Offshore parts suppliers recognize the American
automotive aftermarket is the largest in the world.This alone could
explain the large attendance at the seminar sponsored by the Automotive
International Association (AIA) during the recent Automotive Aftermarket
Parts Expo (AAPEX).The audience from Canada, Mexico, Europe, and Asia
learned about the complexities and dynamics of the aftermarket, and how
opportunities must be assessed - in advance - before investments can be
profitable.
Henry P. Allessio, managing director of Walden Consultants, was the featured
speaker.He shared his insights from consulting with foreign companies on
entering and competing in American markets:"Non-American suppliers must
honestly evaluate their competitive positioning before investing in this
market.It can be tricky.Easy access to business people and market
information in America does not mean it is an easy market in which to gain
inroads and make money."
The presentation reviewed several market requirements which differ from the
home markets of aspiring offshore suppliers.Pricing, profit margins, and
relative size of key market segments can vary dramatically in Europe and
Asia.Leading parts suppliers in America have the potential to benefit from
scale economies and, as a result, make it difficult for low-share entrants.
By choosing specific customers in America, a supplier's available market and
pricing levels become defined, and could be restrictive."That is why,"
Allessio remarked, "would-be suppliers must know in advance whether their
resources are properly focused and in balance with adequate sales
opportunity.Too often early relationships are established which cannot
deliver targeted business returns."With proper planning, a small share of
the American aftermarket can yield an attractive volume of business for
offshore parts suppliers.
An active discussion period brought together offshore suppliers with an
array of market specialists from the membership of AIA.The audience was
reminded that American aftermarket participants are eager to work with
foreign suppliers to set up appropriate arrangements to enter the market.
Co-manufacturers, importer/distributors, specialty jobbers, sales
representatives, and business agents are among the choices for an offshore
company.Local companies have important market knowledge.
Walden Consultants Ltd. regularly conducts corporate strategy, marketing,
competitive analysis, and acquisition planning assignments for domestic and
foreign clients.Automotive businesses are one area of specialization for
the management consulting firm which has offices in Hopkinton, Mass.
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