As we move slowly forward this year through the pandemic, the automotive industry is facing challenges with retail sales of new vehicles due to chip shortages and resulting inventory shortages. While this will eventually pass, how will automotive manufacturers and dealerships ride this storm to increase revenue and profit? Aftermarket parts sales can make the difference.
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The Aftermarket Parts Industry
The aftermarket parts industry is big business for automotive manufacturers and dealerships across North America. According to a recent automotive aftermarket report coauthored by Hedges & Company and BGL, the U.S. light duty auto parts aftermarket market size is projected at $290 billion in while the entire U.S. automotive aftermarket&#;including&#;medium-duty and heavy-duty vehicle parts is projected at $390 billion. Canada represents approximately 39 billion in aftermarket parts sales. These sales numbers are projected to increase over the next three years by approximately 4% each year. With an industry this size, the doors are wide open for auto manufacturers and their dealerships to increase aftermarket parts sales.
The Marketplace
The U.S. automotive parts marketplace represents 535,000 individual businesses consisting of independent manufacturers, repair shops, distributors, marketers and retailers. These businesses serve all 280+ million light, medium, and heavy-duty vehicles registered in the U.S. today. There are about 4,600 auto parts and accessories and tire store retailers in Canada and approximately 23,000 auto repair/service repair businesses. As you can see by the diversity of aftermarket parts dealers, there is a great deal of business spread across this entire industry. No one business type is dominating market share, and competition overall is high. Automotive manufacturers and dealerships have the opportunity to grow their aftermarket business through dealerships owning their own &#;backyard&#; so to speak. In other words, focus on a five-to-eight-mile radius around your business, targeting the independent repair facilities as well as commercial/fleet accounts that are looking for true quality original equipment (OE) parts for their customers and their vehicles.
Yet, most dealerships and manufacturers have seen their aftermarket business stagnate with most of the business residing with Independent Repair Facilities.
Independent Repair Facilities (IRFs)
The average age of cars and light trucks in the U.S. has risen to a record-high&#;12.1 years old,&#;according to IHS Markit. This means that more than ever people are keeping their vehicles longer, thus requiring more frequent repairs for those vehicles. Independent Repair Facilities, or IRFs, as they are called in the aftermarket parts industry, have captured the repair market. IRFs perform 75% of aftermarket auto repair, while a mere 25% of the business lives with dealerships.
This is today&#;s reality so targeting IRFs to make sure they continue to use recommended OE parts is crucial. Other non-original equipment aftermarket parts companies have gained momentum in the marketplace over the past 20 years. But, if offered a competitive price, IRF&#;s would prefer to purchase from the local OE dealer to provide their customers with original parts.
Commercial and Fleet Business
According to a May 24, article by V12, &#;A Look at Trends and Statistics in the Automotive Aftermarket Industry,&#; the average age of the U.S. vehicle fleet has increased 17% in the last ten years. Commercial and fleet companies are holding on to their vehicles longer to maximize profitability. In doing so, the need for replacement parts is high and critical for their success. Each vehicle that is down for service and parts costs companies thousands or more in lost business. Commercial accounts and fleet companies are looking for original equipment parts at a competitive price. This creates a great opportunity for automotive manufacturers to work with their dealerships to provide OE parts for these vehicles.
How to Grow Your Aftermarket Parts Sales
1. Maintain Proper Inventory. Having the right inventory to meet the demand in your market is critical. What is the right inventory? Figuring that out starts with assessing market demand within a five- to eight-mile radius of your location. Once you know what makes and models are owned in your area, you can identify potential hot sellers and build an inventory of the right parts to ensure that they are available at the right time.
2. Offer Expedited Delivery. Delivering parts in a quick, reasonable time is imperative. Time is money for the auto repair industry. Do you know if you are satisfying your customers&#; delivery needs? Some dealerships feel that getting a part by end of day is sufficient. While that may be acceptable in certain markets, in others you&#;ll need parts delivered faster so cars are not sitting for extended periods in the shop. A comprehensive market assessment is key to determine what delivery time you need for your area to ensure that you are meeting market expectations. To build a sound aftermarket parts business, you&#;ll need to identify someone to conduct that market assessment&#;someone other than your current parts delivery truck driver, which is a distinct role in itself that is vital to business success.
3. Assure Competitive Prices. Consumers expect quality parts at a competitive price. How do you know if you are competitive? Once again, the answer is to survey your area and create a profile of your typical potential customer. Your parts delivery driver may have some insight, but they can&#;t evaluate all the independent shops and fleet operations businesses in your area.
4. Keep Feet on the Street. Waiting for your phones to ring will not grow your aftermarket parts business. Your marketing and sales strategy must also extend beyond shaking hands and dropping off a flyer. You need to get out in the market repeatedly and build strong relationships with your customers. And that is not done by the .
