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Strategic Analysis of the North American Automotive OES Channel

Strategic Analysis of the North American Automotive OES Channel

Top Level Solution Trends Possible for the OES Channel Improving customer convenience and certain price control techniques will reduce customer migration from OES.

Automotive OES Channel: Top Level Solution Trends, North America, 2014

OES service locations—at a numerical disadvantage

Problem: Dealership locations are far less numerous than IAM locations. This negatively impacts consumer convenience.

Challenge: Dealership costs are much higher than aftermarket service locations, and service only accounts for a fraction of dealership revenue. Dealership location and count, therefore, cannot be driven by OES potential.

Strategy: Develop dedicated OES service centres, specializing in the most common maintenance tasks, to combat customer migration to the IAM.

Result: Improving customer convenience will eliminate the biggest cause of consumer channel migration. Location convenience, repair time, and hours of availability can be improved through a stand-alone service center.

OES parts and service—outcompeted on price by IAM competitors

Problem: OES parts and service pricing is generally higher than those of the IAM. Despite quality advantages of OE parts and service, consumer migration continues to occur because of pricing.

Challenge: Average pricing is higher because of tight margins on parts and high technician training, labour, and overhead costs for service. Lowering prices, in most cases, would negatively impact profitability.

Strategy: Superior part quality must be emphasized to justify higher pricing through value-added services such as extended warranty. Service pricing could be adjusted through a tiered labor rate which varies based on service and location—quick service locations and minor maintenance have the lowest labor rate.

Result: Price control techniques will restrain channel migration while preserving margins, allowing the OES channel to remain competitive with the IAM.

Vehicle service requirements and opportunities—shifting

Problem: The technology installed on new vehicles will generate service requirements and opportunities that the OES channel must be positioned for in order to benefit from.

Challenge: Vehicles remain in the OES channel only for the first 􂀀 to 􂀀 years. Because of this, the servicing of certain lifetime components, such as a hybrid battery pack or telematics system, are not likely to be performed in OES channel.

Strategy: OES locations should consider the creation of technology-specific VSCs, such as hybrid powertrain VSC. This will secure maintenance revenues for the vehicle early, while it is still in-channel, and provide the consumer greater convenience and quality assurance of OE service.

Result: Capturing maintenance for the next generation of vehicles will ensure future revenues, based on existing OES competitive advantages and requiring little investment.

About this report

This research service offers a strategic analysis of the original equipment service (OES) channel of the North American automotive aftermarket. This channel is made up of franchised automobile dealerships offering parts and service to consumers, in competition with independent garages and distributors. The study includes revenue forecasts and analyzes opportunities specific to the OES channel, including telematics and private-labeling. Consumer insights are offered through the inclusion of customer research. Also, research includes profiles of major dealership groups and analysis of their strategic approaches to increasing parts and service revenue. The study period is 2011 to 2021 using a base year of 2014. Major conclusions are presented.

