With the results of the 2008 historical presidential election fresh on everyone’s mind, AAIA Town Hall 2008 presenters redirected attendees' thoughts to several topics that are central to the industry’s ability to overcome today’s economic challenges. Moderator Kathleen Schmatz, AAIA president and CEO, led a group of industry expert panelists in a discussion that zeroed in on how the aftermarket can turn these challenges into some very real aftermarket opportunities. “We’re on the verge of the greatest aftermarket boom we’ve ever had,” she remarked.

Sponsored by NASCAR Performance, AAIA Town Hall 2008 panelists were:

- Tom Kloza, Chief Oil Analyst, Oil Price Information Service

- Frank Ordonez, President, Delphi Product & Service Solutions

- David Portalatin, Director of Industry Analysis, The NPD Group, Inc.

- Tony Zanders, President, Heritage Auto Repair and Chair, Car Care Professionals Network (CCPN)

The industry VIP panel brought to center stage a range of topics including, record gas prices and the resulting effect on consumer driving and buying habits, the need for consumer education about the benefits of vehicle maintenance, how the aftermarket can benefits from new car dealership closings, and the opportunities that lie ahead for independent repair and service operators who view future vehicle technology as service opportunities.

Kloza took the floor first and commented that “our Elvis in the oil trading business is volatility,’ noting that extreme fluctuations in prices – from $39 a barrel/$1.75 per gallon to $150 a barrel/$4.25 per gallon – prompts uncertainly in the consumers’ mind and brings to the forefront a strong desire for them to save money at the pump. Truly knowing your customers and gaining a competitive advantage in the market hinges on helping restore consumer confidence and achieving their gas savings goals.

Portalatin discussed how consumers’ dependence on the automobile is a key driver in how their dollars are spent, and their driving behavior influences a significant portion of their total buying power. With consumers being on a constant “yo-yo,” in terms of gas price fluctuations, there will be no immediate return to former driving habits.

Citing the example of Starbucks’ penetration into a mature coffee market, Portalatin told attendees the opportunity for growing market share is out there; you can grow your business by reinventing your products, bringing unique offerings to consumers and reinventing the purchasing experience. He stressed the importance of continually advertising your message, differentiating your products and delivering a true value proposition. Engage with customers, and educate them about why preventive maintenance is money well spent in extending the performance and life of their vehicles.

Ordonez commented that the future of the aftermarket is “as robust as it can be,” and that to succeed aftermarket players must adapt, change and move forward with it. Technological advances and new content in today’s and tomorrow’s vehicles, particularly in the areas of being Safe, Green and Connected, represent “real” service opportunities for techs who are properly trained and shops that are well equipped to maintain them.

Advancements such as adaptive cruise control, pre-crash sensing, lane departure warning, CNG, HEVs, gasoline direct injection, hybrids, electric power steering, safety and security enhancements and vehicle entertainment systems all represent great revenue streams for repair shops that ramp up to “seize” the service opportunities.

The technology evolution that we’re all witnessing is just the beginning, according to Ordonez, who added that “today’s hybrid is the Model T of its era.” There will be continued enhancements to hybrids including size, power and packaging improvements in the next two years.

Lastly, Zanders discussed the challenging service scenario at his shop, Heritage Auto Repair in Meridian, ID. While he’s seeing about the same number of vehicles in his bays, consumers are spending less, noting that the average ticket at his shop has declined by about 30 percent over a nine-month timeframe. This shift in consumer behavior regarding vehicle repair, prompted by today’s tough economic climate, also has customers price shopping more than ever. There are a lot of positive signs and room for growth for shops that employ good business practices and educate customers on the value of preventive maintenance. Shop owners and techs also need to be better educated by their suppliers that they, too, should be maintenance-minded rather than focusing only on break-down repairs.

Following their formal comments, panelists answered questions from Schmatz.

Some key points came out of this Q&A session:

Car dealership closings represent opportunities for suppliers and distributors to ramp up their on-line parts sales potential to the aftermarket.

The aftermarket has proven time and time again that it can acquire the necessary training on new vehicle technology, but that role should be shared by manufacturers who need to offer training as part of their value equation to the aftermarket.

Dealer consolidations will provide opportunities for the aftermarket to obtain technicians who are already trained.

Consumer education about the benefits of proper vehicle maintenance is critical to restoring their confidence and moving the vehicle service needle.

The aftermarket is more than capable of fixing the cars of tomorrow.

In closing, Schmatz challenged the audience to work smarter, talk louder about the merits of regular vehicle maintenance in extending vehicle life and boosting system performance, work harder to gain market share, especially in this era of car dealership closings, adopt and embrace new technology, and reinvent yourself, like Starbucks.