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APA’s Steve Tucker: ‘Threats Are Just Opportunities’
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By Counterman
In link hidden, please login to view, we gave leaders from the major distribution groups and trade associations an opportunity to reflect on the most critical issues affecting the automotive aftermarket. For the second year in a row, we let distribution leaders “riff” on these topics in their own words.
Here’s what Sue Godschalk, president of Federated Auto Parts, had to say about Federated’s accomplishments thus far in 2023.
Federated Auto Parts got off to an exciting start at the beginning of the year with the announcement of our newly formed joint venture with the Aftermarket Auto Parts Alliance. Both groups immediately set to work as The Federated Alliance by evaluating areas where the combined membership could benefit through the elimination of duplication in areas such as data management, communication, education and training, and other important initiatives.
In March, we were excited to have our new co-venturers join us for the annual Automotive Parts Services Group (The Group) membership meeting, along with our partners from The Pronto Network, for an exciting four days at the Gaylord National Harbor in Maryland just outside of the nation’s capital. Having The Federated Alliance members and The Pronto Network members in attendance, as well as representatives from our best APSG supplier partners, the meeting attendance was well over 1,000 and by far our largest meeting ever. The meeting theme of “E Pluribus Unum” (Latin for “out of many, one”) fit the location and best describes The Federated Alliance and The Pronto Network coming together with many new and exciting initiatives for the coming year.
On March 1, the Federated Auto Parts marketing team kicked off the Federated “Suite-Stakes” program, which has become an exciting annual program for our members and their service-provider customers. Suite-Stakes ran through June 30 and is always a fun way for Federated members to grow sales with existing customers and gain new business. In the past two years, Federated awarded more than 9,000 prizes, and this year is no different with a long prize list featuring new prizes, including sales team and member rewards and customer training events, such as a trip to Florida for a three-day hybrid/EV training workshop held at the new Group Training Academy Training & Research Center. With new automotive technologies and stricter regulations for environmental compliance on the horizon, education and training will continue to be a priority for Federated in the long term.
Another exciting addition to the Federated marketing program is our new sponsorship of the World of Outlaws Sprint Car racing series. The work area for each race is now known as the “Federated Car Care Work Zone” and receives a lot of visibility as the professional crew members work on the cars during the 87-race season that can be viewed on DIRTVision. This sponsorship ties in perfectly with the very popular “Get Dirty with Kenny” dirt-track racing experience we have conducted year after year for lucky Federated customers.
As the saying goes, one year equals 365 opportunities, and as new-vehicle sales continue to be low and the existing vehicle age high, I am optimistic that the second half of 2023 will be strong and full of opportunities for our industry and our membership.
Federated Auto Parts
Founded: 1985 Headquarters: Staunton, Virginia Number of members/shareholders: 51 Number of distribution centers: 155 Number of parts stores: 1,500+ Number of suppliers: 200 Website: link hidden, please login to view The post
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By Counterman
In link hidden, please login to view, we gave leaders from the major distribution groups and trade associations an opportunity to reflect on the most critical issues affecting the automotive aftermarket. For the second year in a row, we let distribution leaders “riff” on these topics in their own words.
Here’s what Steve Tucker, president of Automotive Parts Associates, had to say on the topic of consolidation in the aftermarket.
The consolidation of the aftermarket has been a conversation for so many years now that it almost seems unnecessary to discuss further. Far too many see the independent WD as just “hanging on” and perhaps even as a relic of bygone years. Those of us who live in this space every day know different!
There is no question that there are fewer individually owned and independent warehouse distributors out there. There are still hundreds out there, however, that not only continue to survive but are thriving. The strengths of the players in the independent space are often difficult for the big-box guys to replicate. These business owners operate very close to the street and can quickly adjust to changing market conditions, see trends and act accordingly.
Servicing the customer and handling issues quickly continue to be the primary drivers, and our companies excel in those areas without question. Having true professionals with extensive parts knowledge working with our customers is a key differentiator for us. While we all do substantial business online with our customers, there is no substitute for personal attention especially when an issue needs timely resolution.
Additionally, our companies continue to see value in supporting name brands. As vehicle complexity continues to mount, technician customers are looking for brands they trust to ensure the repair is done right, and so the independent aftermarket continues to support our customers with manufacturer brands whenever possible.
Another aspect of the business that has been growing at an ever-increasing rate is the availability of good data and tools to mine and use that data to tailor inventories, maximize space, control deliveries, and improve virtually every aspect of the business models. I feel strongly that this is a key area that all the program groups invested in to provide those tools to our memberships in an easy-to-use concise toolbox. Data is king, and knowing how to take that data and use it to maximize the rest of our capabilities is critical for success and growth.
