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Jobber News

LORDCO OPENS FLAGSHIP MEGASTORE IN RICHMOND B.C. • UNI-SELECT UNVEILS BUMPER TO BUMPER AS NEW STORE BRAND IN CANADA

MAGAZINE

APRIL 2016

Serving the Automotive Aftermarket Since 1931

Doug Reevey INCOMING CHAIR OF THE AUTOMOTIVE INDUSTRIES ASSOCIATION OF CANADA MEETING THE NEEDS OF A MARKET IN TRANSITION

AutoServiceWorld.com

Succession Planning: HOW TO LEAVE YOUR BUSINESS IN GOOD HANDS

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Jobber News

contents | april 2016 » vol. 84 no. 4

Serving the Automotive Aftermarket Since 1931

regular features

6 OVER THE COUNTER

COVER STORY

Lordco opens flagship megastore in Richmond, B.C.; Avenue Motor Works puts on popular brake seminar; changes to the AIA Ontario division committee announced; Strong turnout for Bestbuy’s 62nd annual meeting and trade show; 17th CAPS Ottawa expo a success.

Doug Reevey, Incoming Chair

Meeting the needs of a market in transition

12 MARKET TRACKER

Automotive Industries Association of Canada incoming chair Doug Reevey believes the most important part of his commitment to the association over the coming year is to continue to evolve the AIA, so that it remains a relevant business partner and resource for members as they continue through this period of transition. 16

in this issue

Millennials are re-inventing the DIY market For years, industry pundits have been telling us the do-it-yourself market is declining, as boomers become older and move out of the market or die off – but rumours of the death of DIY turn out to be exaggerated.

COUNTER TALK

Succession Planning

How to leave your business in good hands

When the time comes for you to leave your business, will you be ready? Succession planning is absolutely essential to making a smooth transition to new ownership and management.

Market Feature

How to navigate expanding motor oil specs Motor oils are growing more complex. Jobbers not only have to keep ahead of the changes that have happened with motor oils; now they now have to get up to speed on the fast-approaching ILSAC GF-6 standard for motor oils, set to be released next year.

Twitter: Andrew Ross (@JobberNews) |

JOBBER NEWS / APRIL 2016 |www.autoserviceworld.com

Why you should sell value over price Consumer spending on automotive products increased about 4% in 2015 compared with the previous year, and the top eight premium product categories surged over 15% in dollar growth. Clearly, consumers are choosing quality over price.

+ 4

departments

UpFront Why succession planning is important

30 New Products 32 Marketplace Advertisers Index

38 Publisher’s Comment

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with steve pawlett, editor » spawlett@jobbernews.com

Jobber News

FOUNDED 1931

WHY SUCCESSION PLANNING IS IMPORTANT

t is estimated that some 80% of private firms in Canada are family owned, and the majority of those have no succession plan. The aftermarket is a good reflection of this statistic, since it has a significant population of shop owners trending towards retirement age without a proper succession plan in place. To help owners learn more about succession planning, this issue features a detailed article on page 16 by wellknown international management speaker and business With the level coach Donald Cooper. Cooper has seen it all when it of consolidation comes to succession planning, and he offers excellent now happening advice on what’s important – and what to watch out for. in the afterWith the level of consolidation now happening in the market at aftermarket at the jobber level, it is vitally important for every family-owned jobber store to resolve the question the , it is of succession. Yet many owners stubbornly refuse to vitally important face this issue. The most common reasons for not doing for every family- so include resistance by the owner to let go of the reins; owned jobber fear of retirement; or inability to find or choose an store to resolve effective successor. Transferring ownership can be highly emotional and the question of succession. complicated by the attitudes of family members, which is why it is often ignored until it becomes a pressing issue. Often, the owner is then forced to make a very important decision in a short amount of time, with little or no due diligence. Leaving succession planning until it is too late almost always results in a forced, ill-informed decision with the business transferred into reluctant or incapable hands. This can result in the business becoming severely disrupted, as arguments take place over who should own or run the business. This lack of leadership could have a disastrous effect on sales and morale within the business. In some cases, transferring ownership and control of your business to a family member might not be possible or feasible. After careful consideration, you might conclude that a current employee, someone who knows the business and is committed, is best placed to take the business forward. If such a person does not exist, you might be forced to bring someone in from the outside. Another option is selling the business outright. There may be a need to raise cash (perhaps to fund retirement), the absence of a suitable successor, or a family that has no desire to continue its involvement in the business. Deciding to sell can be tough for owner-managers, who might feel reluctant to let go of a business they have nurtured for years. Careful preparation will help to lessen anxiety, until you are sure you have found the right buyer. Knowing exactly how, when, and to whom the ownership of your business will be transferred is the best way for you to maximize your returns and avoid a disastrous transition. Choosing the right successor or buyer and making sure it happens at the right time is the best way to ensure a happy retirement and the ongoing success of the business. However difficult, it is a necessary part of the process. It’s never too soon to start. JN

