The specter of the parts trade

The specter of the parts trade

Home workshops are spoiled - and often don't even know it. An urgently needed spare part in original equipment quality will be delivered within a few hours today. And thanks to large parts suppliers such as Stahlgruber, Birner, Derendiger and Co., something is always available. Why? These have extensive warehouses full to the brim with fast-moving and exotic spare parts, an efficient ordering system and even more efficient, seamless logistics, a cost-intensive and complex business area. Or why do many smaller workshops like to save on inventory? Because it ties up capital. And especially as an independent workshop, you never know whether the next customer will show up with a Ford, Mitsubishi or SsangYong. In short: a rapid supply of parts is comparable to the blood circulation in our body. If something gets stuck here, it will be life-threatening.

PRICE VS. SERVICE

In our research into where the problem really is in the parts trade, the key players seem to agree: low-cost suppliers - mostly from the East - are making a dent in the domestic market. While domestic parts dealers here pay taxes, secure jobs and adhere to social and economic rules, foreign companies can enter the market with cheap prices. The reason: lower wage levels, non-comparable working conditions and lower purchase prices. “Unfortunately, the parts producers (the industry) have done us no good with their sales model,” sighs Roland Hausstätt, Managing Director of Stahlgruber Austria. “The industry now supplies everyone, including smaller parts dealers, who are far from offering our standards and therefore enter the market with lowest prices.” Bruno Weidenthaler, Managing Director of Derendinger Austria, agrees with his industry colleague: “Supplying domestic workshops from the Eastern markets is a problem and sales are lost.” Nobody has anything against competition, but there should be a level playing field, according to the unanimous opinion. Wolfgang Dytrich, chairman of the wholesale trade in vehicle parts in the Vienna regional committee, points out: "The frightening thing is that the industry offers the same goods for up to 30 percent cheaper in the eastern markets. Companies from the Czech Republic or Poland, for example, can supply dealers near the border with unrivaled prices. This is massively damaging to the domestic parts trade." Is the core of the poodle the stinginess is cool mentality of local workshops? An old business proverb says: Profit lies in purchasing. So why pay more than necessary? Walter Birner, VFT chairman, has an answer to this: "The domestic parts trade offers so much more than just spare parts. It offers an all-round package, consisting of sales employees who are close to the customer. Excellent, fast logistics and an understanding of the industry. Exchange parts that don't fit with a foreign low-cost supplier - have fun doing it." Roland Hausstätt is in the same vein: “We offer our customers only the best from A to Z. Of course, this is reflected in the price, because we have to and want to make money.”

“We are pushing for free data access for independent workshops with all our might.”ROUVEN DANIEL, SCHAEFFLER AUTOMOTIVE

Afraid of electric cars?

There is currently general uncertainty, says Weidenthaler: "The horror reports from Germany about which manufacturers and suppliers are saving thousands of jobs or not wanting to fill them are worrying. The industry should now show with clear words and concepts where the journey is heading. It is not doing that, hence the uncertainty." The global climate discussion has the automotive industry firmly in its grip: low CO2 emissions are in demand, and the electric car as a savior is on everyone's lips. The crux of the matter: pure electric cars are supposed to require significantly less maintenance than conventional combustion engines, which is bad news for workshops and dealers. Will the electric car dry up the parts and repair business? We ask Rouven Daniel, Head of Transmission Systems at Schaeffl er Automotive: "The Aftermarket focuses primarily on vehicles that are four to five years old. Electric cars are only now coming onto the market very slowly. At Schaeffl er Automotive Aftermarket we expect an electric environment (of the total stock) of five percent in 2025. By then, plug-in hybrid models in particular will become more popular and their maintenance costs are even higher than those of conventional combustion engines, because the same two technologies can be used in parallel.” Daniel is again seeing a consolidation in the distribution between petrol and diesel models - the diesel dent is filling up again. Domestic industry players also agree that electric car sales will not increase so dramatically that the parts business will suddenly collapse in the next ten years. Walter Birner: "Business is still good. You have to run more, the competitive pressure is higher, the decision-making structures are different - the key word is fleet exploration."

“The industry is experiencing a change: the screwdriver mechanic is being replaced by diagnostic technicians.”BRUNO WEIDENTHALER, CEO DERENDINGER AUSTRIA

MORE THAN PARTS SUPPLIERS

Roland Hausstätt from Stahlgruber puts it in a nutshell: “Competing on an equal level with other market participants is not the problem.” Especially since the large, established parts dealers are more than just parts suppliers. In addition to availability and competent contacts, each of them also offers workshop concepts and training in order to differentiate themselves from both competitors and low-cost providers from abroad. “We have to focus on our service, not the price,” says Walter Birner, adding: “It is important that the independent workshops continue to have access to essential vehicle data in order to be able to maintain and repair the cars.” Bruno Weidenthaler can only agree with this: "The industry is experiencing a change: the screwdriver mechanic is giving way to the diagnostic technician. The more complex models require more digital understanding. The workshops should prepare for this now because these cars will be coming to their yards in the next five years." The training courses, some of which are available free of charge to concept customers, are therefore extremely important. Rouven Daniel from Schaeffl also sees potential here from an industry perspective: “We are using all our strength to push for free data access for workshops that are not tied to a brand. We are fighting with other suppliers to ensure that there are no restrictions on competition here.” An issue that VFT chairman Walter Birner has been fighting for for years: "The vehicle manufacturers don't make it easy for us or the independent workshops. The new VW Golf 8, for example, needs a similar access code to the one already known from various FCA models. As an association, we are vehemently committed to ensuring free data access."

CONCLUSION

Due to the enormous vehicle population of over five million cars in Austria alone, the parts market and the business for independent workshops are secured for at least the next ten years. On the face of it - and if electric cars don't become dramatically more important overnight - even significantly longer. Hand on heart: How many industries can today say with certainty that their future is so secure? Even. But it is also a fact that local workshops are well advised to spend a few euros more when ordering parts, as the local parts trade is an essential part of the automotive industry and everyone actually earns something from the parts trade - as long as it is fair and balanced. If that's not even good news.