Aging vehicle parc means increased aftermarket business

AKRON (Feb. 28, 2017) — Automotive service shops have many reasons to be optimistic in 2017, according to executives from several component suppliers, as a greater population of vehicles are coming of age for replacement of key parts.

Suppliers of OE and replacement brakes and ride-control components agree that the aftermarket should see the beginning of a three- or four-year replacement cycle based on several key industry trends, including:

• The average age of vehicles is 11.5 years, due to better-built models and people holding on to them longer;

• New car loans now extend up to seven years;

• A glut of cars coming off of two- and three-year leases is expected to hit the used car market this year; and

• Buyers of used vehicles are holding on to them for four to six years.

Impact on shocks

These trends bode well for the shocks and struts market, which has experienced slumping sales in the past few years at the same time that new car sales rebounded to pre-recession levels, said Mac McGovern, director of marketing and training at KYB Americas Corp.

• This piece appears in the Feb. 27 print edition of Tire Business.

Because consumers are holding on to their vehicles about two years longer on average than they did 10 years ago, Mr. McGovern said, vehicles are reaching a "sweet spot" of a later but broader period of replacement needs.

That fact has KYB looking at what type of vehicle owner is willing to pay for premium replacement components, he added.

Technological advances that have brought about everything from electronic stability control to front-end collision sensors are impacted directly by mechanical components and whether they work well, according to Mr. McGovern.

Hence, auto service professionals need to understand and communicate to consumers that if a ride-control system is not at OE design performance, then safety systems also will not be at OEM design performance, he said. The computer is the focal point of the vehicle, and its software can't be altered.

Comparing a vehicle computer to "big brother," Mr. McGovern explained that if a computer could talk, it essentially would say, "I'm not going to keep your safety systems operational if you don't invest in your car."

"You can't just let it go because it squeaks or rattles," Mr. McGovern said, adding that OE-quality shocks and struts are already in the aftermarket and will become more significant in replacement because they were designed to work with a car's safety systems.

Consumers often can't detect the potential degradation of steering, stopping and stability because shocks and struts wear out gradually, according to Mark Boyle, Tenneco Inc.'s marketing director for North America Aftermarket. Tenneco supplies Monroe-brand shocks and struts to the aftermarket and is a manufacturer of OE ride-control components.

"That's why it's important for tire dealers and other service providers to perform a comprehensive ride control inspection—including a test drive—as part of every service occasion," Mr. Boyle said.

KYB's Mr. McGovern also emphasized that auto service professionals need to understand that not only have ride-control systems changed, but consumers also have changed in that they want value for the money.

In the past, consumers looked for a relationship with auto service shops, and now they don't care about that, according to Mr. McGovern.

"Service professionals will lose (the sale) if they don't change and have a good value proposition to present to the customer," he said.

Both Tenneco and KYB offer training programs to keep auto service professionals up-to-date on technology and selling to the consumer.

Mr. Boyle said the Monroe brand offers extensive diagnostic and communication training to service writers and technicians to help them identify worn ride-control parts, then communicate the replacement need to the consumer.

He also noted that one of the advantages for dealers to join Tenneco's Expert Plus program is that they will receive an interactive display for the service counter that demonstrates the potential risks of driving on worn shocks and struts.

What can auto service professionals expect from the brake business?

According to Akebono Brake Corp., there easily should be 2- to 4-percent growth in brake jobs for 2017, and that wave should continue for the next two to four years.

And like ride-control components, brake-pad technology continues to evolve with the changes in vehicle design and driving dynamics, Tenneco's Mr. Boyle said.

"We have seen a strong shift toward premium-grade ceramic friction formulations, which provide cooler, quieter braking and longer service life," he said.

Borise Cota, Akebono's western regional aftermarket sales manager, said the rise of ceramic friction brakes as standard on the majority of OE applications has been the primary growth driver for ceramic friction in the aftermarket.

However, Mr. Cota noted that service shops should be aware that the next big change for the brake market will come in 2020 when federal regulations mandating no copper in brake formulations kick in.

Copper is a large part of ceramic friction formulations, he explained, and many brake manufacturers are moving back to low-metallic friction products.

Akebono is not moving in that direction and already is offering both OE and replacement ceramic friction brakes with elements that replace copper and meet the new standards, Mr. Cota said. He claimed they work just as well as copper formulations.

A large part of Akebono's marketing to the aftermarket is reminding service shops that when customers comes in for the first brake job on their vehicles, they expect the new brakes to perform as well as when the vehicle was new, he said.

And with so many consumers now shopping for parts on the Internet, Mr. Cota said it is easy for consumers to check pricing on brakes and check social media sites for reviews on the parts' performance.

"If a shop is going to charge a premium price for a part, it better be a premium part to begin with," Mr. Cota said.

Consumers want to know what types of brake pads are going to be installed on their vehicles, and it isn't difficult for service writers or technicians to offer good-better-best choices in pricing and performance, he said.

"(Shops) must have options for the vehicle owners but they must explain the performance and expectation differences for each level," Mr. Cota said. "Don't pre-judge the customer."

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Vera Linsalata is an Akron-based freelancer and former Tire Business staff reporter.