The global auto industry is a palette with many colors

CHICAGO — The term globalization, bandied about these days with near abandon, is one that may require further inspection by the industry. Especially when it comes to tailoring parts and service for the marketplace of each particular country.

A Global Automotive Aftermarket Symposium (GAAS) panel titled "It's a Global Aftermarket After All: A Multinational Perspective" explored the differences from country to country.

"I don't want to lecture anybody in the room, but there is not one single European market to begin with," says Wolfgang Winzer, VP and general manager of Siemens VDO Automotive Corporation Service. "Don't believe what the politicians try to tell you. There are a couple of different European markets."

Many products need to be tailored for different countries throughout Europe, he adds. For example, the company’s biggest sales item in Germany is fuel modules.

But one thing that does unify Europe is its ongoing struggle between the independent aftermarket and OEMs, as European countries are dominated by dealerships for parts and service, Winzer adds.

The panelists also discussed the divide between the do-it-yourself and do-it-for-me markets in these countries.

"Japan is still a very service-oriented culture if you take a look at specific products like A/C compressors (which are used) almost entirely by DIFM installers," says Richard Shiozaki, DENSO Sales California's senior vice president. "In Japan, there's very little space for the individual to work on the car by themselves; even a spot on the street is very difficult to find to work on cars."

He adds: "Even customers who take their car to a dealership have their A/C service subcontracted to someone who specializes in the A/C business. This applies to many countries, whether it's Singapore or China."

In Mexico, "price is always the question — people always look for the lowest price and not necessarily for the better quality," admits Ricardo Vidal, a partner at Grupo Omigron, S.A. de C.V. Labour Consultants Group.

Fueling the trends
A trend in which the United States is bound to follow Europe is in the area of diesel-powered vehicles.

"For the last five or six years, 50 percent of all new passenger car registrations have been diesel," says David Coolidge, president of Robert Bosch Corporation's automotive aftermarket division, who adds that the registrations in some parts of Europe have been higher than 50 percent. "It's clear to us that you will start to see increasing demand for diesel and other alternative fuels, but we're also investing in other alternative fuel technologies, including hybrids. I wouldn't be surprised to see diesel hybrids on the road in the new future."

Shiozaki says other new technologies to look out for include "common rail high pressure injection systems, electric gasoline hybrids and, yes, there will be hybrid diesel engines in the near future. All these will bring better results to the economy. Several have already launched, and DENSO is a key supplier to the Toyota Prius."

An electric air-conditioning compressor, which runs on the battery's electricity and has gotten smaller and lighter over the years, is another key component, he adds.

When moderator David Caracci, chair of the University of the Aftermarket Foundation, asked about the impact of low-cost countries on nations such as Europe, "We haven't seen the low cost country competition in Europe as we do in the United States at this point in time," Coolidge answered.

When asked what isn’t coming from low-cost countries, Coolidge replies, "I'd say what comes to mind first and foremost, what they're not exporting are value-added services. I don't know of many Chinese suppliers that are offering category management, brand management, training, technical support, sales support. I don't know how they deal with warranties and returns."

Winzer says the key to remaining successful in the North American aftermarket lies in educating those on the front line. For example, in Germany, workers like electricians must go through multi-year training and apprenticeship programs.