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Many years ago, in high school to be exact, a friend of mine drove a 1980 Ford Thunderbird. He began to complain that the vehicle was losing power and it was getting worse and worse. I was always working on my own car and generally was known as a “car guy,” so he asked me what I thought. I asked him if he had checked the air filter recently. “Air filter?” he responded.
Admittedly, I knew very little about cars at the time, and my response was the only thing I could think of. Out to the parking lot we went. Not being able to get the lid off the air cleaner was a bad sign, and when we finally did, completely plugged was an understatement. Naturally, a new air filter fixed his problem. I was a little full of myself after that, but I never told anyone it was a lucky guess.
Even though I’ve never seen one that bad since, as a technician, I’ve had many opportunities to sell air filters. The job is a little easier for us because we are most likely holding a visual representation in our hands – one we can show the customer. This is a tactic that often works well, especially if you have a new one to compare side-by-side.
Sometimes it’s an easier sell than others, as some people understand the importance of the air filter; this usually is the staunch oil-change crowd. But, others are skeptical and take a little more convincing.
Selling, for me, always has been based on fact. I often first ask if they can remember the last time it was changed. If not, it’s probably due for replacement, and I stick to the once-a-year rule. But you always have to make exceptions based on an inspection, and with vehicles that are driven only seasonally or driven very little, at minimum I have to see dirt collecting in the base of the pleats, or a noticeable discoloration before recommending replacement.
If a customer is still skeptical, I explain that since a plugged air filter can completely keep a vehicle from running, even 10% blockage can begin to affect performance. I also like to point out that the effects of a dirty filter were more noticeable on older vehicles, and modern fuel-management systems can compensate for reduced air flow. This is good for drivability and emissions, but bad for overall performance. Along with other normal maintenance items, it’s easy for a vehicle owner to overlook a dirty or plugged air filter with no warning signs from their vehicle.
Be prepared for questions about high-performance, because you will get them. Many people ask about high-flow filters, cold-air intakes or, on an older vehicle, ditching the original air cleaner for a round chrome replacement. Don’t be intimidated by performance questions. Here’s what you need to know to answer them with confidence.
High-flow performance filters are a very common upgrade. They typically are recognized and associated with a color, as opposed to the traditional white paper element. Often pinkish/red, the color is from a dyed oil that’s soaked into the element. The elements typically are a cotton weave, held in place by a wire mesh. The weave is looser than a standard paper air filter, allowing a greater volume of air to pass through.
Since the loose weave cannot filter out the smaller particles, it is soaked in oil, and the particles will, in turn, stick to the oil. Dye is used in the oil so there is an easily noticeable contrast between the oil and the element, allowing you to ensure that all areas are saturated. Even though red is the most common, there are multiple other colors available.
These types of filters absolutely flow better, and it’s often noticeable in engine-performance characteristics. But they do require regular cleaning and re-oiling to maintain their level of performance. You can be confident about selling them and touting the increased flow, but I do warn people that when they clean and oil them, be sure to heed the instructions, and don’t over-oil them. There always have been “rumors” of these types of filters damaging mass airflow sensors, but they are largely unfounded, and over-oiling them is the only thing that could possibly contribute to this.
If you have a customer with an old car who wants to install a round chrome air cleaner, you might not change their mind, but there are many facts about the original factory air cleaners that often are overlooked. Many people think they’re an eyesore compared to a shiny new chrome one, but there’s a lot more to them than meets the eye.
The inside of the air cleaner is designed to smoothly direct the airflow up to the top while reducing turbulence, so the air can be smoothly drawn down through the carburetor. They have a snorkel extending off them to pick up cool air from the side of the engine compartment, and the snorkel also is designed to increase the velocity of the air as it enters the air cleaner.
In addition, the snorkel design incorporates a pickup for warm air to be drawn from around the exhaust manifold up into the air cleaner for improved cold-weather drivability. On the main body of the air cleaner, there also is a filtered pickup for fresh air into the crankcase as part of the positive crankcase ventilation system, so they are important for emissions too.
Theoretically, this is all great information, but if someone wants a chrome air cleaner, I get it. They look great, and they’re a common characteristic of some old muscle cars. The completely exposed element offers the maximum amount of airflow necessary for the type of performance sought in these cars.
