Responding to a growing trend toward low-cost, low-quality and counterfeit replacement parts, the Automotive Aftermarket Suppliers Association launched its Know Your Parts campaign a year ago. The Heavy Duty Manufacturers Association, which like AASA is an affiliate association of the Motor and Equipment Manufacturers Association, is working on a heavy-duty version.
We asked representatives of these efforts to tell us more about the campaign and the issues behind it: Steve Handschuh, president and COO of the AASA; Tim Kraus, president and COO of HDMA; and Jack Cameron, AASA vice president and executive director of the AASA Know Your Parts campaign.
Q: Why is it so important for vehicle owners, distributors and technicians to "know their parts"?
A: Low-cost, low-quality parts pose a potential threat to the safety of the motoring public and repair professionals, and threaten the good name and reputation of the entire aftermarket supply chain - whether automotive or heavy-duty.
The Institute for Research in Public Safety at Indiana University conducted an in-depth study of 420 fatal traffic crashes from 2005-2007 involving automobiles, motorcycles, vans, light trucks, and sport utility vehicles. The results revealed that 25.2 percent of these cases had definite, probable or possible vehicle defects that contributed to the cause of the crash or increased its severity.
Defective parts were the definite cause of the crash in 18 percent of the fatal crashes. Personal injury to the technician when installing or using inferior, low-cost products also is an important consideration. Many catastrophic failures happen immediately after the part is installed or when the vehicle is started - potentially unleashing lethal projectiles in the bays.
In addition to these safety considerations, low-quality parts are a threat to an independent parts or service facility's most valuable asset: its reputation. One bad experience can result in a lost customer for life, and word-of-mouth negative publicity can be even more costly.
Comebacks can be deadly to the bottom line for any shop owner. Doing a repair more than once wipes out all profit from the initial service visit.
Repeat repairs are especially costly to the commercial vehicle industry. The downtime when a truck is stuck in the shop to replace low-quality parts - or worse yet, repair damage due to these parts - is also deadly to the truck owner's bottom line.
Q: Why did you decide to launch this campaign at this time?
A: The Automotive Aftermarket Suppliers Association initiated its Know Your Parts industry awareness and education campaign to preserve the good reputation of the independent aftermarket and prevent commoditization of the industry through promotion of quality parts from full-service aftermarket suppliers.
Perhaps the greatest risk of this growing trend toward low-cost, low-quality products is the lasting effect it may have on the independent automotive and heavy-duty aftermarket and all the channel partners which share this market space.
Other trends have made lasting changes on the American landscape:
- Mega-discount super centers have replaced locally owned "mom and pop" stores.
- Full-service gas stations gave way to self-service convenience stores as value-added services gave way to lower gas prices.
- Fast food fed the U.S. appetite for low cost and convenience
- The quest for "low, low prices" has filled retail store shelves with low-cost "generic" products.
The aftermarket industry is headed down the same slippery slope.
It is important to note the fundamental difference in generic consumer goods versus vehicle replacement parts. Consumer goods generally list ingredients on the package and also display a message comparing it to a brand name product. This is not the case with aftermarket parts.
An aftermarket part's quality cannot be determined by visual inspection. While a generic part may look exactly the same as its name brand counterpart, it's what's inside that counts - the quality of steel, other internal components, etc. - and who stands behind that part.
Q: How much of your campaign is aimed at the commercial medium- and heavy vehicle market?
A: AASA launched its Know Your Parts just one year ago at the Automotive Aftermarket Products Expo. The campaign concentrated in the automotive aftermarket in the beginning, but AASA is working with the Heavy Duty Manufacturers Association to develop a similar campaign on the issue of low-quality parts in the heavy-duty market.
Previously, the heavy-duty market did not attract as many low-cost, low-quality parts distributors as the automotive aftermarket due to its narrow distribution channel and inaccessibility.
Truck manufacturers, suppliers, independent distributors, truck dealers and truck operators maintain closer communication than in light-duty automotive parts market through supply chain relationships. However, because of factors such as the economic downturn, pricing pressures and the increased presence of industrialization overseas, both light- and heavy-duty markets are experiencing a spike in low-quality parts.
Q: You're using the term "full-service supplier" in this campaign. Tell us more about this term.
A: Just as all parts are not created equal, neither are all suppliers. A full-service supplier does not sell on price, but rather on an entire program. Essential services provided by full-service suppliers include:
- Sales representation / manpower
- Industry standard cataloging
- Regional service centers / inventory availability
- Marketing support and programs
- Product specifications and quality control
- Product liability and IP protection
- Technical support and training
- Product research and development
Full-service suppliers make substantial investments in bringing high-quality products to market. Most of these services and investments are reflected in the product's selling price rather than an add-on cost.
Q: What consequences might distributors face if they sell substandard-quality parts?
A: Many of the low-cost suppliers offer nothing in the way of support or returns. Order turnaround is in measured in weeks or months, certainly not days. Special orders and overnight shipments are simply not possible. Returns are cost-prohibitive if not disallowed.
Liability is a major consideration, especially for resellers who directly import products. Many resellers mistakenly believe they will not be liable for any injuries resulting from a defective product because they are not involved in the manufacturing process of the product. That is not the case. When parts are directly imported, the reseller is liable.
Federal agencies and a number of states are prosecuting resellers for distribution of unsafe products - such as the imported tires, pet food and other products in the headlines a few years ago.
Resellers can face the loss of customers by offering only low-cost parts. Market research by IMR Inc. demonstrates brand loyalty among technicians and shop owners. When asked what they do when a supplier does not carry the brand requested, 62 percent said they call another store.
Q: What can a distributor do to make sure he "knows his parts"?
A: Distributors have a vital role to play in spreading the word to Know Your Parts. First, they can source parts from trusted full-service suppliers and support these suppliers' programs. Second, they can help educate repair professionals on the potential dangers of low-quality parts and help them promote brand name products to their customers.
Distributors should evaluate all aspects and services when choosing a supplier, regardless of the product category or level of performance required. Distributo