OE Channel’s Share Of Foreign Vehicle Aftermarket Dropping
By Gary Molinaro | April 7th, 2010 | Category: Perspective, Service Executive News | No Comments »Living in western Pennsylvania when I purchased my first car back in the late 1970s — a used Volkswagen Beetle — I took a little grief from my father and others in the neighborhood for purchasing a foreign car. And, about 15 years later, when I bought my first new car — a Nissan Sentra — there were many of my neighbors in northeastern Ohio who were not the least bit hesitant to remind me that I was putting many of my neighbors in the unemployment line by spending money on an import.
It’s important to remember that there was a time not that many years ago when these foreign buggies were seen as either something unusual or a threat to the U.S. economy.
Things are certainly different today. The top-selling nameplates are now from off-shore companies — many manufactured here by foreign-owned carmakers — and, though there are still diehards who are dead-set against Americans spending money on foreign nameplates, the landscape has changed enough to make import vehicles more than commonplace.
While American consumers slowly got comfortable with these imports, our own industry more grudgingly adapted to a market that required our manufacturers to provide coverage for these various import models — a considerable challenge considering changes during model years with multiple parts numbers for the same part and an explosion of nameplates and models.
It seemed like just a few years ago there was still discussions in this industry about coverage for imports as well as the challenge traditional shops had in servicing foreign nameplates. Anecdotally, many would say that the import automakers were the ones who were the most-reluctant to share repair information, some would say the Germans specifically were the least cooperative.
For many years, the import automakers held a unique level of owner loyalty, with many import nameplate owners doing their service work only at the dealership. That seemingly-solid hold seems to be melting away, and that is good news to traditional service providers.
According to information in its recent newsletter, Lang Marketing Resources said that the import OE channel declined in foreign vehicle product share from 2004 to 2009. And, despite an increase in foreign vehicle dealers during the five-year span of 2004 through 2009 (primarily among Korean carmakers), there was a drop from nearly one-third of foreign vehicle aftermarket volume flowing through the OE channel in 2004 to less than 30 percent of 2009 volume. The volume reduction, Lang reported, resulted from increased competition from other channels, particularly import channel distribution.
And, in the next three years, the OE import channel will suffer the largest decline in foreign vehicle product share during this span — dropping to just over one-fourth of 2012 aftermarket product volume for foreign cars and light trucks.
No, this doesn’t mean all the import parts and service sales that were being done at the dealerships will fall into the laps of traditional aftermarket providers, nor does it mean the import specialist channel will just wither away. Far from it, according to Lang Marketing, which said the import channel — defined as import warehouses and/or import jobbers — will record the largest increase in product share, soaring from less than one-fifth of the 2009 market to nearly one-quarter of 2014 foreign vehicle product volume.
And, at the same time, as Lang’s report pointed out, the traditional channel will moderately increase its foreign vehicle aftermarket strength between 2009 and 2014.
Over the past several decades, we have all learned to accept the imports. And, through consistent efforts, we have put ourselves in a position to service these vehicles adequately. The next few years may see the payoff for those decades of effort.
Gary A. Molinaro
Editor/Publisher