We can then tie this all together with a strong and responsive industry association that all of us need to support as they look out for us at a national level not only with legislative issues, but also by providing support with environmental initiatives, economic information, and best practices support. Our Auto Care Association is one of the best ways we can all ensure our future and the future of those that follow us in the independent aftermarket. I think for most of us this isn’t just a career, it is truly a lifestyle, and we need to work with Auto Care to leave this business in a great place for the next generation.
I look at other businesses such as pharmacies, retail, hardware, etc., and while the big-box guys have certainly impacted there as well, I still see a big number of independent businesses operating there as well and they do so based on the same “blocking and tackling” mentality we use. Service the customer! As a parting thought, and if you haven’t done so, I recommend you watch the Tom Hanks movie “A Man Called Otto.” In one of the opening scenes, he is attempting to buy a 5-foot length of rope in a hardware store and the cashier cannot sell him rope by the foot because the system only sells in yard increments. Our folks would’ve figured it out!
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By Counterman
You can’t turn a corner these days without seeing a headline about electric vehicles. In recent years, this caused some consternation in the automotive aftermarket, with internal combustion engine (ICE) vehicles being the bread and butter for this industry. However, new data shows there will continue to be room for – and a need for – products for both incoming electric and ICE vehicles.
According to data from the Joint EV Trends and Outlook Forecast from MEMA and Auto Care Association, while EVs are beginning to penetrate the U.S. car parc, ICE vehicles will maintain the majority share through 2040. By 2030, the average estimate for approximately 30% of new car sales will be electric vehicles, according to PwC, which partnered with the associations on the joint forecast.
That being said, over the past several months, we have seen a significant uptick in industry activation surrounding vehicle electrification, in a variety of ways.
Within the automotive aftermarket, we are beginning to see a mindset shift, moving from skepticism surrounding the idea of EVs into more companies seeing the opportunities available in this rapidly growing space. Take for example longtime diagnostic products provider Autel entering the market this past June with the launch of its new Autel Energy division, which released the MaxiCharger Home and Commercial Level 2 AC chargers, available in 40-amp and 50-amp flexible charging configurations, compatible with all plug-in electric vehicles.
In the automotive repair equipment space, BendPak recently introduced its EV2400SL EV battery pack and powertrain lifting system. This push-around full-rise scissor lift table is designed to make replacing both electric vehicle battery packs and internal combustion powertrain components more efficient, the company said. The patent-pending design offers all the benefits of BendPak’s former SL24EVT lifting system with several user-friendly enhancements.
Just this past month, GM announced plans to invest a total of $20.5 million across three of its Customer Care and Aftersales parts distribution centers in Tennessee and Michigan to modernize warehouse operations as the automaker prepares for industry growth and electric vehicle readiness.
NAPA also saw the need to invest in preparation for the incoming change and this past fall announced its “NexDrivePowered by NAPA” training program in the U.S. to prepare repair shops for the changes electrification brings in the repair segment.
In January, Shell paid a cool $169 million to acquire EV charging company Volta to “unlock long-term growth opportunities in electric vehicle charging,” the company stated.
Bridgestone unveiled at CES this January it’s new Smart Corner solution, a demonstration of the ability to enhance the performance, comfort and efficiency of electric and autonomous vehicles, while maximizing the lifespan of tires and air springs. The solution combines premium Bridgestone tires and Firestone Airide (previously Firestone Industrial Products) air springs that are engineered specifically for electric and autonomous vehicle applications.
Standard Motor Products said it is committed to providing replacement parts for hybrids and EVs and has added new part numbers specifically for hybrids and EVs through its Standard and Four Seasons brands.
Valvoline and ENEOS both have developed automotive fluids specifically for use in Hybrid and Plug-in EVs.
These are just a handful of examples of businesses that have long been involved in the traditional ICE market segment creating opportunities in the EV market, as well.
From a consumer standpoint, the rate adoption of EVs varies from country to country, with cost (be it cost-savings or cost barriers) being one of the top factors.
According to AMN’s sister publication dedicated to EVs, The Buzz, “While internal combustion engine (ICE) vehicles still dominate future vehicle purchase intentions, preference for electrified powertrains continues to rise. Overall, the global shift to EVs is occurring at different speeds as individual markets face varying challenges to adoption, including cost and availability of charging infrastructures.”
