest share of the dollars spent and provided the largest boost to 2005 overall aftermarket value. This category, along with the 6- to 10-year-old vehicle group, is expected to continue to expand at a stable pace, while new to 5-year-old vehicles are projected to decline in aftermarket volume through to 2010.

Quality of People in Aftermarket Will Assure Industry’s Success, says Retiring Bosch Executive

On the eve of his retirement from Robert Bosch, 40-year aftermarket veteran Lou Bauldic says he retains his faith in the people of the aftermarket to overcome the challenges the industry faces.

Bauldic has worked at every level of the aftermarket and retires as vice-president, general manager, automotive for Robert Bosch Inc. in Canada.

He says that there are serious challenges such as increased competition from the dealer network, and the fact that many components on a vehicle last much longer than they did in the past–he points out that alternators and starters are designed to endure three to four times the usage of those only 15 years ago–that will all try the patience of many business leaders.

And many changes will combine to make the small, single-store jobber’s prospects grim, given the inventory investment required for adequate coverage. At the same time, many in the aftermarket do not address lost sales as seriously as they might.

“Who cares what kind of car it is? If there is a demand for it, you have to take care of the demand. Let’s say there is a call for something for a new hybrid. Where are they going to tell them to go? Back to the dealer? We are feeding the erosion by not addressing it.”

Like it or not, increasing financial pressures on the aftermarket will force change, but he believes there is enough human capital to navigate those changes.

“This industry is loaded with an assortment of incredible people. These people will make the right changes. [In the future,] the aftermarket will not look like it does today. There will be fewer outfits, much larger outfits, and a lot more business training.

“I couldn’t say enough about the people in the industry. There is a wealth of first class people in the industry. Although the fundamentals change and the business will change, the industry will survive.”

Courtney Hansen to Headline CarFixWorld

CarFixWorld has signed Courtney Hansen, host of Spike TV’s Power Block, to headline events on Saturday.

Hansen, who was co-host of The Learning Channel’s “Overhaulin'” for three seasons, has roots in racing that run deep. Growing up in Orono, Minnesota, her father was racer Jerry Hansen, who won a number of SCCA titles, and her family owned Brainerd International Raceway.

She has been a spokesperson for Dodge and Rolls Royce and holds a wrench with authority. Her marketing skills (she earned her BA at Florida State) and love of cars are just a beginning. Courtney was also named one of FHM’s 100 Sexiest Women in the World in 2005.

Courtney Hansen headlines CarFixWorld on Saturday, September 30. She will be on hand at 1 p.m. to meet fans, share her enthusiasm for all things automotive, and sign autographs.

Online registration for the entire CarFixWorld event, being held September 29 to October 1 at Toronto’s National Trade Centre, is now available at www.carfixworld.com.

Ideal Supply Holds 80th Anniversary Trade Show

Ideal Supply of Listowel, Ont., held its annual trade show at the Orangeville Fairgrounds in Orangeville, Ont. as always, but this year took the opportunity to also celebrate its 80th anniversary.

Wholly owned by the MacDonald family, Ideal Supply operates two dozen branches in Ontario.

The show attracted an estimated 1,700 customers to some 160 booths.

Notable points of the show include the fact that it caters to the industrial, automation, and lighting industries as well as the automotive aftermarket–Ideal Supply has divisions that cater to those markets–and that it turns the show into a remote branch.

“It is online with our store in Listowel,” says John MacDonald Jr. “So if someone makes an order at, say, 6 p.m., they can have it by 7 a.m. the next day.

“We used to have to fax the orders back to Listowel and input the order there, which delayed things as much as 10 days.”

Obituary

Norm Bethune

Aftermarket veteran Norm Bethune, who recently suffered a stroke, passed away in May.

Bethune had a very distinguished career in the automotive aftermarket in the PBE segment. Bethune was part of the RicRob Agency that dealt predominantly with the PBE Industry. When RicRob merged with Grant Brothers Sales in the mid-eighties, Bethune was hired by GBS.

He left GBS some years later and started his own agency, GR8 Concepts Marketing Inc., and worked representing Tesa Tape and Urethane Supply Co., until the time of his hospitalization after suffering the stroke.

Appointments

Ray Datt, President of the Automotive Industries Association of Canada, has announced a number of staff changes at the association’s Ottawa office. Mireille Schippers, after 18 years with the association, has left to pursue new challenges with the Canadian Association of Professional Engineers. Allison Reynolds has also left to pursue a change in career paths. Therese Santostefano is now senior coordinator, operations and events. Santostefano, who has been with the association for eight years, will be working with Deborah Moynes-Keshen on all events while also overseeing the association’s finances. Heather Burns has been promoted to senior coordinator, membership. In addition, Katherine Power, manager public relations, is moving to Oakville, Ont., with her family and is taking a leave of absence during July and August to settle into her new home. She will be working remotely for the association beginning in September. Patty Kettles has accepted a promotion to manager, sales and marketing. Her new responsibilities include expanding AIA’s sponsorship and sales activities and event management.