NEW ORLEANS – Snap-On Business Solutions and OEConnection are joining forces to help franchised dealerships sell mechanical replacement parts to independent repair shops.
The partners say their Repairlink with MORE (Mechanical Original Replacement Equipment) is a single-source online sales channel through which independent repair facilities can order genuine automotive parts from franchised dealerships for the vehicles they serve.
The tie-up, announced at the National Automobile Dealers Assn. convention here, is part of a joint venture created withLLC, Motor Co. and Corp. The full product launch of Repairlink with MORE is set for May.
David Foutz, director-marketing for Ohio-based Snap-On Business Solutions, tells reporters the new technology will benefit auto makers and dealerships alike.
The automotive OE replacement-parts industry faces tougher competition with aftermarket parts, he says. While both the average vehicle age and related service opportunities are increasing, “OEMs and dealers are not capitalizing on the (more than) $53 billion mechanical-parts opportunity.”
Aftermarket suppliers currently deliver about 77% of the parts sold, he says.
“From 2000 to 2007, the average age of a registered car in the U.S. grew 1.3 years, with over 41% of those vehicles being driven for more than 10 years,” Foutz says.
At the same time, the number of franchised dealerships has been dropping dramatically, meaning there are more cars on the road per dealership. Each vehicle represents an opportunity for the service and parts business.
Auto makers don’t compete with one another in the parts business, but rather with aftermarket-parts suppliers, such as Auto Zone and Car Quest, Foutz says.
“These aftermarket-parts competitors are winning for several reasons. When compared to OEMs and franchised dealers, they’ve created several advantages both from technology and business practices. For the parts they stock, they provide greater availability and quick delivery.”
Additionally, aftermarket-parts suppliers’ pricing is consistent and transparent. “The aftermarket has established (itself) as the primary supplier of independent shops for the most commonly used parts, across all makes and all the models that show up for service,” Foutz says.
“Independent shops today order aftermarket parts using robust online e-commerce tools and standard parts descriptions. Catalog navigation, combined with instant access to pricing and availability, has made using the phone to order parts a thing of the past.”
“If your bank didn’t allow direct-deposit or online banking, would you do business with them today?” he asks. “If you had to call them or physically show up for every transaction, how long would they keep your business?
“That’s precisely the competitive environment dealerships find themselves in today in the mechanical parts business.”
In order of priority for the factors that influence the parts-buying business for independent shops today, price is at the bottom of the list in a recent industry study, which finds quality the most important consideration.
“Parts costs are passed onto the consumer, and margins for an independent shop are fairly consistent,” Foutz says. “Quality is an area where genuine original parts have a competitive advantage.
“It’s more than just the fact that OE parts last longer, genuine parts fit right. Brand equity, No.6 on the list, is an area where genuine parts are strong.”
The aftermarket has an advantage with availability, ease or ordering, quick delivery and ease of returns, ranking No.2-No.5 on the list. “These are precisely the factors that Repairlink with MORE will help OEMs and their franchised dealers address,” Foutz says.
Mark Tomasetti, vice president and general manager-collision and electronics solutions for OEConnection, says Repairlink automates parts order processing between independent shops and dealerships and manages the entire order fulfillment process, simplifying the process for dealers.
“This standardization across a wide spectrum of OEM data has never been done before and represents tremendous value,” he says. It’s more accurate, more accessible content for genuine parts.
“Independent shops will have access to technical illustrations and complete parts lists, including cross references for OEM brands. This automatically directs their order to their dealership of choice, and (they) are kept informed throughout the process.
“Dealership operators need to provide responsive part deliveries, and while this can’t actually deliver a part to an independent shop, it can help dealerships improve their customer-service levels.”