By T. Murrali
Automotive Aftermarket Products Expo (AAPEX) is the premier global event representing the $356 billion global aftermarket auto care industry. AAPEX 2016 in Las Vegas between November 1 and 3 featured more than 2,300 exhibitors, 5,000 booths, 40 AAPEXedu sessions and over 45,000 buyers. More than 160,000 automotive aftermarket professionals from nearly 140 countries visited the expo.
The automotive aftermarket in the US last year was influenced by several factors like falling gasoline price, the increased miles driven and vehicle sales. This year it is being influenced by consumer attitudes and a wealth of economic and technological trends. The US election in November had no major impact on the automotive aftermarket unlike the manufacturing industry.
AAPEX has been adding new programmes. This year, there was more technology than ever before. In addition to the all-new Automotive Technology section on the show floor, AAPEX launched ‘Let’s Tech’ presentations.
AAPEX exhibitors presented products and services in several categories including accessories, antifreeze/coolant, batteries, body repair, brakes, car care accessories, cargo management, climate control, electrical, emission control, engine parts, exhaust system, filters, gaskets, greases & lubes, ignition system, lighting, remanufactured parts & components, sealants, adhesives and compounds, steering, suspension, wheels and wipers.
The AAPEX attendees included auto parts retailers, auto parts warehouse distributors, jobbers, automotive service professionals, service chains, paint and body personnel, and automotive aftermarket industry leaders and innovators.
AAPEX is co-owned by the Auto Care Association and the Automotive Aftermarket Suppliers Association (AASA), and the light vehicle aftermarket division of the Motor and Equipment Manufacturers Association (MEMA).
Bill Long, President and COO, AASA said the association has opened a dialogue about the ‘Connected Aftermarket’ at its Vision Conference earlier this year. A more connected car could lead to increase in key business drivers for the aftermarket. It will lead to increased awareness of failure and replacement rates, and prognostics that alert both motorists and service providers of an impending failure. More end-consumer awareness would allow for increased maintenance performed on vehicles.
AASA has also initiated a few pivotal steps to secure the aftermarket’s future and present a path forward. “AASA clearly defines what the industry wants. It is more than data ownership. It is that the motorists retain freedom of choice for vehicle repair and replacement of parts and collaborate with OEMs on viable technical solutions. This is a process that has begun and we are encouraged by the progress in working together by developing ‘connected-vehicle’ training and certification for shops. This is a critical step to show the motoring public and regulators that we are prepared. Grass-roots awareness speaks for itself. The industry is united in the goal of freedom of choice for vehicle repair and service parts,” Long said.
Brian Daugherty, Chief Technology Officer, Motor and Equipment Manufacturers Association (MEMA), said fuel economy standards and the resulting lightweighting efforts will impact the entire supplier base. V2V (vehicle to vehicle) technology has tremendous potential to usher in the next wave of safety improvements as well as improving overall transportation efficiency. “Don’t let the hype surrounding autonomous technology distract us from implementing near-term automated safety systems and V2V communications. Automotive cyber security is critical. It is one of the biggest issues facing our industry and the associated issues will have a large impact on the aftermarket. From the aftermarket perspective, the main issue is how we keep vehicles cyber-secure without locking out the aftermarket. AASA and MEMA are very much involved in ensuring that our industry can deliver cyber-secure systems that also allow the access required for aftermarket repairs,” he said.
Certified Reman Products
A certification programme to help buyers purchase remanufactured products with like-new quality and warranty coverage was announced at AAPEX by MERA President and COO, John Chalifoux. With the programme the companies can now certify that their remanufacturing processes meet quality management standards more generally associated with new manufacturing. This certification also allows all buyers to identify and purchase confidently remanufactured products.
“Remanufacturing and new manufacturing are both standardised industrial processes, and both yield high-quality, fully-warranted products. Therefore, it makes sense that the ‘Manufactured Again’ certification programme is built on quality management standards that can be applied to both new and reman products,” Chalifoux said.
As part of event, the organisers conducted AAPEXeduprogramme, beginning a day before the expo. It featured several new sessions onconnected car opportunities, as well as sessions on next generation marketing, online parts sales, and building brand and bottom line.
Speaking on the 2017 Aftermarket Outlook Nathan Shipley of the NPD Group, Inc., revealed how sales in 2016 measured up to expectations, shared insights into consumer attitudes that would shape the coming year, and provided his outlook on sales for 2017. The important take-away for the participants included the macro factors that will have the greatest influence on 2017 sales; the changing consumer attitudes that may represent opportunities for growth, and the expected 2017 automotive product sales.
