0 Flares Twitter 0 Facebook 0 Google+ 0 Pin It Share 0 LinkedIn 0 Buffer 0 Email 0 0 Flares ×

I have friends and family in the car sales and parts industry and I guess if you had asked me to invest in this sector a few years ago I would probably have thought twice ( or more ! ) about doing so but I would have been  wrong 😉

In 2009 and 2010 both the U.S. and the U.K. had ” Car Scrappage ” schemes ( ” Cash for Clunkers” in the U.S. !! ) in an effort to boost new car sales in the face of the recession.

These appear to have boosted the existing trends and R.L. Polk & Co. of the U.S. says:

“As vehicles age and consumers continue to
hold onto them longer, there are significant opportunities for repair services and parts demand for the aftermarket as vehicles are falling out of warranty as they age,” said Mark Seng, vice president, sales and client services, aftermarket and commercial vehicle, at Polk. “The increased complexity of vehicle repairs also presents a business opportunity for service professionals as traditional do-it-yourself consumers are less likely to attempt complicated technical work on their vehicles.”
Dealers will have an opportunity to develop programs geared toward service loyalty marketing as they seek to hold onto a growing base of customers, according to Polk. “The trends we’re seeing suggest great motivation for dealers seeking to maintain a longer-term relationship with their customers,” said Lonnie Miller, vice president, marketing and industry analysis, at Polk. “Service-oriented loyalty programs can significantly contribute to improving business and overall loyalty among customers,” he continued.
Polk expects conditions facing the U.S. automotive industry today to remain through 2010 and expects trends for scrappage and vehicle ownership to continue for at least another year. This assessment is largely based on current industry dynamics, coupled with Polk’s annual forecast of a moderate increase in light vehicle sales to 11.5 million units this year. It also assumes a general upward trend for vehicle scrappage rates as high volumes of older vehicles continue to retire from the U.S. fleet. “
( I am assuming that the U.K. is following similar trends to the U.S. ).
People are holding on to their cars and vans ( light vehicles ) longer ( 2004 – 8.6 years, 2010 – 10.2 years ) but also the scrappage percentage is rising ( from approx 5 to 6 % between 2005 and 2010 ) .
” These trends are supported by a number of factors, including the economy, limited financing and leasing options available in the market, extended warranties offered by OEMs, and improved vehicle durability and quality of vehicles. They also provide opportunity for various business segments of the industry” says Polk.
Whilst the variations are considerable car parts come from one of two places and get fitted in one of two ways:
They are either ( originally ) from a manufacturer ( either the ” original ” or ” Genuine ” one or an ” Aftermarket” or what is called in the ICT industry a ” compatible ” one ) or they have been ” recycled ” i.e. they are from a crashed or scrapped vehicle.
The parts are fitted either by a garage/service provider or by an unqualified individual, likely to be the vehicle owner.
Certainly the comment made by Polk about vehicle complexity is valid. Some faults cannot be identified and resolved without hi-tech ( expensive ) equipment and skilled operators.
The ” route ” that the parts take between manufacture and fitting is varied. Broadly speaking, these days, there is an ” Internet route ” and a ” Physical route ” but there will often be a mixture of the two.
For example the vehicle owner might go to a garage, who buys from a “distributer ” , who buys ( mainly ) from the manufacturer.
or
The vehicle owner might do the work himself and obtain the part from an online website like eBay, a car parts provider/car breaker or a forum member.
These might be viewed to be the ” extremes ” but there are very many permutations for the garage/service provider route and for the self repairer route.
An individual could go to:
– The Internet ( eBay, online parts company, breaker or forum )
– A car breaker ( physically )
– A general car parts provider ( a physical outlet )
– A manufacturer’s dealer ( physical outlet )
A garage/service provider could go to:
– A car parts provider ( distributor )
– A manufacturer dealer
– The Internet ( as for an individual )
As a generalisation ” older ” people might tend towards the ” physical routes ” whilst younger people might be more inclined toward the ” Internet ” routes.
As younger, more Internet literate, people join dealers/service providers ( SP’s ) they will be more aware of the potential Internet based routes although they may be constrained by existing procedures from using these routes.
Certainly younger people, doing their own repair work, are very likely to use the Internet route.
Dealers/SP’s using the physical routes are likely to be marketed and sold to in a ” physical manner ” e.g. snailmail shots, telephone sales.
However, it is clear that the Internet channel is getting more and more popular, utilised and sophisticated.
A brief analysis via Google reveals the following:
A Google search on ” Car Parts U.K. ” gives 1st page results as follows:
Paid search ( Pay per Click / Google Adwords )
1. Euro Car Parts ( ECP, Genuine and Aftermarket parts online or physical sies )

2. 1st Choice spares ( New – Genuine and Aftermarket – and Recycled, online only ? )

3. CPR ( New and recycled, online ? )
4. Comline ( New, online )
5. Find a part ( New, online )
6. Express Car Parts ( New, online )
Organic ( Free ) Search
1. ECP
2. 247 ( New, online )
3. carparts-uk ( New, online )
4. carpartsdirect ( New,online )
5. 1st Choice
6. Breakeryard ( New,Recycled, online )
A Google search on ” LandRover Clutch parts ” gives 1st page results:
Paid Search
1. ECP
2. EH Douglas ( Servicing/Repairs )
3. jgs4x4 ( New – Genuine and Aftermarket )
4. Rimmer Bros.
Organic/Free Search
1. Brookwell.co.uk ( New – Gen. and Amarket )
2. Rimmer
3. FamousFour ( New and Used )
4. landroverspares.co.uk ( Buckley bros. ) ( New Gen. & Aftermarket )
5. eBay
N.B. ECP has presence across both searches, ( the only one ), paid and organic – very strong Internet presence. 1st Choice also appears in paid and organic search for car parts uk search.
Quite clearly some ” physical ” based companies have some work to do in terms of Internet presence.
The trends for people keeping their cars longer will undoubtedly lead to continuing demand for spare parts – new and recycled. It appears that supply for both new ( original and aftermarket  ) and recycled will also continue. New and recycled prices may trend down with competition and manufacturing efficiencies ( more research required ).

0 Flares Twitter 0 Facebook 0 Google+ 0 Pin It Share 0 LinkedIn 0 Buffer 0 Email 0 0 Flares ×