Automotive News Canada - August 2019 - F34

FIXED OPS JOURNAL

DATA DRIVEN

Dealerships can sell more factory parts by improving industry coding in their database

A

utomotive service and the
sale of original equipmentbranded parts are
increasingly lucrative
businesses for automakers and their
franchised dealerships. As newvehicle sales slip, manufacturers and
dealers must continue to identify
additional profit channels.
Creating more demand for original
equipment parts would benefit
automakers and retailers while
JEFF
helping to capture service revenue
NOSEK
that many dealerships are losing. The
most recent Cox Automotive Service
GUEST
Industry Study concludes that newCOLUMNIST
vehicle dealerships forfeit as much as
$266 billion a year in service revenue
- $15.9 million for the average dealership - because they fall short on
keeping customers. According to the Cox study, 70 percent of
customers who bought or leased a vehicle from a franchised dealership
did not return for service in the past year.
As vehicles age, drivers often have them serviced at independent
shops. Yet even these shops need to source the right parts, with the
option of buying original equipment parts from a franchised
dealership. Before this can
happen, though, these parts
"There is significant
must be available in a
untapped opportunity
dealership's database.
Independent shops, which
for automakers and
perform more than 70 percent
dealers to sell more of
of post-warranty service and
repairs, typically buy most of
their parts to
their parts from nonoriginal
independent repairers." equipment sources that often
don't offer factory-branded
parts. There is significant untapped opportunity for automakers and
dealers to sell more of their parts to independent repairers by coding
original equipment parts more effectively and making that enhanced
information available to everyone who buys parts.

"

"

Limiting access
Automakers have historically been concerned that making their parts
information widely available would benefit only their competitors. But
with dramatic changes in technology affecting data use and delivery,
limiting access to parts information today is counterproductive.
The advent of e-commerce has taught customers to shop around. If
data is unavailable on all e-commerce platforms, the owner of such
data will not even be in consideration.
Identifying the correct part is harder in an aftermarket setting than in
a dealership. With a VIN, a dealership can identify the exact part
needed for a repair. An independent repairer, however, needs to supply
a vehicle's year, make and model, along with part type and
characteristics, to be given a choice of parts. Only properly coded parts

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AUGUST 2019

are presented to the decision-maker.
The Aftermarket Catalog Enhanced Standard, or ACES, is the North
American industry standard for management and exchange of
automotive parts data. With ACES, suppliers can publish data using
standardized vehicle characteristics, parts classifications and qualifier
statements, giving properly coded parts an advantage.
Most automakers have not made their parts data widely available and
coded to ACES standards. They are missing out on the opportunity to
have their parts available to the 160,000 U.S. automotive service and
repair locations that need high-quality parts. Making properly coded
original equipment data more widely available will generate more
demand for factory parts.

Confidence level
Automakers can have confidence about making their data available
with the right governance: Who is allowed to distribute the data? Where
is it going? How will it be used? Tight contracts can control how
companies use automakers' data, similar to the way that Apple controls
how music is downloaded, with royalties paid to the artist.
To maintain control of their data, automakers need transparency in
the use of that data. Today's technology enables precise tracking of
massive amounts of data, which can provide new insights into parts
demand.
With help from data experts, automakers can create and execute a
comprehensive data strategy to determine where their data is going,
prioritize opportunities while casting a wide net, and ensure that data
will be protected. They can determine which data assets should be
made available, including an inventory of data that's not used enough
or at all. They can achieve maximum value by allowing downstream
customers to append other data, and make it commercially available
with industry standards.
Slowing auto sales and a more competitive landscape for vehicle
service are adding pressure on margins for dealers and manufacturers.
Making original equipment parts more visible to the independent
repair and collision shops that service millions of aging vehicles can
create more demand for mechanical and collision wholesale parts
programs. 
Jeff Nosek is executive vice president of Motor Information Systems,
a supplier of automotive data in suburban Detroit.
Automotive News Canada - August 2019

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