jobber level

Jobber News is Canada’s longest-established publication serving the distribution segment of the Canadian automotive aftermarket. It is specifically directed to warehouse distributors, wholesalers, machine shops, and national accounts. Editor | Steve Pawlett (416) 510-6839 E-Mail: spawlett@jobbernews.com Contributing Editor | Martha Uniacke Breen E-Mail: mubreen@sympatico.ca Contributing Writers | Andrew Brooks, Mark Borkowski, Tom Venetis Art Director | Barbara Burrows Managing Director, Auto Div. & National Sales Kathryn Swan (416) 510-5221 E-Mail: kathryn@newcom.ca Publisher & National Sales | Andrew Ross (416) 510-6763 E-Mail: aross@jobbernews.com Quebec & Eastern Canada Sales Director Denis Arsenault, (514) 947-7228 E-Mail: denis@newcom.ca Advertising Production Manager, Print/Digital Kimberly Collins (416) 510-6779 E-Mail: kim@newcom.ca Print Production Manager | Phyllis Wright (416) 510-6786 Circulation Manager | Lilianna Kantor (416) 614-5815 E-Mail: lily@newcom.ca

Jobber News is published by Newcom Business Media Inc. All rights reserved. Printed in Canada. The contents of this publication may not be reproduced or transmitted in any form, either in part or full, including photocopying and recording, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior consent. Canada Post Canadian Publications Mail Sales Product Agreement No. 40063170 “Return Postage Guaranteed” Send change of address notices, undeliverable copies and subscription orders to: Circulation Dept., Jobber News, 80 Valleybrook Drive, Toronto, ON M3B 2S9 Jobber News Magazine (ISSN#0021-7050) is published monthly by Newcom Business Media Inc., 80 Valleybrook Drive, Toronto, ON M3B 2S9 From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us.

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www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

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over the counter | UNI-SELECT UNVEILS BUMPER TO BUMPER AS NEW STORE BRAND IN CANADA

CRP INDUSTRIES INC. CEO ELECTED TO IMPORT VEHICLE COMMUNITY EXECUTIVE LEADERSHIP COUNCIL Daniel N. Schildge, CEO of CRP Industries Inc., parent company of CRP Automotive, has been elected to the Import Vehicle Community Executive Leadership Council. The Import Vehicle Community was formerly known as Auto International Association. Schildge will play an active role in helping to develop and grow the organization to better serve the import vehicle community.

Uni-Select Inc. has announced “Bumper to Bumper – Canada’s Parts People” as the new identity for its growing network of Canadian independent automotive wholesalers and corporate stores. In the coming months, Uni-Select says it will be rebranding all of its corporate stores under the Bumper to Bumper banner. In the Canadian Prairies there are currently over 100 independent customer Bumper to Bumper locations, most of which will be re-imaged with the new Bumper to Bumper brand over time. In addition, the Bumper to Bumper brand will be available to its 1,150 independent wholesalers across Canada, which expands the brand’s presence nationally. The brand will provide a higher level of product consistency as well as enhanced merchandising, marketing, and advertising programs. “The launch of our new national brand represents an important milestone for our Canadian Automotive Group. With this new brand strategy, we will create a national synergy and identity, consistent from coast to coast. Bumper to Bumper is not just about an image; it is everything that Uni-Select stands for: the quality of its products and the customer experience,” says Gary O’Connor, president and chief operating officer of Automotive Canada. “Today’s announcement reaffirms our commitment to aggressively expand our Canadian automotive business and build for the future. This is the next step in the evolution in supporting our longtime independent customers across the country by

building a national brand supported by our national distribution network. We are better positioned than ever to be the leader in the automotive aftermarket from coast to coast,” adds Henry Buckley, president and chief executive officer of Uni-Select. Much more than a brand name, Bumper to Bumper is also a program offering auto parts distributors a broad range of solutions. The Bumper to Bumper banner is a turnkey program for wholesalers looking for complete program support, a strong brand image, and a very aggressive go-tomarket approach. The Auto Parts Plus store brand remains an important part of the firm’s strategy to support those independent customers who prefer a menu-driven approach. The Bumper to Bumper name has considerable history in Canada. Bumper to Bumper was introduced to the Canadian automotive aftermarket in 1977 and began with two stores. Over the years, the brand presence expanded to the Prairies and entered the Uni-Select fold in 2006. Today, over 100 auto parts stores operate in Western Canada under the Bumper to Bumper banner. “The new logo features a strong and clean word mark. Bumper to Bumper is complemented by an icon that represents two bumpers coming together, from front to back, thereby illustrating Uni-Select’s commitment to covering all parts for a wide range of vehicles. We are Canada’s Parts People, and this new image will help us communicate the message that we value our Canadian roots and values,” adds O’Connor.

