Lang Aftermarket iReport: Distribution changes brand use by repair shops
“Lang Marketing earlier this year analyzed brand use by repair outlets in two separate but comparable metro markets, one with a local Direct-Selling Import Warehouse and another without. Findings revealed significant differences between the two markets in the brands used for foreign nameplate repair by Service Stations & Garages and Foreign Specialists.
“Brand use differences between these two comparable markets were apparently driven by whether or not OE-Supplier and Foreign brands were available from a local Direct-Selling Import Warehouse.”
— Jim Lang, publisher, Lang Aftermarket iReport
Product Distribution Impacts Brand Use
Lang Marketing found big differences between two comparable metro markets in brand use among Service Stations & Garages and Foreign Specialists conducting foreign vehicle repair. One market had a Direct-Selling Import Warehouse and the other did not.
Service Station & Garage Differences
The most significant brand differences in foreign nameplate repair existed between the groups of Service Stations & Garages in each of the two markets studied.
There are two reasons for this: Service Stations & Garages already conduct the largest vehicle repair volume, and they are rapidly expanding their foreign nameplate repair volume.
Foreign Specialists Choose Alternatives to OE Brands
Lang Marketing found that the presence of a Direct-Selling Import Warehouse in a market tends to shift Foreign Specialists’ brand use from OE Brands to OE-Supplier Brands (brands from companies that supply OE parts to vehicle manufacturers and also sell to the aftermarket) and Foreign Brands (brands of foreign parts manufacturers that are not OE Suppliers).
In many cases, OE-Supplier Brands provide products that are identical or very close to their OE products in appearance, fit, and quality.
Shift Away from Domestic Brands
While Foreign Specialists generally change from OE Brands to OE-Supplier Brands or Foreign Brands when a Direct-Selling Import Warehouse enters a market, Service Stations & Garages show similar but slightly different tendencies.
Service Stations & Garages often switch from OE Brands and Domestic Brands to OE-Supplier Brands and Foreign Brands when repairing foreign nameplates.
Service Stations & Garages, in some cases, increase OE Brand use, if the local Direct-Selling Import Warehouse has OE Brands available. These OE Brands are generally classified as gray market products (OE Brands sold outside of the OE channel).
Reduced OE Brand Use
With some exceptions, the general impact of a local Direct-Selling Import Warehouse on brand use by Service Station & Garages and Foreign Specialists is the reduced use of OE Brands and Domestic Brands and an increased use of OE-Supplier Brands and Foreign Brands.
Two Major Reasons for Brand Use
The use of OE-Supplier and Foreign Brands in foreign nameplate repair is increasing for two reasons.
First, foreign nameplates are rapidly increasing their share of vehicles across the U.S., and they now constitute over half of vehicles in the repair-age sweet-spot.
Second, the local availability of OE-Supplier Brands and Foreign Brands is increasing in many markets, reflecting the growing presence of local Direct-Selling Import Warehouses and Ecommerce Sellers.
Six Major Takeaways
- Lang Marketing found some big differences between two metro markets in the brands used in foreign nameplate repair by Service Stations & Garages and Foreign Specialists, depending on the presence (or absence) of local of Direct-Selling Import Warehouses.
- The most significant brand differences in foreign nameplate repair existed between the groups of Service Stations & Garages in the separate but comparable metro markets studied.
- The presence of a Direct-Selling Import Warehouse tends to shift Foreign Specialists’ brand use from OE Brands to OE-Supplier Brands and Foreign Brands.
- In markets with a Direct-Selling Import Warehouse, Service Stations & Garages often switch from OE Brands and Domestic Brands to OE-Supplier Brands and Foreign Brands when repairing foreign nameplates.
- Much of the success of Direct-Selling Import Warehouses comes from providing customer service and parts delivery to Independent repair outlets that is superior to what local Dealers provide.
- The brand change among Independent (non-Dealer) repair outlets in the foreign nameplate aftermarket will continue to accelerate for two reasons: foreign nameplates are rapidly increasing their VIO share at the same time that OE-Supplier Brands and Foreign Brands are becoming available in more markets through the expansion of Direct-Selling Import Warehouse locations and the activities of Ecommerce Sellers.
Copyright 2020 by Lang Marketing Resources, Inc.
NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.