What this boils down to is the need for a go-to-market action plan. The ideal plan would map out a territory, targeting a specified number of contacts per day at independent repair shops and fleet operations. Since most dealerships have neither the expertise nor the staff to initiate or manage this kind of go-to-market plan in a way that ensures success, they rely on experienced sales acceleration companies such as MarketSource to make it happen. In this way, MarketSource becomes your aftermarket parts business development management partner.
Building a successful aftermarket parts business requires a commitment from within. It includes closely evaluating and gaining an understanding of your local market and your competitors, defining your ideal customer, implementing the right kind of focused training, and specialized industry expertise to assure the business will grow.
Interested in learning more about how to accelerate your aftermarket parts sales and overall bottom line? LET&#;S TALK >>
If you've ever taken your care into a used auto parts store looking for a part, the service technician may have asked you if you want OEM, aftermarket, or genuine auto parts. Although the differences are often subtle, there can be a significant difference in the level of quality.
Below, we explain the differences between each and which is best for your car. Ace Auto Parts carries a wide selection of auto parts. If you are looking for a specific auto component, please ask us.
Do Auto Manufacturers Make Their Parts?
There was a time when auto manufacturers built every part of their cars. Those days are long past, however, as most manufacturers now contract other companies to produce parts for them.
This is not necessarily bad because many companies specialize in developing and creating these parts for specific manufacturers. Therefore, they're designed no differently and with no less quality.
Breaking Down 3 Different Types of Auto Parts
Replacement auto parts are categorized by the company that built them or how and when you buy them. Let's describe and compare the parts.
1. Genuine Car Parts
A genuine part is an auto component installed in your vehicle when it was first manufactured. Genuine parts are more expensive than other auto parts because they carry the company logo.
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Keep in mind that genuine parts are not necessarily better than OEM or aftermarket parts.
Ace Auto Parts can give you recommendations on which parts to buy based on their quality and performance rather than who made them.
2. OEM Car Parts
Original Equipment Manufacturer (OEM) parts are built by the company that initially made the parts for the auto manufacturer. Our OEM parts are precisely the same as those that came with your car.
The difference is that they don't carry the manufacturer's logo. OEM parts are just as reliable as genuine parts, but you get them for a better value.
3. Aftermarket Car Parts
Once a car is built, companies can manufacture parts that will work for that vehicle. To do this, they buy the rights to make the parts. The aftermarket parts we sell do not always look like OEM or genuine parts, but they perform the function needed to operate the car.
Just as you can trust OEM parts, you can rely on aftermarket car parts to work well.
Pros of OEM Parts
What do OEM parts offer?
Authentic Car Parts
OEM parts will come straight off the assembly line and were specifically created for your vehicle.
Warranty Covered
More often than not, your vehicle's warranty plan will cover OEM car parts shipped directly from the manufacturer.
Simple Choices
Car owners will have fewer part options, allowing for straightforward repair work.
OEM Cons
A few drawbacks that come with OEM&#;
Higher Price Tag
OEM car parts will always be a more expensive repair option, typically costing on average more than 50 percent higher than aftermarket car parts.
Quality Not Guaranteed
Because of the higher price tag, OEM car parts tend to lack quality because vehicle owners are simply paying more for the car manufacturer's name.
Limited Accessibility
OEM car parts need to be purchased and installed through licensed dealership repair shops, meaning you might have to travel further and longer for your desired car part.
Pros of Aftermarket Parts
Aftermarket parts are a fantastic alternative, and here's why.
Save Money
As previously stated, aftermarket car parts will save you significant money while not sacrificing quality or assurance.
Ample Accessibility
Independent auto part stores and repair shops are more widely available to accommodate you with any repair or installation needs.
More Variety
Professional car service workers will provide you with more car part options to suit your vehicle and financial needs.
Quality Upside
Aftermarket car parts can often leave you with equal or greater quality than paying more for OEM car parts.
Aftermarket Cons
If you are considering aftermarket parts, there are a few potential drawbacks.
Varying Quality
It's possible to experience varying degrees of quality depending on mechanic experience or aftermarket car part price.
Warranty Coverage
Depending on the warranty plan, aftermarket car part expenses may not be covered, but you may be able to add on addicitonal coverage for a cost.
Immense Options
Having more options of car parts to choose from may prove overwhelming or stressful. Ultimately, choosing between OEM or aftermarket car parts depends on what you're comfortable with for your vehicle, be it quality assurance, maintenance budget, or repair urgency.
The main thing to keep in mind is that it's always a good idea to get a second opinion on car part solutions.
Ace Auto Parts Has What You Need in Minnesota
No matter what type of part you need, Ace Auto Parts has it. We carry a large selection of used auto parts, tires, and batteries. If you have a specific part in mind, you can download our app and instantly find it.
You can also call us at 651-717-, or you can message us on our contact page. We provide used auto parts for Minneapolis and St. Paul, Minnesota vehicle owners.
Contact us to discuss your requirements of Truck Accessory Manufacturers. Our experienced sales team can help you identify the options that best suit your needs.
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