Citing data from Deloitte’s 2023 Global Automotive Consumer Study, The Buzz noted that “Despite mounting concerns about climate change and reducing emissions, lower fuel expenses are the top reason consumers choose EVs in the U.S., Germany, India, Japan, the Republic of Korea and Southeast Asia, in an effort to reduce vehicle operating costs.”
In the U.S., intent to purchase hybrid electric vehicles (HEV), plug-in hybrid electric vehicles (PHEV) and all-battery powered electric vehicles (BEV) are each up by 3 percentage points from 2022. Globally, consumer interest in BEVs is highest in China (27%, up 10 points year-over-year).
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By Counterman
With each new season, we’re presented with different challenges and different sales opportunities. It’s up to us to capitalize on these opportunities, and help boost our margins and keep our stores in the green. So, as the temperature starts to drop outside, let’s take a look at what we can do inside our stores to boost add-on sales, and what trends we can expect to see in the coming months.
‘Tis the season
The first category we’re going to look at is what I call “winter seasonal products.” These are the types of products that only come out to the shelf during this season. Ice scrapers, snow brushes, winter hats and gloves all fall into this category. Many stores will display these types of products on an end cap, or a special cardboard stand or display.
There are lots of opportunities to get add-on sales with this category. If a customer is buying a snow brush or ice scraper, ask them if they’d also like to pick up a pair of winter gloves, or a jug of de-icing windshield-washer fluid. Every little bit will help to boost your margins.
There are some products that fit into this category, but they stay out on the shelf all year long. One example would be fuel and oil additives. While these additives can be found all year long, they’ll likely move off the shelf faster in the winter. Why? Colder temperatures are especially harsh on vehicles that run on diesel fuel. When the temperature drops, diesel fuel can gel. This can lead to clogged fuel lines and filters. That’s why many diesel owners will pick up fuel-system treatments in the winter.
Batteries
Battery sales tend to jump twice a year: when the temperatures climb in the summer, and again when they drop in the winter. Cold weather takes a toll on batteries and electrical systems. Engine oil is thicker when it’s cold, so the engine is harder to start than it would be at warmer temperatures. On top of that, the colder temperatures will sap the cranking power the battery has to offer. There’s a good reason why batteries are rated for cranking amps (CA) and cold-cranking amps (CCA). The temperature outside has a big impact on how much power the battery has to offer.
When it comes to selling batteries, always remember to offer dielectric compound, as well as the fiber insulators that slide over the battery posts and sit underneath the battery cables. I’ve also had good luck selling small, compact battery jump packs to customers in the past. These small battery jumpers aren’t much bigger than a cellphone, but they pack a big power punch when you need it most. They’re relatively inexpensive, but they offer some serious peace of mind.
Wiper Blades
I’ve talked before about how I dreaded two types of days in the parts store: heavy snowfall and heavy rainfall. Why? Because I knew that we would be selling a ton of wiper blades on those days. It also meant that I would be installing all of those wiper blades outside, so I’d either end up soaking wet from the rain, or frozen stiff from the snow and ice. Worst of all, our margin on wiper blades was pretty thin, so our store numbers wouldn’t fare very well that day.
So, what did we do to boost our margins? We would do our best to upsell the better wiper blades, as well as offering washer fluid and other add-ons along with the wipers. For SUVs and wagons, we would always ask them about the rear wiper blade. Experience has taught me that many customers will neglect that small rear wiper blade, so it’s important to ask.
Our final tip in this category is to tell your customers about the benefits of using a washer fluid with a de-icing formula. Many customers aren’t aware of how this type of washer fluid can help them day-to-day, and it’s an easy add-on sale.
Belts & Hoses
This final category will only represent a small percentage of your winter sales, but it’s important to be aware of what you can expect. Belts and hoses can become brittle, crack or break altogether when the temperature drops. Modern modular hoses usually will have plastic connectors or tees that are especially susceptible to the cold, and if they break, the customer will need to buy the entire hose. It’s important for your customers to check belts and hoses for signs of wear or damage before the winter weather hits. It’s much better to catch this sort of issue early, rather than wait until the vehicle breaks down on the side of the road.
I had a few customers who would stock up on detailing supplies once the weather started to turn. They told me that they would wax their car before the snow came so the paint would be better-protected from the elements. These days, ceramic coatings are available that do an even better job of protecting the paint from the hazards seen during the winter.
So, take a walk around your store and think about what you expect to see selling this winter. Come up with a game plan for how you can maximize your sales numbers heading into the winter season, and what types of add-on sales opportunities you can find.
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