Speaking on the ‘Key to Better Sales Negotiation Outcomes,’ Mike Schatzki of Negotiation Dynamics said buyers want to have the best of both worlds. They want their problems to get solved, add value, reduce their costs, and get a better price. The attendees imbibed a few nuances including how to get inside the buyer’s mind to understand which value propositions are really important to them and how much they are truly willing to pay for them.
The topic on ‘Selling Parts for Imports: Have You Ever Tried Listening to Your Customers’ allowed all facets of the industry, manufacturers, jobbers, and service professionals to learn what the end-user of their product wants. Technicians were asked what they want and expect in terms of product quality, importance of service and counter-person knowledge. Key takeaway for the participants included what service professionals consider important when purchasing parts; what type of customer service professionals they expect when selecting suppliers and the knowledge service professionals expect from counter-persons.
Representatives of PwC deliberated on the topic: ‘Is Vertical Integration in the Aftermarket Going to Redefine the Competitive Landscape’? They said the players in the automotive aftermarket are facing unprecedented challenges. With big box retailers continuing to gain market power, increasing penetration of low cost county imports, and growing competitive pressures from the OEMs, the industry seems to be responding through more than just horizontal consolidation. A potential trend seems to be forming towards vertical consolidation among channel players (including installers/retailers, wholesalers/distributors and now, manufacturers) resulting in a potential shift in the competitive landscape.
Speaking on ‘Understanding How Emotions Drive Purchasing Decisions,’ Chuck Bean of the Martec Group spoke on the emotions that play a part in every single decision an individual makes. While factors like price or quality are ‘top of mind’ conscious thoughts, what happens when there are multiple products or services that appear to provide equal value? The decision ultimately comes downto the passions and aspirations in one’s subconscious.
The session on ‘What the Aftermarket Needs to Know About Connected Vehicles’ discussed the system of connected vehicles that has been under development by the US Department of Transportation for over a decade. The wireless-based technology allows vehicles to ‘talk’ to other cars, trucks and buses as well as traffic signals, work zones and other infrastructure. The technology has the potential to address up to 80 percent of all crash scenarios.
Marcus Sheridan of the Sales Lion talked about ‘The Digital Seller: How to Make the Internet Your Best Friend and Dramatically Increase Sales Success.’ Most of the people heard about the ‘digital consumer,’ but what about the ‘digital seller?’ Studies have shown that over 70 percent of the buying decisions today are made before someone actually talks to a sales person. This shift has had a dramatic impact on sales teams around the globe.
In the session on Building Your Brand in the Digital Age, Al Haberstroh of MontAd Media covered some of the latest targeting technologies to grow brand awareness and product preference. Reaching people with the highest business value to aftermarket companies is a challenge. The deliberations helped the attendees to learn how to use data and advanced tools and tactics to reach niche B2B and B2C audiences.
Brandon Schoettle of University of Michigan Transportation Research Institute spoke on ‘Self-Driving Cars: Car Sharing and New Users to Increase Vehicle Usage and Mileage.’ He said self-driving vehicles have the potential to operate with a ‘return-to-home’ mode, acting as a form of shared family or household vehicle.
Mike DeSorbo of DCG Services, LLC, spoke on ‘Understanding and Strengthening your Brand.’ He said, brand is the most important asset one has and that is not on the balance sheet! This programme demystified what a brand is and provide ways to strengthen and leverage the brand in the market and online. It focussed on helping to understand what a brand is and how a brand influences consumer’s buying decisions. Besides, it also looked at the brand from the customer’s viewpoint. The difference between customers, friends (repeat customers) and fans of the business and how to convert them were discussed.
India At AAPEX
About 40 Indian companies participated in AAPEX, including the 12 through Automotive Component Manufacturers Association of India (ACMA). The Past Chairman (western region) of ACMA, Kirti D Rathod, told AutoParts Asia that the first day of the show was a bit slow; it was good from the second day. Most of the participants from India had wide cross section of buyers and contacts from Central and Northern America. They could see what the competition is doing and how new products were being introduced. Foreign visitors coming to the Indian stalls could get a chance to see all critical components readymade. They could get a real bouquet of products.
Asked how Indian companies were being perceived by the foreign buyers, Rathod said the perception has evolved a lot. “I had some instance where some buyers said that “we hedged our bets well by banking on India despite having plants in China; some people have said that it was a good decision to start developing Indian sources; they were able to develop two or three different buying strategies.”
On the missing link for the Indian participants he said, “it is in the way we present ourselves. We need to learn from certain foreign pavilions on the landscape that they create and present themselves. We definitely need to push the participants to the level-2 from the current level-1 of the expo centre as the traction is more.” Overall AAPEX 2016 made every buyer and seller busy all through the three days. The next edition of AAPEX will be held between October 31 and November 2, 2017 at the same venue.