17TH CAPS OTTAWA EXPO A SUCCESS CAPS Auto Parts & Tires’ 17th Annual

Expo at the EY (Ernst & Young) Centre in Ottawa on March 3, 2016 brought together 1000 attendees and over 60 vendor companies for a memorable trade show. “We are committed to providing superior products and services with the highest level of quality to our valued customers,” says CAPS owner Chuck Berthiaume. “We are pleased at how our community expo continues to grow each year.” Highlights of the event included a surprise performance by Cirque du Soleil performers, and the thrill of winning a brand new 2015 Nissan Micra by a lucky CAPS customer. For the first time, Ottawa Secondary School students were invited to the show. Over 300 students attended the EY Centre 6

to walk the show and watch industry panel presentations. AIA Canada was also on hand to promote apprenticeship and scholarship opportunities to future industry prospects. CAPS has been serving the Ottawa region for over 20 years from three locations.

CAPS Auto Parts & Tires’ 17th annual Expo at the EY (Ernst & Young) Centre in Ottawa on March 3, 2016 brought together 1000 attendees and over 60 vendor companies. Seated, left to right: CAPS’ VP of operations, Ghazi Mankal; CAPS VP sales and marketing, Dawn Stoeckl-Petric; and CAPS owner Chuck Berthiaume.

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

For anyone who likes to see the road theyâ€™re driving on. ANCOwipers.com ÂŠ2016 Federal-Mogul Motorparts Corporation. All trademarks shown are owned by Federal-Mogul Corporation, or one or more of its subsidiaries, in one or more countries. All rights reserved.

over the counter | AVENUE MOTOR WORKS PUTS ON POPULAR BRAKE SEMINAR Avenue Motor Works Inc. and ACDelco had

MACS BOARD OF DIRECTORS RECOGNIZES MIKE DAWSON The board of directors of the Mobile Air Conditioning Society (MACS) Worldwide recognized Michael Dawson of T/CCI Manufacturing Inc. of Decatur, Ill. for exemplary service during his years as a member of MACS board of directors. Dawson was recognized with the Charles L. Braswell Service Award, an award reserved for outstanding individuals who unselfishly provide steady leadership and always go above and beyond in their stewardship of the Society. Dawson is retiring from the board and T/CCI Manufacturing in 2016.

an overwhelming response to their recent joint seminar on advancements in brake technology. The seminar, held at Avenue MW’s Barrie, Orangeville, and Woodbridge, Ontario, locations, attracted 200 technicians. Avenue Motor Works, along with major brake parts supplier ACDelco, have several reasons for conducting these informative brake clinics. “Since brakes are such an integral part of the repair business, and historically higher in warranty than other aftermarket product lines, we took the time to get to the bottom of recurring issues that have frustrated many technicians for quite a few years,” explains Avenue Motor Works sales manager Steve Gruhl. ACDelco instructors Wally Marciniak and Nick Viveiros covered a wide range of topics, including the importance of ensuring the yaw sensor and steering sensor are properly adjusted after an alignment. Overlooking this step could lead to one wheel showing more brake wear, causing the sensor to transmit an understeer signal to the computer. Hubless rotors also require attention to detail. “If you have any rust or debris between those two parallel surfaces, you will have pedal pulsations. It’s not going to happen immediately, but over time you will get this,” advised Viveiros. “It was a real eyeopener on the new brake technology,” says Tim Adams of Adams Service Centre on Weston Road in Toronto. “We have experienced some problems with premature brake wear and we were trying to figure it out, so when they brought up this information on traction control and how it works, it was very helpful. “What I liked most was the fact that it wasn’t a four-hour seminar where after an hour your head is nodding after a long day. They got right to the nuts and bolts of it and gave us the goods, and left me with the impression that if I needed to

Steve Gruhl, sales manager, Avenue Motor Works, called out the winning tickets for over $1000 in prizes that were given out at the end of the seminar.

throw an email to them, they will help out. “It was nice that they focused in on the new technology and how brakes are working. “I think that in the automotive repair industry, we don’t educate enough,” continues Adams. “There are lots of training tools out there with all the online offerings from manufacturers and suppliers and industry journals like Jobber News, but we don’t take the time to really process it and use it to our advantage. At the end of the day, when you get home and put your feet up, the last thing you want to think about is researching new braking systems.” “The attending technicians have been in the industry for some time and were pleased to be updated on the latest technology and learn a few new things,” adds Gruhl. “The newer technicians in the industry particularly liked the new ACDelco brake technology that was demonstrated, and the information on the forecasted changes to how brake jobs will be done in the future. “In fact, we had such a good response from our sessions this year that we have decided to bring Wally and Nick back to run another seminar,” adds Gruhl.

