Thanks to a gradual shift by OE manufacturers in recent years away from semi-metallic and non-asbestos organic (NAO) brakes, the automotive aftermarket has had to adapt to market changes across all levels of distribution — not just in the types of brakes offered but also in the selection among good/better/best lines.
Chuck Pariano, manager of North America aftermarket brake sales for Aisin World Corp. of America, both an OE and aftermarket supplier of Advics brake pads and brake systems, notes that the global market is steadily switching over to ceramics. “From the late ’90s to the early 2000s, more and more passenger cars and light trucks have been moving towards ceramic pads, so their replacement parts are being manufactured [in ceramic] as well,” he says. “Taxicabs, buses, and larger trucks, however, are staying semi-metallic.”
With some estimates that as high as 70% of brake pads coming out of OE are classified as ceramic, the resulting ripple effect can be felt throughout the automotive aftermarket. However, a big problem attributed to ceramic formulations is the misconception that a ceramic pad and a premium-quality pad are one and the same.
Part of this misconception stems from very basic differences between the warehouse distributor and jobber models of distribution, both in terms of shelf space and volume of inventory. A WD can have a warehouse area ranging anywhere from 50,000 sq. ft. to somewhere in the hundreds of thousands. With a jobber operating a business at no more than 5,000-10,000 sq. ft., space comes at a premium. Because WDs buy their parts on a grander scale from various locations — primarily overseas markets — their bottom line for profits is largely commodities-driven, the same way a broker might purchase stocks on the TSX.
“There are damages and concerns that come when you are just going after the price segment of the market, because a lot of times you’re referencing some of the categories that are not typically known as premium,” says Ian Braunstein of Satisfied Brake Products Inc. “For example, there are ceramics that go into the aftermarket that are coming to the distributors as nothing more than a non-asbestos organic pad, but they call it a ceramic and sell it at a price point that creates confusion when it gets to the street — which is like saying, ‘If it comes in ceramic it’s got to be premium.'”
Not to say that this doesn’t happen at the jobber level, but again it comes down to a matter of scale. There’s a big difference between sending out the wrong type of brake pad to an individual service station or garage when compared to, say, a skid’s worth of brake pads that will eventually be in the brake systems of 250 vehicles.
Quality, Not Quantity
In addition to the confusion provided by different formulation types (i. e., ceramics, semi-metallics, and NAO pads) the quality of brake pads stocked across product lines can vary considerably. How does one determine the appropriate inventory when it comes to satisfying your customers in the midst of ever-increasing grades and selection? What can be done?
In most cases, your better line (i. e., premium brake pad) will have the biggest coverage. As far as economy-line brakes go, it’s a good idea to look at at least lesser coverage, just to have that loss-leader approach available. When dealing with your best line, make sure you have significant coverage, though not as deep as the better coverage. When you’re talking about later-model applications, or even very old applications, parts that are hard to get hold of are parts you should stock in your better/best categories — the consumer is ready to pay for the ability to get those parts.
“I believe jobbers have reduced the number of full lines they carry overall, but parts proliferation has increased the size of their inventory,” says Brian Fleming, director of marketing for Affinia Canada ULC. “Jobbers generally carry a complete line of premium as well as opening price-point products and fill in with specialty products (e. g., severe duty, performance) as their distribution area requires.”
Depending on whether you take a platform-specific approach or a vehicle-specific approach, there’s only the need to stock one part per backing plate number. The necessity to stock one part per application rather than having to carry a menu of types with the same plate number can provide you with more space and a reduced inventory.
“We’re typically in the area of 25-30% reduction in SKU count when compared to a traditional model, because on all lines we are also going vehicle-specific,” says Braunstein.
“Because we’re matching material performance to the plate, there’s no need to duplicate for the plate number. That in itself will lead to a natural consolidation in the number of SKUs the jobber has to stock, which will allow him to turn his inventories more, carry less inventory, and improve his gross margin return on investment (GMROI).”
Safety And Selling Up
With an estimated 20 million vehicles currently registered on Canadian roads, the need for competent brake pads to safely stop during both routine driving and emergency situations is crucial as we head into spring. With every new vehicle brought into operation, the potential market for replacement parts increases.
The location of your store is one of the most crucial factors with regards to your proximity to major suppliers — keep in mind it also contributes to the rate of brake fade (or lack thereof), as Pariano explains. “You will find in highly populated cities like Toronto, Montreal, and Vancouver, [there is] more starting and stopping with traffic, as opposed to more rural areas where there’s smoother driving. If you live on hilly terrain, as another example, you’re going to create greater wear than a highway driver. These are factors to consider in terms of longevity.”
Quing Zheng, president of Newtek Automotive Distribution Inc. in Cambridge, Ont., recommends that jobbers get driver-specific as well as vehicle-specific when it comes to replacement pads. “Say you have two cars: one’s an F-150 that’s tripped out with fancy wheels, bed cover, with nothing other than a briefcase that goes in the bed. Meanwhile, another F-150 belongs to a plumber that carries 1,000 lbs of pipe and tools on a daily basis. Same vehicle, but two completely different brake requirements.”
While both model cars may be completely identical from an OE standpoint, excess weight or towing applications — as is the case with the second F-150– will not only require a different formulation but possibly a different type of brake altogether, since 80% of the brake work load is handled by the front brakes.
“By selling more premium products you have a lot of benefits, and that is product experience delivered to the customer installer, a reduction in the number of comebacks, quieter braking, and better performance. So as you move up you’re giving more quality to the end user. And for the most part the end user is prepared to pay the premium for the right brake pad that will deliver him the product experience that he requires,” says Braunstein.
However, added to this grade/type confusion is the issue of safety, especially when you’re dealing with brake pads. Not only should you look for manufacturers who have a history in the aftermarket with a strong commitment to R&D and technology, but also who can help create a scenario where selling up means improvements to your product mix.
The more you go premium, the more it creates a cycle of satisfaction for the ultimate end user, the consumer.
The Need For Brake Pad Standards Hits Public Sphere
Last April, Jobber News editor and publisher Andrew Ross, authored a feature about the lack of regulatory standards entitled “Creep Groan: The Dark Art of Brake Friction Science and the New Push for Standards.” The article detailed the process for determining appropriate friction formulations, and the fact that there are no regulations determining the performance of aftermarket brake friction, only voluntary industry standards. Shortly after publication, ABS Friction purchased the reprint rights to post the article on its website.
Flash forward nine months to a conversation between Rick Jamieson, CEO of ABS Friction in Guelph, Ont., and Gary Norris, a business reporter from the Canadian Press. Norris was referred by the Canadian Manufacturers’ Association to Jamieson on an unrelated story.
When asked about his background, Jamieson referred Norris to the ABS Friction homepage. While touring the site, the reporter found and read the Jobber News article.
“He thought it was a joke or something,” said Jamieson of Norris’ response to the lack of standards for brake pad regulations. “It’s a free market for brake pads in Canada. I haven’t actually read the legislation but I know it factually, because I’ve been in the industry roundtable in the U. S. and they always quote that Canada and the U. S. are the two most developed nations that don’t have standards for brake pad regulation.”
The reporter checked on the veracity of the claims with government ministries, and wrote an article warning Canadian drivers to take care when selecting brake parts.
The story was picked up by Canadian Press and distributed across Canada in such news venues as CBC News and The Globe and Mail, and also prompted a series of radio interviews with Jamieson.