The minor affect on drivability due to lack of a heat riser and less air velocity at low RPM isn’t missed on a car with straight-line, high-RPM performance in mind, and one that most likely is only driven in the summer. I do like to point out that there were a handful of top-dog muscle cars that originally came with chrome open-element air cleaners. On these cars, the crankcase ventilation was routed to the air-filter base, and the aftermarket units generally have a stamped breakout in the base and come with a fitting so this can be reconnected. I always encourage them to reconnect these emission-related devices.
If your customer is replacing the air filter on an old vehicle with an OE air cleaner, it’s important to use a high-quality filter and always look it up for the application. You can’t see it when the lid is on, but the filter is designed to seal on the top and bottom so that all air flows through it. If a filter is installed that’s even a little bit too short, unfiltered air will be drawn over the top of the filter into the engine, plus mice can fit through just about any small crack, and that carburetor is an awfully inviting cubby to store the kibbles and bits you keep in the garage.
How’s Your Cabin Filter?
When a customer asks about an air filter, it opens the door to other opportunities. The most prevalent is the cabin filter. Most vehicles have them now, and as common as they are, the majority of them still get neglected. There’s a lot at stake inside the heater box, and aside from the obvious benefit of fresh air, it’s the clean, dry air flowing through the system that can prevent bacteria, odors and corrosion of the A/C evaporator and heater core. It’s nice to have all the knowledge, but it’s important to use it to your advantage. I’m careful about directly answering questions and not going too deep. Let your customer guide the direction of the sale. If they want stock, go stock. If they want performance, go performance. If you get too deep, you can scare someone off. Present them with fact, caution them when necessary and share the part of your knowledge that helps the sale. After all, that’s our goal and that’s how we make a living.
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Electric vehicles. E-commerce. Vehicle complexity. Consolidation. Autonomous Driving. Connectivity. How will these and other trends affect the automotive aftermarket over the next decade, and more importantly, how should aftermarket suppliers respond?
A new study – “The U.S. Automotive Aftermarket in 2035” – attempts to answer these questions, with aftermarket suppliers “facing more inflection points than we ever have before,” in the words of Automotive Aftermarket Suppliers Association (AASA) President and CEO Paul McCarthy.
“And the reality is we can’t handle them all,” McCarthy said at the 2022 AASA Vision Conference in Dearborn, Michigan. “So we need to understand which ones are really going to disrupt us and which ones may matter less. Because if there’s one thing we know, the aftermarket in 2035 is not going to look like the aftermarket today.”
Conducted by the management consulting firm
link hidden, please login to view, the study looks at the current and future states of the automotive aftermarket. One of the most alarming conclusions from the study is that aftermarket suppliers aren’t ready to deal with nine high-impact trends: BEV (battery-electric-vehicle) penetration; e-commerce and o2o (online-to-offline); consolidation; labor shortages; supply chain disruption; data access; autonomous driving; supply chain footprint; and sustainability. Barry Neal, senior partner at Roland Berger, and Neury Freitas, principal at Roland Berger, presented an overview of the study findings at the AASA Vision Conference. Here are some of the highlights.
Battery Electric Vehicles
How much and how soon will BEVs affect the independent aftermarket? That all depends on which part of the market you serve.
By 2035, the study projects that only 2% of 12-year-old vehicles and older will be electric, while 11% of 8- to 11-year-old vehicles will be electric. However, the impact of BEVs will be more pronounced in newer vehicles, with 32% of 0- to 3-year-old vehicles expected to be electric.
“The more you are dependent on the OES or OEM channel, the more or sooner EVs will actually impact your business,” Freitas explained.
At 100,000 miles, BEVs require 50% fewer service visits than internal-combustion vehicles, based on OEM service recommendations. By 200,000 miles, that gaps shrinks slightly to 47%.
“There clearly are services that will disappear in an EV,” Freitas said. “Anything that’s related to the engine, anything that’s related to combustion will go away.”
BEVs will need battery coolant, but due to regenerative braking, brake systems typically last longer on electric vehicles.
“The tire players are really happy,” Freitas added. “They are waiting for EVs, because either you have a heavier vehicle that needs a stronger structure of the tire, therefore they’re more expensive, or if you use a normal tire, that’s going to wear faster. So, that’s a positive.”
Online-to-Offline Business Model
The pandemic has accelerated the growth of o2o in the automotive aftermarket, as more consumers embraced buying parts and booking appointments via their mobile devices. The linkage between the offline and online worlds “brings a lot of benefits and a lot of convenience for consumers,” Freitas asserted.
