Our suspicions have been confirmed, people are driving old cars longer. R.L. Polk & Co. conducted an analysis of more than 249 million vehicles and for the 12 month period ended June 30, 2008 they concluded that, “Americans are keeping their cars and trucks on the road for record periods as the economy has weakened.” (As reported in Automotive News.) For cars, the median age rose from 9.2 to 9.4 years, and the median age for all-types of trucks rose from 7.3 to 7.6 years. Since these are median numbers, statistically speaking there are lots more old cars and trucks driving around.

This got me to thinking, with so many old vehicles on the road, spare parts sales (for OEMs and dealers) should be excellent. But from what we’ve been hearing, they’re not. Dealers are hurting on all fronts, including part sales. Keith Crain of Automotive News discusses this problem as he describes the need for dealers to get back to basics. “For dealers, it means taking another look at the service department and making sure it’s taking advantage of every opportunity to maximize revenue. Wholesaling parts is something that most dealers don’t bother doing. Just letting the phone ring is an easy way to take orders. Why not put a couple of trucks on the road and look for new business?”

Crain’s recommendation for door-to-door parts sales seems archaic; it totally ignores the opportunity of the Internet. Unfortunately, given the poor state of dealer support his suggestion is a viable, but expensive, alternative. Without advanced solutions from the OEMs, selling parts door-to-door is the only way dealers can expand their parts business. According to a Carlisle & Co. survey mentioned in last week’s blog, dealers have been openly criticizing OEM technical support but it’s unclear if OEMs are listening. Dealers looking for an internet storefront may try to use a 3^rd party parts catalog but those can be expensive, fail to integrate with dealer management and inventory systems, and are notoriously inaccurate. Dealers need a comprehensive OEM solution that is always up-to-date and improves their ability to develop/expand their wholesale parts business.

Today, technology is available that allows OEMs to easily deploy/update online and offline parts catalogs and service information. Unfortunately, many manufacturers are satisfied with capturing only 20% (or less) of the spare parts for their products. OEMs don’t seem to want to compete for parts sales against big store fronts like AutoZone. But they should, because the storefronts assume success is tied to the convenience of their location and the price of their parts, which totally misses the point that part sales start in the service bay. If OEMs gave dealers access to software that quickly identified the right problem and ordered the right parts, both the OEM and the dealer would capture more market share. (There are two parts to this process, getting the correct diagnosis and identifying the right parts—both are critical to a successful solution.) Furthermore, dealers could use such a system to provide greater value to independent repair facilities (than storefronts), allowing them to capture more wholesaling business. The key is to have high-quality content within the solution.

Last week’s blog pointed out that dealers are happy with the OEM technical content. What isn’t good is the way that content is deployed—it’s not making dealers more efficient/productive. There are solutions to this problem—a few forward thinking OEMs, in various industries, are using technology to improve customer/dealer support and aftermarket sales. Now it’s simply a matter of time before other OEMs make this a priority. For more thoughts on how to solve this problem, take a look at these blog posts:

• Modernize Parts Purchasing or Miss Out
• The Road to Recovering Profits – Aftermarket Advice from an Analyst
• Bridging the Service and Parts Silos
• Simplifying Parts Sales; Make it Easy For the Customer