VEHICLE TECHNOLOGY
Front bumpers from a 2005 Jeep (left) and a 2015 model (right) illustrate that while cosmetic changes may not be readily visible, what is underneath and attached in the form of sensors on the newer model is the new bread-and-butter of auto recyclers. You’ll have to be prepared what to look for to make it profitable.
mantle. A sensor on the bumper cover may now be more valuable than the whole bumper. Without knowledge and training, one could easily crush sell- able inventory, or if dismantled and then not stored properly, ruin it.” To track these parts, inventory management systems like Hollander are dedicated to offering an advanced inventory module to add-on to what they already offer. “As providers we have to anticipate these and provide solutions to connect our customers better to their customer.” Aquestion that comes to mind is:Total loss vs. par-
T
tial loss? With current conventional wisdom and less accidents, wouldn’t insurance companies just total cars with such advanced systems? Arfi seems to think not. “In the total loss vs. partial
loss scenario, we do not anticipate the ratios to change insurance company protocols for total loss evaluations. We monitor parts on unique cars in 78 countries. There will still be plenty of interchange- ability of those parts in these new car parts. There would also be the question of what happens to these robo-ELVs? Upcoming environmentally-
Challenges & Trends in the Future of the Automotive Aftermarket
he question is, when will all this technology hit automotive recyclers? The good news is, you have some time. The bad news is you must start today to plan for this new reality in order to be ready to profit from it. Here are some stats to consider from Openbay Overdrive (
openbay.com), a source for today’s car care and industry news:
• The “aftermarket sweet spot” refers to those vehicles that are driving the most aftermarket repairs. In 2015, we view vehicles aged 6-11 years old to be within that “sweet spot,” but that will change. By 2020, there will be about 76 million units of vehicles aged 16+ years.
• Between 2015-2020: > Vehicles that are new-to-5-years old will increase by about 24% > Vehicles that are 6-11-years old will decline by about 11% > Vehicles aged 12-or-more-years old will increase by 15%.
• Imports are growing. Today, 57% of vehicles on the roads in the U.S. are domestic. By 2020, that will be reduced to 53% domestics. Im- ports will grow from 43% to 47% – there are now about 111 million imported vehicles on U.S. roads, and by 2020, that will look more like 122 million units.
• There’s a trend toward large franchise auto repair businesses, which have smaller shops rolling up into them. That’s a good opportunity for profitable businesses on the service/seller-side.
• The aftermarket world is going online, and the marketplace is chang- ing. Parts are being sold online, and service is being sold online.
• By 2020, 80-90% of all new vehicles will have embedded telematics. • There will be major changes in powertrains. Turbochargers have in- creased in popularity, and you’ll see that explosion continue. New 4-cylinder turbos are delivering manufacturers with the fuel efficiency they need, without having to rely on hybrid and electric vehicles. The trend toward turbos is favorable for the aftermarket, noted Malcolm
Sissmore, Sales Director, Delphi Products & Service Solutions, because “turbochargers require spark plug changes about 2-3 times more often than naturally aspirated vehicles At the same time, those little engines have a lot being asked of them, and could see premature failures, and if that happens out of warranty, that’s also good for the industry.”
• “China is an explosive market, where 4.3-years is the average age of a car. There’s only one car for every 117 people. If you want to do something new, go to China,” said John Washbish, MAAP, President & CEO, Aftermarket Auto Parts Alliance, Inc., citing IHS Automotive research. (IHS Automotive provides the actionable insight to make better decisions that drive better results through extensive re- search in various global markets, including to automakers/OEMs.
www.ihs.com/industry/automotive.html).
• E-tailing: “It will go in that direction,” said Mark Seng, MAAP, Global Aftermarket Practice Leader, IHS Automotive. “In this world, data is king, more so than it is now. Information on the supply chain, up-to- date pricing, discounts, pictures, and all the stuff that sells your brand beyond what competitors offer, is key. The content-management de- partment is not a call center. It’s a revenue manager,” said Sissmore, noting that Delphi ensures it has pictures, specs, 3D images – “It’s going out in all sorts of forms.”
Read more at
https://www.openbay.com/blog/challenges-trends-in-the- future-of-the-automotive-aftermarket/ —Openbay Corporation © 2016. All Rights Reserved.
36 Automotive Recycling | November-December 2016
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