SPARE PARTS START AGAIN
AUTOPROMOTEC SPECIAL: SPARE PARTS
In an Italy where increasingly fewer cars are being bought, maintenance is also in serious danger of suffering. Component manufacturers, distributors and spare parts dealers are affected. But at the Autopromotec stands, there was no lack of proposals for reversing the trend: starting with remanufactured spare parts
GET YOUR ACT together and start again. These were the passwords that echoed among component manufacturers, distributors and spare parts dealers at Autopromotec 2013. It seems like a very long time since the 2011 edition, when a certain amount of optimism was in the air: we thought that the crisis was behind us and that customers’ increasing attention to consumption and maintenance costs, in addition to the boom in “green” technologies, would drive sales in the years to come. The Euro crisis had not yet exploded and “spread” was still an expression used only by operators. But now everything has changed.
The crisis that is affecting domestic demand in Italy and other Mediterranean countries and the ideological war that has been declared against the car by the State (the increase in inland duty is an example) and numerous local administrations, has changed the situation. Before talking about the component sector itself, we must evaluate the plain and unadulterated figures for the car sector. Registrations dropped by 19.9% in Italy; by 13.4% in Spain; and France recorded -13.9%. A very long way from Germany’s sales volumes, which fell by just 2.9% (Anfia data). The Automobile Association’s (ACI) figures on the used car market in Italy are not any better, unfortunately. During the year, there were 2,504,773 changes of ownership compared to 2,792,216 in 2011 (-10.3%). Not only. According to GIPA, the average age of vehicles on the road increased by one year only in 2012, suddenly rising from 8 to 9 years. So Italian consumers have reacted to the crisis by buying fewer car; in other words, they have kept their old ones.
This may seem to have been music to the ears of component manufacturers, distributors and spare parts dealers. Far from it. Because as well as keeping their old cars, consumers use them less, as demonstrated by the drop in motorway traffic (7%, which is also raising questions about Italy’s infrastructure projects) and fuel consumption (10.8%, according to Unione Petrolifera). And perhaps faults are also being ignored: according to the Autopromotec Observatory, turnover in the car repair supply chain dropped by 10.4% in 2012. A sign that, at the moment, Italians are saving even on the fundamental aspects of maintenance (like the brake system), which puts road safety at risk. The last factor: according to Anfia president Roberto Vavassori, “between 15 and 18% of people under 24 state that they do not have a driving licence and do not intend to buy a car”. The car as gone from being a status symbol to a nuisance. A smartphone is much better.
So is everything lost? Absolutely not. Italy can still count on a component supply chain of about 2,500 firms, 179,000 direct operators, with turnover of €42 billion in 2011. In the same year, total exports exceeded €19 billion, an increase of 16% compared to 2010. The sector closed 2011 with a positive balance sheet and growth of 3.7%. But there was a downturn in 2012. According to Autopromotec Observatory data, in the first six months the falloff was 17.4% for undercar components, 16.4% for bodywork and cabins, and 15.7% for electronic components. The downturn was less for engine components (-5.4%) and consumables (-4.1%). Hiding behind these cold figures are two factors. First, they are not as catastrophic as you might imagine from the general economic picture. Second, the importance of exports. In the words of the manufacturers, Russia in particular seems to be one of the most promising markets because of an aftermarket that is decidedly backward compared to the rapidly evolving vehicles in circulation.
At the Autopromotec stands, a third and very popular way out was remanufactured original parts. Their use continues to spread, even particularly delicate components like those in steering and brake systems: pumps, callipers, cylinders as well as electric steering columns and electromechanical steering boxes. Also particularly flourishing is a turbocharger segment that has not suffered from the crisis thanks to the technological evolution dictated by the Euro directive. Here, too, as well as new turbochargers there is a vast range of remanufactured components that cost half as much as a new part. Not to mention remanufactured engines. Stands at the Bologna fair also displayed remanufactured valves for exhaust gas recirculating (EGR) systems. There is a very good reason for this development: for end-users, on average a remanufactured part costs 60% less and the quality is totally comparable with a new part.
Another area of innovation is services. On show were systems that, beginning with the vehicle registration number, enable mechanics to order the correct part from spare parts dealers thanks to permanent connection to the Department of Motor Vehicles’ database. This avoids errors and the car repairer can give their customers fast and precise estimates. Not only: by inserting the number of kilometres the vehicle has done, the garage can immediately access the manufacturer’s maintenance program, with a description of the relevant work and spare parts.
Another way of overcoming the crisis is to offer roadworthiness services that have been a lot less affected by the crisis and should become stricter with the introduction, finally, of the new MCTCNet2 protocol. Like the Euro directive, inspections are one of those fundamental legislative supports for the automotive supply chain. Together with the increase in exports, the offer of new products, services and remanufactured spare parts could be one of the starting off points for recovery.