The increased convenience for consumers, and the cost savings along the value chain, will continue to drive the growth of o2o in two phases: parts efficiency, as proactive diagnostics and digital parts/service selection and scheduling enable a lower cost structure; and labor efficiency, as advanced booking/scheduling and predictive maintenance improve labor utilization and throughput.
“If you get the higher convenience for consumers, together with the potential cost savings, at a first step, if you know which parts will be needed and where they’ll be needed before they are actually needed, you can cut a few steps [from] the value chain and in the supply chain, and you can actually save some real money, as you don’t need hot-shot [delivery], for example,” Freitas explained. “And then in a second step, once we get to a large enough critical mass, and the shops are able to schedule similar services back to back, we might get some efficiencies from the technicians as well.”
According to Roland Berger, the United States is leading the way in terms of consolidation, with the top 10 distributors in the U.S. independent automotive aftermarket (IAM) commanding 75% to 80% of the total market share. Europe is a distant second, at 30% to 35%, while China is at 5% to 10%.
Roland Berger sees more consolidation ahead for parts suppliers and service providers (mechanical and collision). Going forward, there won’t be as many opportunities for large retailers to acquire distributors, Freitas asserted.
“Therefore, if one of those big companies has a hiccup over the next 12, 13 years, we see as a chance of two of those top four or five players actually merging and becoming an even larger player,” Freitas added.
Looking at the big picture, U.S. unemployment rates were at historic lows in the years leading up to the COVID-19 pandemic. When the pandemic escalated in early 2020, it skyrocketed. Since then, the unemployment rate has been declining steadily. According to the U.S. Bureau of Labor Statistics, the unemployment rate in March dropped to 3.6%.
Neal and Freitas showed two charts that don’t bode well for the future of the IAM. One chart showed a steady decline in the number of students completing postsecondary degrees for automotive repair since 2010. The other chart showed the imbalance between the supply and demand of technicians since 2010. While the technician shortage is nothing new, the gap between supply and demand is projected to widen in 2025 and beyond.
Freitas concluded: “If the industry does not really get organized, we don’t think this problem is going to get solved anytime soon.”
The headline here is that China appears to be losing its cost advantage – even without tariffs.
For the past decade or so, if you wanted to manufacture products on the cheap, China was the obvious destination. However, when you factor in the rising costs of outbound freight, raw materials, manual labor and other variables, China will lose its cost advantage to Mexico as soon as this year. By 2035, due to the projected increase in China’s labor costs, it will be significantly cheaper to manufacture goods in Mexico compared to China, according to Roland Berger.
Not surprisingly, Roland Berger projects that the percentage of U.S. auto parts manufactured in Mexico will grow from 24% in 2020 to 31% in 2035.
By 2035, nearly 100% of new vehicles sold in the United States will be connected, meaning they’ll have the capability to receive and transmit information. Extrapolated to the total U.S. vehicle parc, 66% of vehicles will be connected.
How we get to that point – and how it will affect the IAM – is less certain. Currently, the automakers control most of the data generated by vehicles, which is bad for consumers, bad for IAM suppliers and good for the OEMs. In the medium term, Roland Berger anticipates a shift to open APIs (application programming interfaces) and “mixed control” of vehicle data.
In the long term, a move toward open APIs and open data would be best for IAM suppliers. However, where we land will likely be determined by federal lawmakers and the OEMs.
In light of the study’s findings, Neal and Freitas outlined a number of potential steps that IAM suppliers could take.
“In terms of individual responsibilities, there’s the importance of reviewing the portfolio and product strategy,” Neal said. “As you look at the influx of new technologies, both in terms of electronics, battery-electric vehicles, ADAS and autonomous, how are you adjusting your portfolio to adapt to those and what is the strategy you have, whether that be a last-man-standing strategy or looking for a third leg in terms of other opportunities, or the development of an EV strategy to attack some of the new opportunities that are coming out?”
Regarding the technician shortage, Neal also emphasized the importance of supporting trade schools “as well as supporting of advocacy at the high school and the middle school level for robotics programs and mechanical programs to ensure the interest of that technician force of the future, as well as an industry-level support for new entrants and opportunities, supporting aspects such as augmented reality and remote support for technicians in the field to allow some of those newer solutions to support a broader labor force in the future in terms of the capability set in technology.”
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