OEMs' High Costs Hurt Accessory Sales

Auto dealers across all brands would sell more accessories and aftermarket products if they followed the lead of Toyota Motor Corp.'s Scion youth division and its retailers.

So says accessories expert Mark Chung, strategic marketing director-Yokohama Tire Corp. and a former Ford Motor Co. marketing manager.

Scion and its dealers make it easy and affordable for customers to accessorize their Scion vehicles, says Chung, a panelist at the Automotive Consumer Market Research Conference in Dearborn, MI.

“They make it so easy to say, ‘I'll take this, this and that,’” he says. “And the accessory prices at Scion dealerships are within the reach of their young customers. The prices at other dealerships are high enough to send people elsewhere for their accessories.”

Chung doesn't blame dealers for high accessory costs at their stores.

“It's the manufacturers,” he tells Wards. “They over-engineer their aftermarket and accessory products, in part because of liability concerns. But the costs are too high and it's passed on. By the time it gets to the dealerships, a lot of customers say, ‘I can get that body kit down the street for cheaper.’”

Price points aside, dealership sales people generally do a poor job pitching vehicle accessories, says another conference participant, Joe Gross, manager-OEM sales and design for the Kicker division of Stillwater Designs and Audio Inc.

“Sales people often will not present aftermarket products that are available from the dealership's parts department,” says Gross. “There's a disconnect there. The success would be huge if there were more of a connection.”

He gives auto makers poor marks for not engineering their vehicles for better compatibility with many aftermarket products, particularly electronics.

A lot of audio equipment cannot be installed in new vehicles without haywiring electrical systems and voiding vehicle warranties, says Gross, who started in the car-audio industry 23 years ago as an equipment installer.

“Today's cars can offer huge challenges because of their complicated electronics,” he says. “It makes it easy for a dealership technician to say, ‘Your car is out of warranty, because you had aftermarket equipment installed.’”

Chung says: “You have to be able to install aftermarket equipment without voiding warranties. Scion has managed to do that.”

He predicts the accessory industry will get a boost from the anticipated growth of the small-vehicle segment in the U.S., as a new generation of compact vehicles hits the market.

Traditionally, small vehicles tended to be econoboxes. But the new ones are stylish and fun to drive, characteristics that lend themselves to vehicle customization, says Chung. Moreover, they attract young buyers, who are prime customers for accessories, he says.