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ONE SIZE FITS ALL

24th March 2005, Page 56
24th March 2005
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Which of the following most accurately describes the problem?

Almost all truck manufacturers now offer a 'one-stop shop' for rival components. So how is this affecting the traditional parts dealers? Andy Moore finds out.

Twenty years ago the idea of selling a rival's fast-moving parts would have sounded like siding with the enemy.'The concept of selling a competitor's wares went against the grain of brand loyalty. Back then, "keeping everything in the family" was virtually a mission statement for British industry.

Today, however, the all-makes parts sector is expanding with most manufacturers getting involved to varying degrees. lypical all-make parts include service items such as filters. brake pads, fan belts and wiper blades.

Revisions to EU Block Exemption regulations which came into force in October 2003 have made the process of sourcing rival make parts much easier throughout the industry. Manufacturers and independent repairers now have a greater degree of purchasing power and access to original spare parts.At the same time dealers and franchised repairers can source spare parts directly from the original equip ment manufacturers.

While supply chains buy and sell through an 'open markef.customers can benefit by purchasing rival make parts through a one-stop shop. Gone are the days when repairers and operators were forced to leaf through hundreds of parts invoices; customers are now used to buying parts for mixed fleets through single point invoicing.

One truck manufacturer that has entered the fray in a large way is Dal Selling components for all the main manufacturers, the company offers a wide range of multi-brand parts.-We have been selling all-makes parts for the main truck manufacturers for over five years." says marketing director Tony Pain. "Nearly all the consumable parts come from independent suppliers which are sold to customers who may operate mixed fleets of varying ages."

The manufacturer is able to supply parts such as fan belts,filters and brake shoes for current as well as obsolete vehicles. "ironically. supplying all-makes parts actually helps to preserve brand loyalty because our customers know we can service their entire fleet," Pain adds.-Ifs all about offering customers improved service levels. Single-point delivery of multi-make parts saves customers the hassle of ringing up independent suppliers.

Sourcing different parts brands also allows single-point invoicing for large fleets. Rather than issuing hundreds of invoices, Daf will buy parts from another supplier, sending the operator just the one invoice a month. However, while parts forecasting is straightforward for Des own

ecause most ma ers o er

truck range, it also has to predict those of competitors. Forecasting for rival makes leads Daf to use 'recommended' stock lists. But with parts requirements varying across the UK, there are varying degrees of competition between the manufacturers.

"All-makes parts supply is a free and open market but it's not that cut-throat,says Pain. "We originally got out of the business,unsure it would take off Now we have come back into the sector more aggressively after seeing the benefits it can bring to our customers."

After five years in this sector Renault reports its all-makes parts operation is growing. During that time sales of all-makes parts have increased from £750.000 in the first trading year to over £2m in 2004; total sales of Renault parts amounted to £30m last year.

The French manufacturer works with Unipart Automotive and Serck Imertruck which provide nationwide distribution for allmake components.

Zero inventory "The primary focus of our all-makes programme is to supply the workshops," says Guthrie Aitken, head of national aftermarket sales."We do not supply retailing parts but there is a growing demand to distribute allmakes to service centres and repairers.

Key to Renault's operation is a 'zero inventory' of products the manufacturer is able to source parts from its suppliers which can be delivered within one hour from the point of order.

Compared with some of its rivals,Volvo keeps a low profile in the all-make parts sector. However, the Swedish manufacturer is able to source a limited range of fast moving items for the main marques through Roadcrew Solutions.

"We are able to procure a range of non-Volvo parts for our dealers throughout the UK," says Ken Morris. the aftermarket manager of parts. "Such products include filters, clutches„ starters and alternators. However, we cannot offer the same level of availability for other makes as we can for Volvo."

Keen to preserve its brand image, the company highlights the importance for its customers to buy products through authorised dealers. Morris believes the all-makes parts business is no more competitive than buying through a franchised network.

In addition to supplying parts for current rival makes,Volvo can source components for obsolete vehicles, albeit on a limited basis.

"We wouldn't pretend to have the range of stock for rival trucks as we do of our own vehicles," adds Morris. "Obviously if a dealer has a customer who has a number of older rival trucks, it will try to source the part. But there's no sense in stocking parts for a 15-year old vehicle."The manufacturer admits its involvement in the sector is more for customer convenience -rather than as a lucrative business in its own right.

Also adopting this school of thought is MAN/ERF, which is able to source parts for all the main brands on a local dealer level. Components are purchased from dealers on a limited basis, although the company has no 'official deals' with rival manufacturers. MAN/ ER!-' also has no qualms over rival firms selling its own parts range, according to Clive Hatwood, general manger for part sales.

"There is little market intrusion on our own products because most competitors are offering each others' wares in some shape or form," he explains."We are very busy with our own parts business. it's a full-time job. Stocking our rivals' components would involve serious amounts of research and development."

Iveco, which claims to be able to source parts for all marques, considers the business to be a valuable tool to assist customers with mixed fleets."All-makes component sales is not a major part of turnover—hut it complements our existing product lines," explains Paul Livingston, Iveco's after sales marketing manager. 'The business also enables our service and repair centres to meet the needs of multi-fleet customers.This saves them the hassle of going to individuals uppliers.

While all-makes parts is seen as a valueadded service to customers, Scania has little involvement in the business.The company's ethos is to concentrate on supplying a wide product range for its own customers;procuring parts for other makes is restricted to local dealer level. Although we service rival trucks at local dealers, there is no official agreement with competitors," says David Hickman, Scania's parts sales manager. "Dealers have the freedom to purchase rival makes parts if they wish. By doing this, customers with mixed fleets can receive better service back-up."

Brand loyalty

Scania strives to preserve brand loyalty with a premium parts service,backed by a comprehensive stock availability and a strong dealer network. Despite the cut-throat business of parts pricing, the manufacturer sets values to reflect the 'higher quality' of home-supplied components."Customers always perceive products to be more expensive if they buy directly from a manufacturer." adds Hickman. "This isn't always the case and we are working to change this perception.We are not in the market to price match with suppliers" Stocking 20,000 fast moving parts, the company is resigned to the fact of customers going to rival firms to source components Since all-makes parts was established 20 years ago. Scania reports that some manufacturers have burnt their fingers through not understanding the market. Lack of knowledge of a rival's parts range is requiring manufacturers to invest heavily in research and development. This. insists Hickman, can result in a limited choice of parts on offer to the customer.

Another manufacturer which is 'not committed' to the all-makes parts business is Mercedes-Benz. Laying low in the sector,it has evaluated the benefits of offering a one-stop shop service to its customers. "Purchasing parts from the dealers of our competitors would be an expensive option." reasons Bill Lock erbie, the company's centre manager for European logistics.-Because we don't have deals with the OEMs of rivals, we would have to buy directly from manufacturers. If this was the case, we would look out for discounts.

The key to being successful in the sector, he says, is to embark upon a strategy which embraces a multi-brand parts supply.This way, Mercedes could market on-the-shelf components for other manufacturers as well as parts for trailers. Yet despite competitors stocking parts with the three-spoked logo, Lockerbie insists the company has few fears over market competition.

"In today's block exemption regulations,we are not worried about competitors selling our parts," he insists."If competitors purchase parts directly from us we would be less concerned than if they bought from a supplier and marketed them as their own."

Across the industry, supply agreements between rival firms appear to be more gentlemanly, compared with the 'go for the kill' approach. But. as the haulage industry becomes even more competitive and operators seek to drive down costs, the term 'siding with the enemy' could well be laid to rest. m


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