  • Executive Summary
    • Executive Summary-Key Highlights of 2014
    • Top Level Solution Trends Possible for the OES Channel
    • OES Competitive Positioning in the Minor Maintenance Market
    • Best Practices Implemented by OEMs
  • Research Scope, Definitions, and Segmentation
    • Research Scope & Definitions
    • Key OEM, OES, and IAM Groups
  • Research Objectives, Background, and Methodology
    • Research Aims and Objectives
    • Key Questions this Study will Answer
    • Research Background
    • Research Methodology
  • Automotive OES Channel Demand Analysis
    • Automotive OES Channel-Light Vehicles in Operation by Country (Trends)
      • Table Automotive OES Channel: Light Vehicles in Operation by Country, North America, 2011-2021
    • Automotive OES Channel-Light Vehicles in Operation by Type (Trends)
    • Automotive OES Channel-Light Vehicles in Operation by Model Year (Trends)
    • Automotive OES Channel-Average Vehicle Age (Trends)
      • Table Automotive OES Channel: Average Vehicle Age, North America, 2011–2021
    • Automotive OES Channel-Vehicles in Operation by Brand (United States)
    • Automotive OES Channel-Average Annual Use Trends (United States)
      • Table Automotive OES Channel: Average Annual Use, United States, 2011-2021
    • Automotive OES Channel-Top Trends
  • Parts Analysis
    • Automotive OES Channel-Manufacturer-level Market Size by Channel for Replacement Parts
    • Automotive OES Channel-Parts Revenue by Distribution Channel at the Manufacturer Level
      • Table Automotive OES Channel: Distribution Channel Revenue Forecast in Total Aftermarket Replacement Parts, North America, 2011-2021
    • Automotive OES Channel-Manufacturer-level Replacement Parts Revenues in the Total Aftermarket
      • Table Automotive OES Channel: Manufacturer-level Replacement Parts Revenues by Category in Total Aftermarket, North America, 2014-2021
    • Automotive OES Channel-CAGRs of High Growth Categories in the Aftermarket
    • Manufacturer-level Aftermarket Parts Revenues
    • Private Label Opportunity for Parts in the IAM Major Challenge for OES Channel
    • OEMs' Competitive Strategies to Private Labels
  • Service Analysis
    • Automotive OES Channel-Service/Repair Analysis
    • Revenue Shares for Minor Maintenance Services Indicative of Channel Position in Total Service Market
    • Average Service Pricing by Channel in Minor Maintenance Market
    • Aftermarket Service Centers by Type
      • Table Automotive OES Channel: Aftermarket Service Centers by Type, United States, 2011-2021
  • OES Channel Analysis
    • Automotive OES Channel-Parts and Service Market Size and Forecast
    • Average Technician and Bay Count by Aftermarket Repair Location
      • Table Automotive OES Channel: Total Technician and Bay Count by Aftermarket Repair Location, North America, 2014
    • Usage of In-vehicle Telematics-Top 3 Market Highlights
    • Collision Industry Declines to Restrain OES Channel Revenues
  • OES Channel Opportunity Analysis
    • 5 Key Opportunities for the OES Channel
    • OEMs' Aftersales Management through Connected Car Foundations-Counter Measures for Lost Opportunities
    • Installed Base for Automated Service Devices Growth Forecast
    • OES/Dealerships Future Growth Outlook
    • Vehicle Service Contract (VSC) Business Models
    • Mapping the Mainstream Adoption of Technological Developments in Powertrain, Safety, and Telematics
    • Maintenance and Repair Opportunities in Hybrids and Electric Vehicles
  • Consumer Attitudes toward Maintenance and Repair through the OES Channel
    • Consumer Behavior Trends by Category
    • Top 10 Reasons for Selecting the OES Channel for Minor Maintenance
    • Top 10 Reasons for Switching from OES Channel for Minor Maintenance
    • Critical Factors that Influence Consumer Migration to the OES Channel for Minor Scheduled Maintenance
    • Service Channels for Vehicle Service
    • Overall Satisfaction and Future Intentions with Recent Vehicle Service
    • The OES Channel Faces Close Competition for "Other" Maintenance Work
  • OEM Benchmarking Analysis
    • Dealership Locations and Vehicle Population by OEM
    • Parts and Service Revenue as Percentage of Total OEM
    • Competitive Benchmarking of OEMs in the Aftermarket (IAM + OES)
    • In-vehicle Telematics Service-Which OEMs are Leading the Way?
  • OEM Profiles-General Motors
    • General Motors-Overview
    • General Motor2s Customer Care & Aftersales (GMCCA)-Profile
    • General Motors-In-vehicle Telematics Service: OnStar
    • GM's Prognostic/In-vehicle Sales Capabilities
  • Ford Motor Profile
    • Ford Motor-Overview
    • Ford Customer Service Division (FCSD)-Profile
    • Ford Motor Aftersales Management
    • Ford Motor-In-vehicle Telematics Service: SYNC, MyFordTouch
    • Ford Motor's eRetailing Strategy
  • Fiat-chrysler Profile
    • Fiat-Chrysler-Overview
    • Mopar Parts-Profile
    • Fiat-Chrysler-In-vehicle Telematics Service: Uconnect
  • Toyota Motor Profile
    • Toyota Motor-Overview
    • Toyota Service & Parts-Profile
    • Toyota Motor-In-vehicle Telematics Service: Safety Connect
  • Volkswagen Group Profile
    • Volkswagen Group-Overview
    • VW Group Parts Sales Operations-Profile
    • Aftersales Management-Counter Measures for Lost Opportunities
    • Volkswagen Group-In-vehicle Telematics Service: Car-Net
  • Conclusions and Future Outlook
    • Key Conclusions and Findings
    • The Last Word-3 Big Predictions
  • Appendix
    • Table of Acronyms Used
    • Planned 2015 Research

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