Aftermarket parts industry takes the stage at annual ABPA convention
Charleston, S.C.—PartsTrader, proposed changes to federal patent law affecting crash parts, and expanded certification programs were all on the agenda as the Automotive Body Parts Association (ABPA) held its annual convention for the aftermarket parts industry recently in Charleston, S.C.
The convention also offered new ABPA Executive Director Ed Salamy an opportunity to share his thoughts about the future direction of the industry and the association.
“Our industry is under increased scrutiny and attack on many fronts, including OEM price-matching, increased costs of doing business, patent law, and market competition,” Salamy told convention attendees. “All of these need to be addressed, and I pledge that the ABPA will be your voice.”
Here are some of the highlights of the event that will be of interest to collision repairers.
PartsTrader says vendors can boost sales
George Avery of State Farm told ABPA convention attendees that the insurer voluntarily stopped mandated use of non-OEM alternatives for 25 part types following a lawsuit in the 1990s. But, he said, State Farm does use some non-OEM parts on the 30,000 claims it handles each day, and shops are able to use others if specifically requested by vehicle owners. Avery explained it’s more of an interest in streamlining the parts process rather than involvement in parts selection that has led to State Farm’s required use of PartsTrader by its Select Service shops in a growing number of markets.
Dale Sailer of PartsTrader told distributors that signing up to quote parts on the system could also boost their non-OEM parts sales because about 30 percent of the approximately 600 shops using PartsTrader use it for more than just State Farm claims.
He said there are approximately 1,000 parts vendors on the system; each had to be nominated or invited to participate by at least one shop, something Sailer was asked about at the ABPA convention.
“There are currently 480 shops in Chicago participating,” he said. “If I’m a supplier, all it takes is one out of the 480 to nominate me. Once I get nominated by one, I get access to the entire marketplace. I would politely challenge a supplier that can’t get one out of 480 to give you a chance.”
Sailer confirmed suppliers will eventually pay fees to sell via PartsTrader.
“When fees are introduced, which will be sometime next year, and it hasn’t been determined what they are yet, the fees will be on the seller of the product,” Sailer said.
He noted that PartsTrader was developed not as a tool specifically for use by State Farm but as “a product for the entire industry, with not just State Farm benefiting, but shops benefiting, other insurance carriers benefiting, and the parts channels benefiting.”
He said State Farm’s endorsement helped PartsTrader, which began in New Zealand, attract a significant amount of private equity funding. But, he said, neither State Farm nor any other insurer has any equity in the firm, nor do any parts suppliers, automakers or collision repair organizations.
“We come to the marketplace as an honest broker,” Sailer said. “It doesn’t matter to us who wins or loses. People win or lose based on their performance in the marketplace.”
He said that starting in April, PartsTrader launched a feedback system asking shops to rate suppliers on the system, based on parts and service quality, as well as asking vendors to rate shops in terms of payment practices, return rates, etc.
“That information is currently being captured,” Sailer said. “We’ve finished up the algorithm so we can present back to you a rating system so you can very quickly discern if this is somebody you think you feel comfortable doing business with.”
CAPA examines radiator issues
Jack Gillis of the Certified Automotive Parts Association (CAPA) said his organization is working on certification requirements for A/C condensers and radiators.
“We did some preliminary testing on very popular radiators, and we found there are some problems,” Gillis said. “There are great radiators out there and some not-so-great radiators. One of the issues is that radiator failures general occur six to 18 months down the road, when the consumer has forgotten they even had the radiator put into their vehicle.”
Gillis said CAPA compared nine non-OEM radiators to their OEM counterparts for the 2004-07 Chevrolet Silverado, the 2005-07 Honda Accord, and the 2000-07 Ford Taurus. Seven of the nine, Gillis said, failed to match the OEM part. Problems found, he said, included radiator caps that failed pressure testing, premature corrosion issues, leaks dues to poor welding, and tube fractures.
NSF parts and distributor certification climbs
Bob Frayer of NSF International offered an update on the company’s parts certification program, noting that almost 1,700 parts were certified in the last 12 months, an 84-percent increase in the number of certified parts.
NSF also has a distributor certification program, launched in mid-2011, and seven distributors have earned the designation (up from three a year earlier). Frayer said about an equal number of others are pursuing certification.
A certified distributor can sell any parts, whether those parts are certified (by NSF or CAPA) or not. A distributor can be certified, however, only if it (among other requirements) picks up return parts from customers within two business days for customers serviced daily; has a system of tracking returned parts confirmed to be defective; evaluates on a case-by-case basis reimbursement of a shop for labor associated with the sale of a defective part; and has a tracking and recall procedure to support a manufacturer’s recall of safety-related parts (hoods, lights, radiator supports and bumper parts). Distributors must also have a system in place to ensure that a non-certified part is not substituted when a certified part is ordered.
Design patent legislation seeks support
A key issue at the convention was proposed federal legislation that would slash the time that automakers can use design patents to prevent other companies from producing replacement crash parts from 14 years to 30 months. Eileen Sottile, vice president of governmental affairs at LKQ Corp., resigned this spring as the executive director of the Quality Parts Coalition (QPC), the group backing the federal legislation, but still voiced support at the convention for the legislation.
“It is my intention and hope the bill passes, and LKQ supports the passage of the legislation,” Sottile said. “I’ll continue to lobby for the legislation as a member of QPC.”
Dan Morrissey of PartsChannel has stepped in as interim executive director, and urged parts distributors at the convention to increase their support for the coalition, which he called “our only chance of winning this battle against the design patents.”
“It really is our survival,” Morrissey said. “The only solution is to change that law. The QPC has accomplished so much in such a little bit of time. We can push this thing through, but it takes money. That’s just the way Washington works.”
Salamy assumes ABPA leadership
Ed Salamy joined the association in April to begin the transition of taking over the position from long-time ABPA executive Stan Rodman. Salamy has 15 years’ experience in the aftermarket parts industry, including the last seven as director of industry relations for parts distributor KSI Trading Company.
Salamy promised ABPA members a number of changes, including a revamped website, a greater presence in the trade press and social media, a push for new members, and a “greater attempt to develop relationships between ourselves, insurers, and the various body shop associations.”