Every
Halloween, retailers, jobbers, installers, distributors and manufacturers of
aftermarket parts and speciality equipment rub shoulders in Las Vegas. The AAPEX
(Automotive Aftermarket Products Expo) and SEMA (Speciality Equipment Market
Association) show attracts some 86,000 visitors to see a mind-boggling array
of new products and concepts for the aftermarket. Here, Matthew Beecham reports
on how Delphi is shaping its aftermarket business and highlights a handful of
the eye-catching personalised accessories showcased.


US aftermarket retail value set to rise 28% by 2005


More than 5 million people are employed in the US by the 400,000-plus automotive
aftermarket sector businesses, according to the Motor & Equipment Manufacturers
Association. Researchers at the Automotive Aftermarket Industry Association
(AAIW) estimate the US motor vehicle aftermarket was worth $245bn in retail
terms last year, of which the total automotive aftermarket was worth $168.3bn
(comprising DIY products, tyres and lubes and service repair), heavy duty aftermarket
worth some $61.5bn, tool and equipment aftermarket $7.5bn, trim aftermarket
$5.3bn and paint and body equipment worth about $2.9bn.


Industry analysts predict the US aftermarket could be worth $315bn by 2005.
Sources of growth include continued growth in demand for in-car electronics,
greater need for support services such as vehicle diagnostic tools, opportunities
on the retail side arising from e-commerce and ageing cars, i.e. the average
age of a passenger car in the US is getting older, up from 7.5 years in 1992
to 9.1 years in 2000. In fact, analysts now reckon that there is some $60bn
worth of ‘undone vehicle maintenance’ out there in the 150m North American passenger
car parc. But finding ways to capture this market is key to growth. Electronics
is also a fertile area, representing 22% of a vehicle’s value today, rising
to about 40% by the end of the decade. This will drive significant growth in
the aftermarket for replacement products and trigger new service and service
technology opportunities.


Although it’s a major financial component of the nation’s gross national product,
the industry is rapidly consolidating. The AAIW points out that 63 mergers and
acquisitions occurred in the US auto parts and accessories industry last year.
Although the number of deals actually fell year-on-year, the value of deals
in 2000 was substantially higher than in 1999 or any other recent year. At the
retail level, the number of DIY and independent installers is dwindling as speciality
outlets and new vehicle dealers proliferate. The independent repair sector is
getting smaller, too. At the distribution level, there appears more distributor-retail
integration and distributor-OEM co-operation. On the manufacturing side, meanwhile,
the small independents are reducing in number as more inter-company networks
form. In addition to consolidation, thinner margins, the shortage of trained
certified technicians and the rate of economic downturn are also nagging issues
facing the industry.


Delphi bolsters its presence in the electronics aftermarket

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Despite its dominance on the OE side of the auto business, Delphi Automotive
Systems is a relative newcomer in the aftermarket. The company entered the global
aftermarket in 1999 offering traditional replacement parts.





Delphi is aiming top achieve sales of $4bn by 2005, from $2bn this year. To
help it get there, Delphi recently extended its aftermarket product line up
to cover four more categories: fuel and air delivery, sensors and actuators,
batteries and thermal. Next year, Delphi will broaden this range further to
include emissions, switches and connectors, solenoids and relays, ignition,
steering and speciality products. As of today, its line-up of vehicle electronics
for sale includes: electronic fuel pumps and modular reservoir assemblies, fuel
injectors, oxygen sensors and its Driver Selectable Ride System. Over the next
18 months, Delphi is planning to leverage its OE capabilities to introduce parts
and service tools for its E-Steer system, QuadraSteer, MagneRide, drive-by-wire,
integrated chassis dynamics. Beyond that, the company is looking to launch game
changers such as solid oxide fuel cells and non-thermal plasmas exhaust after
treatment. On the thermal side, Delphi will introduce a new range of heating
and air conditioning products in January 2001, focusing mainly on the high value,
hard to get product range. That includes Delphi-manufactured radiators, evaporators
and condensers. A few months later, the company will add heater cores, accumulators
and dryers to its HVAC range.


“The ground work that we are laying here is our ability to bring all of Delphi’s
vehicle electronics to the independent market place,” said Ted Thacker, general
director of sales and marketing for Delphi Aftermarket. “We have a lot of catching
up to do because there is a huge number of underhood sensors actuators, controllers,
all-electronic driven parts that Delphi has in its portfolio that we have still
to make available in the aftermarket. The average vehicle in 2010 will have
somewhere between 200 and 300 electronic sensors on it measuring everything
from steering wheel angle to the body temperature of the occupants. We are positioning
the Delphi brand to be the recognised electronics expert. In short, we want
to be the first brand mechanics think of when they need electronics for the
vehicle.”


Delphi wants to be the technical integrator for aftermarket service, bringing
together the information, diagnostics and training needed for today’s technicians
just as they are the vehicle integrators for the original equipment market.
Last year, Delphi introduced its conceptual ‘Garage of the Future’ at Automechanika.
The web-based concept allows customers to request quotes, schedule services
and run electronic diagnostic checks on a vehicle. Frank Ordonez, general manager
of Delphi’s aftermarket business ran through an example. “Should a vehicle,
which is continuously performing self-diagnosis, detect a potential problem,
it could use telematics to automatically send a message to a service support
centre. All of the pertinent diagnostic data will be communicated from the vehicle
to the service support centre, where the problem is confirmed. Within minutes,
the service support centre sends a message to the driver, again using the car’s
telematics. We could, for example, determine that the car needs immediate attention,
and using GPS, locate the car and the nearest service station, give the driver
directions to get there, and send the vehicle’s diagnostic information to the
service station. The car goes into the queue for service, is assigned to a technician,
parts are ordered, and a courtesy car arranged – all before the customer even
arrives. State of the art service technology will then speed the repair. Once
in the shop, the technician has a portable computer at his workstation where
he can wirelessly connect to the vehicle’s communication port and verify vehicle
system data. The technician can get a schematic of the system, identify the
exact location of the part, even access a technical hotline -all without ever
opening the hood or touching a part.”











