Chicago— Mainstream media coverage of GM and Chrysler bankruptcies and subsequent dealership closures paint a picture of doom and gloom, but for industry veterans and others in the know, there’s light at the end of the tunnel.
John Waraniak, SEMA’s VP of advanced vehicle technology strategy, programs, and initiatives, said there is ample aftermarket opportunity for companies willing to change and serve the needs of the modern motorist.
Waraniak expressed this sentiment during the 2009 Global Automotive Aftermarket Symposium (GAAS) on May 6 during the two-day event at the Hyatt Regency O’Hare. His presentation, “Don’t Waste This Crisis,” was aimed at GAAS attendees, many of whom were aftermarket and tier-one parts manufacturers, wholesalers, and retailers.
“The companies with the speed to change will win,” Waraniak said, adding that the industry will change more in the next 10 years than it has in the last 50. The heads of aftermarket manufacturers, distributors, and service providers must have short-term and long-term scenario planning in place to change pace with the market, he said.
The GAAS presentation focused on corporate strategies for serving niche segments that include vehicle safety, mobile electronics, alternative powertrains, and vehicle connectivity, all of which Waraniak said are increasing in significance for motorists and the aftermarket.
“You can find opportunity in all this chaos,” he said. “The auto industry has long been one of the largest economic multipliers. We’ll continue to be so, but differently.
“Manage the present, refuel for the future, and selectively forget the past,” Waraniak said, pointing out that this must be the new mantra for aftermarket executives. “When the rules change, you have to change your formula for success.”
Executives must act with a combination of book smarts and street smarts, he stressed. “Go to the place where things are happening and make it happen for yourself.”
Situational awareness is a must, Waraniak said, pointing out that “it’s tough to look ahead when you can’t see it. Having a business spotter on the horizon can help you see ahead. Plan for what you think is going to happen and monitor it.
“The recession will last a lot longer,” he warned. “The industry is way too fast and over capacity,” he said, referring to the U.S. dealership body. “It had to be cut, and it’s painful.”
Ford Motor Co. selectively forgot the past and planned for change two years ago, Waraniak said, pointing out that they didn’t have to touch the U.S. government’s TARP money.
“When the check-engine light came on at GM, what happened?” he asked rhetorically. That inability or unwillingness to change resulted in President Obama asking CEO Rick Wagoner to step down in March after rejecting his post-TARP restructuring plans, he added.
When planning for change, Waraniak said you have to process information quicker than your competition; that means dialing into consumer trends and making them work for your organization.
A desire for motorists to be connected while driving has become a mega-trend, Waraniak said, adding that it is found in on-board vehicle connectivity, which he dubs .car; in vehicle-to-vehicle technology, or .net; and in vehicle-to-roadside, or .road.
If vehicles were connected on the road, there could be a reduction in the more than 40,000 deaths that occur in nonconnected vehicles each year, he said. If the aftermarket had access to this proprietary vehicle-to-vehicle communication technology, its implementation in vehicles could be accelerated by up to 10-12 years, he said, estimating that without aftermarket participation, it will be in vehicles in 2030.
Using plug-in vehicle technology as an example, Waraniak said that the aftermarket often pioneers technology that automakers later adopt. He pointed out that many aftermarket companies were converting hybrids to plug-ins before automakers began producing mass marketed plug-ins.
When developing technology, Waraniak said, brand exposure is paramount. A good design with a recognizable brand name pays, he said, pointing to Oakley sunglasses, which are sold at a 50 percent greater margin than competitors because of brand equity.
Ford Motor Co. has come to be known for its use of Microsoft’s SYNC inter-vehicle connectivity, Waraniak noted.
On-board connectivity with passengers’ mobile electronics is a reality today, with Bluetooth found in many vehicles and Ford Motor Co.’s SYNC technology, an open platform, a $750 option, he said.
In order to proliferate, those technologies must have a greater consumer demand, Waraniak said. “People will have to vote with their wallets to get systems on board,” he said.
With automakers downsizing, they will have to produce more cars using fewer platforms, he said; the aftermarket stands to benefit by expanding on OEM technologies and making them better fit the needs of motorists.
When changing course, Waraniak stressed clarity, short-term goals, an emphasis on brand, and serving niche markets.
“Tough times call for clear thinking and decisive action,” he said. “You can let the opportunity go by, or let your competition go by, but never both.
“If you design something that lasts forever, you won’t achieve your objectives,” he said.
“Develop projects that help you get through six to 12 months, then change.”
“Your brand should be the differentiator,” Waraniak said, adding that it should be positioned in underserved niche markets. “The next five years will be different; those with situational awareness will win.”
