A positive trend seems to be emerging among international buyers: a return to sourcing aftermarket products from North American suppliers rather than low cost countries (LCC) due to concerns about LCC product quality. This trend was reported during the “How’s Global Business” roundtable discussion by the Board of Governors of the Overseas Automotive Council (OAC) of the Automotive Aftermarket Suppliers Association (AASA).
As a regular activity at its meetings, the AASA OAC Board conducts a roundtable discussion of the latest business trends from around the world. Here are some global market highlights from its recent meeting:
Venezuela
The country’s marketplace is currently experiencing tremendous uncertainty due to the change in governmental control following the death of its long-time leader, Hugo Chavez, and its huge debt levels. The uncertainty in Venezuela also is impacting business in many other Latin American countries.
In the Venezuelan aftermarket, orders are starting to increase again after being almost non-existent for the last four months, reflecting a huge pent up demand for inventory. An additional cause of concern in the Venezuelan economy is the conversion from the current currency auctioning process of CADIVI to the new SICAD program. For details click here: http://reut.rs/19PrzAS
Mexico
The Mexican market is very strong, reporting sales into the country 15 percent to 20 percent above 2012. The country’s aftermarket is very active due to the Mexican car parc – new car sales are limited and the average car age in Mexico is 13.7 years, according to the University of California Transportation Center.
According to the OAC, growth in distributor program group participation in Mexico and South America is on the rise. OAC board members report that program groups are asking for the same programs and pricing in Mexico that their U.S. groups receive from manufacturers. This is creating a difficult situation for U.S. manufacturers, which have different pricing and marketing programs for international customers than for their U.S. customers.
Brazil
The Brazilian market is strong due to a growing economy – and more growth is expected as the country prepares to host the 2014 Soccer World Cup and 2016 Summer Olympics. Its aftermarket infrastructure also is growing. AutoZone has located at least 10 stores in Brazil currently and has aggressive expansion plans to add more when those are established
Other International Market Insights
- Argentina: Doing business is difficult due to the country’s import restrictions and requirement of an import license.
- Eastern Europe: The economic turbulence in other European regions is not impacting these markets, where business is solid.
- Northern Europe: Business is slow in these markets due to economic uncertainty.
- Heavy Duty: Mining operations are doing well all over the world, creating a growing global market for heavy duty parts.
- Middle East: Business is growing despite enforcement of country-of-origin restrictions.
- Panama: Heavy duty business is slowing down due to the near completion of the canal expansion.
- Russia: As with its eastern European neighbors, Russia is a strong market now.
- Turkey: The country is experiencing a huge increase in demand for heavy duty parts to support its growing new construction. However, Turkey’s American car parc is shrinking.
For more information on international markets and the OAC, contact Dan Pike at [email protected]. The OAC provides many outstanding networking events. Visit its web site, www.oac-intl.org, for more information.
Dan Pike is the vice president of membership and member services at the Automotive Aftermarket Suppliers Association (AASA) and group executive of AASA’s international aftermarket council, the Overseas Automotive Council (OAC). OAC promotes the sale in foreign markets of automotive and heavy duty products manufactured in North America. Those products include components, accessories, chemicals, hand and power tools, service maintenance and repair equipment, and paint and body supplies for cars and trucks. OAC has more than 350 members in more than 40 countries. More information is available through its Web site, www.oac-intl.org. AASA (www.aftermarketsuppliers.org) exclusively serves manufacturers of aftermarket components, tools and equipment, and related products. It is a recognized industry change agent – promoting a collaborative industry environment, providing a forum to address issues and serving as a valued resource for members.
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