Frank
Ordonez

But tomorrow’s garage may struggle to find well-trained mechanics. “There aren’t
too many mothers in the US who are telling their children to become an auto
mechanic right now,” said Ted Thacker. “But quite honestly, a good technician
in the US is making $60 – $70 per hour for doing diagnostic processes. But even
so, we do have a problem in attracting people to it. But I think our Integrated
Service Solution brings greater efficiency to the process. Around 40% of a technician’s
time is spent away form the car, looking up information, trying to talk to people.
We also know that around 18% of all parts sold are returned, resulting from
misdiagnosis. We can solve that inefficiency. Our tool brings diagnostic information,
technical data and just-in-time training to the technician at the vehicle when
and where he needs it. We’re bringing an efficiency process to this that makes
them get through more work.”


Delphi also used the AAPEX show to begin taking orders for its aftermarket
consumer electronics. “Industry studies show that Americans spend 500 million
hours in their vehicles each week,” said Frank Ordonez. “Consumers are looking
for technology to make that time more productive and enjoyable, in the safest
delivery method possible. One of the most exciting products is the Delphi Communiport
Mobile Productivity. Our research with consumers shows that the most desirable
feature of telematics today is the ability to use voice commands in the car
to access cellular phones and navigation. (This technology) leverages our expertise
in telematics, along with our partnership with MobileAria, the provider of subscription
services. With the mobile productivity centre, you can connect your laptop,
PDA, and cell phone to the vehicle. Using Bluetooth wireless technology, you
can access real time traffic, navigation, voice mail and address book information,
all while keeping your hands on the wheel and your eyes on the road.”


Sounds too good to be true. With the speeches over, we just had to try it out
for ourselves. Once seated in the demo car, we found Steve Wollenberg, vice
president of MobileAria’s business development telematics services enthusing
about his product to a bunch of technocrats. “The great thing for the consumer
is that they don’t have to spend $2000 on a navigation systems and then upgrade
their map data every year for another $100 every year, but they can go back
to the server for updated information. That way, they are always get the very
latest information,”


He then showed just how the system handles a request to dial a number. But
instead of listening to a flat robot, we were surprised to hear an American
woman’s voice responding with some intonation when asking a question. Here’s
what they said.


Steve Wollenberg: Main menu.


Computer: MobileAria main menu.


SW: What can I say?


Computer: You can say e-mail, voice mail, phone call, traffic directions,
business finder, news or stocks or where am I, main menu or access.


SW: Phone call.


Computer: MobileAria telephony.


SW: Don Runkell.


Computer: Do you want to call Don Runkell at office?


SW: Yes.


Computer: Dialing.


And so it went on. Naturally, the partners are expecting a pretty rapid take
up on launch later this month but were coy about releasing monthly subscription
charges. It’s likely to be in the range $20 – $30. The hi-tech savvy consumers
will be among the first target group as well as real estate professionals/estate
agents.














Delphi’s
Mobile Productivity Centre




Only in America: SEMA stars


Founded in 1963, SEMA (Speciality Equipment Market Association) boasts 4,800
members. The SEMA show serves a $24.86bn industry – that’s more than Americans
spent on golfing and golf equipment last year. The show itself is incredibly
popular, too. Last week, some 86,000 visitors strolled past 1,300 stands packed
with attention-getting products for those who want to be seen and heard while
cruising the streets as well as those who are looking to make their vehicle
more comfortable and convenient. Here are just a handful of some colourful products
on offer.


· Bras for cars


For $135, Colgan are offering a carbon fibre two-piece bra (or front-end mask
to be precise) that will protect a car or truck’s nose from stone damage. Colgan
introduced bras for the automotive industry back in 1961.


· Wheel weaponry


Yokohama used the show to launch their Panda Spec tyre. The company reckons
that ‘this new generation of high performance weaponry will again unleash the
beast in vehicles’. Although that remains to be seen, Yokohama’s new tyre certainly
grips the road better and is offered in a few more sizes.


· Bag a video


Audiovox used the show to present their VBP-3000 ‘Video-In-A-Bag’ entertainment
system that can be plugged into a 12-volt socket in the car or home. With two
detachable five-inch flip-up LCD screens, you can watch a video while holding
the unit. Each screen features two built-in speakers, volume and brightness
controls, a TV/video input switch, a headphone outlet and an A/V input connection.
The whole $650 kit fits inside a groovy looking bag that hangs between the two
front seats.


· Seatbelt for stuff


The Travel Play Co has introduced a passenger seat parcel restraint system.
It’s like a seatbelt but designed to prevent your briefcase, maps and anything
else that you care to throw on the passenger seat from sliding off while on
the move. For $23, the so-called StufStop fits to any bucket seat, secured around
the back with velcro.


· Glow-in-the-dark pedals and floor mats


StreetGlow introduced some racing-look pedals featuring neon inside. Which
can be turned on for special effect at night. Samson Performance Products, meanwhile,
displayed their Alumimats. For $165, you get four floor mats made from highly
polished diamond-plate.






















To view related research reports, please follow
the links below
:-



Delphi
Automotive Systems Corporation Company Profile (download)




World
automotive components: Market prospects to 2005




New
technologies for automotive safety (download)