AAIA has now commissioned a study of telematics and the potentially dramatic impact it could have on the way the industry services and repairs vehicles.  During the recent Global Automotive Aftermarket Symposium, AAIA President and CEO Kathleen Schmatz delivered a thought-provoking presentation about telematics and the industry.  She identified the connection between today's rapidly improving customer relations management (CRM) software now available to the industry and the ultimate connection to customers using telematics. 

The extent to which a small business manages its CRM software system and the subsequent customer contact will probably determine the speed and ease with which the business enters the early stages of telematic involvement in relation to customer relations.

Since mid-2007, Parts & People has warned of inflation and economic slowdown, and, as a result, has continually encouraged all parts and service businesses to meet the challenge by being increasingly customer driven and improving professionalism through the use of CRM software.  Realization that CRM is the first step towards eventual involvement in telematic contact with customers makes investments in developing and managing CRM efforts more important and more easily justified than ever before.

Derek Kaufman, the author of an industry study on telematics, will present his detailed findings and recommendations at the 2008 Aftermarket eForum July 14-16.  Kaufman, president of C3 Network, has performed extensive research on telematics in the automotive and heavy-duty aftermarkets and will give recommendations at the eForum for turning a potential threat into a business opportunity.  For more information, visit www.AftermarketeForum.com.

Update on speculation-driven fuel costs
Last month, Parts & People called on all automotive-related associations to follow the example of the Air Transport Association and its president and CEO, James C. May, and call for congressional action regarding fuel costs and, specifically, investigation of the oil futures speculators.

Consensus is being reached that there are three factors driving up the price of oil–the falling dollar, speculation, and buying on low-risk margin.

The Federal Reserve's low-interest monetary policies and the increase of M3 dollar supply, at an estimated annual rate of approximately 16 percent, are two primary causes of dollar devaluation.

Regarding margins, U.S. margin rules set by the government's Commodity Futures Trading Commission (CFTC) allow speculators to buy crude oil futures by having to pay only 6 percent of the value of the contract.  This extreme, low-risk, 16:1 leverage encourages increased speculation.  The margin percentage should be raised as it has been in the stock market many times.

As far as speculation, there is sufficient and significant evidence that the system is being manipulated.  According to the MarketWatch.com quoted report from the Homeland Security and Governmental Affairs Committee, "Speculative activity in commodity markets has grown enormously over the past several years."  It pointed out that in five years, from 2003 to 2008, "investment in the index funds tied to commodities has grown 20-fold--to $260 billion from $13 billion."

Michael Masters of Masters Capital Management LLC, testifying before the same committee, said, "In the popular press, the explanation given most often for rising oil prices is the increased demand for oil from China.  According to the DOE, annual Chinese demand for petroleum has increased over the last five years from 1.88 billion barrels to 2.8 billion barrels, an increase of 920 million barrels.  Over the same five-year period, index speculators' demand for petroleum futures has increased by 848 billion barrels."

The energy commodity markets perform an essential function if they are transparent, accountable, and subject to the rule of law.  But, as Michael Greenberger, former CFTC enforcement officer and professor of law at the University of Maryland, testified before the committee, "Failure to regulate these markets properly has distorted and sabotaged free market principles and cut those markets off from the moorings of economic fundamentals."

The intent of a proposed "Oil and Gas Traders Oversight Act" is to close loopholes and bring accountability to this under-regulated market.  In addition to calling for investigations into unregulated and, in some instances, fraudulent speculation and the suspicious cronyism of the understaffed CFTC, automotive-related associations should seriously consider supporting the act and call for adjusted margins to slow the low-risk speculation that has increased the price of a barrel of oil by more than 50 percent.

 
The Department of Transportation reported that figures from March showed the steepest year-to-year decline in miles driven ever recorded.  Regardless of ideology, all automotive-related associations should seriously consider calling for investigation of speculators in order to reduce fuel costs for the benefit of their respective memberships and all Americans.