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over the counter |

STRONG TURNOUT AT BESTBUY 62ND ANNUAL MEETING AND TRADE SHOW

Bestbuy Distributors’ 62nd Annual General Meeting for Shareholders was held in Toronto on February 26th, 2016. The two-day event brought together Bestbuy members from across Canada and vendors from across North America, to attend meetings and networking events. A highlight of the AGM was the gala. There was a strong turnout for the Friday evening cocktails and dinner. The crowd was entertained by comedy magician Jean Boucher, who performed a mind-boggling show. Shareholders from across Canada elected Bestbuy’s 2016 Board of Directors. Re-elected were chairman Douglas Squires of Colonial Auto Parts and APM Limited; vice-chairman Brad Nahorney, Sapphire Auto (IDL); secretary/treasurer Gary Thibault, The Partsman; Gino Morelli, Pieces d’auto G.C.M.; Rob Dow, Jack Dow Auto; and Scott Anderson, Peterborough Automotive. Bestbuy also welcomed new directors Andre Dimopoulos, Dorval Auto Parts, and Deanna Bosschaert-Gruhl, Avenue Motor Works. President Jeff Van de Sande and chairman Douglas Squires had the honour of announcing and presenting the 2015 Horace J. Pratt Award for Supplier of the Year to ProMax Auto Parts Depot, in recognition of the firm’s excellence in service, sales performance, and support. Ramzi Yako, Sam Yako, and Doug Curliss were on hand to accept the award. The organization also presented its annual contribution to support the Family Heart Centre at the Hospital For Sick Children in the amount of $25,000. Dr. Robert Hamilton, director of cardiology, was on hand to accept the donation. Bestbuy has been supporting this worthy cause since 1986 and has contributed more than $775,000 to date. During the evening, Bestbuy had the pleasure of formally welcoming Simon Vermette of Demar Pieces Auto, and presented a Bestbuy Code of Ethics plaque. Bestbuy also presented Service Recognition Awards to Colonial Auto Parts (50 years); Peterborough Automotive (30 years); The Partsman (25 years); and Entrepot Auto Quebec (10 years). A very special award named after the late William Elton has only been presented a few times over the years. It originated as an outstanding shareholder award, but was recently changed at the request of the Elton family to include Bestbuy vendors and staff. This year Bill Hay, formerly of Dayco, was honoured with the award for his outstanding contributions to Bestbuy and for his friendship. The AGM concluded on Saturday with a warehouse trade event at Bestbuy’s Mississauga distribution centre. The event had ninety-two vendor companies on hand, eager to discuss new business developments with Bestbuy members. 1. Bestbuy’s Board of Directors donates $25,000 to Sick Kids Hospital. First row (left to right): Douglas Squires, Deanna Bosschaert-Gruhl, Dr. Robert Hamilton, Gino Morelli, Rob Dow. Back row (left to right): Jeff Van de Sande, Brad Nahorney, Scott Anderson, Andre Dimopoulos, Gary Thibault.

2. Douglas Squires presents the Horace J. Pratt Award for 2015 Supplier of the Year to ProMax Auto Parts Depot. Left to right: Squires, Doug Curliss, Sam Yako, Gina Yako, Jeff Van de Sande, Ramzi Yako, Fatin Yako. 3. The William Elton Award was given to Bill Hay. Left to right: Douglas Squires, Jane Hay, Stephen Squires, Hay, Jeff Van de Sande.

CHANGES TO AIA ONTARIO DIVISION COMMITTEE ANNOUNCED At the recent AIA Ontario Division Meeting, Kevin Patterson announced that although he will stay very involved, he would be stepping down from the role of chairman for the Ontario division to take a new role as director, Ontario Region, DC Operations & Associate Sales, for NAPA Auto Parts. AIA Canada also announced that Joe Mercanti, channel sales manager responsible for all national and regional

chain accounts for Worldpac, has agreed to take on the role of Chairman of the AIA Ontario Division. With over 40 years of experience in the aftermarket industry at all levels of the market, Joe brings a wealth of knowledge to the division. Prior to his role at Worldpac, Joe held positions with other aftermarket companies including Bosal, Mevotech, and Ultra-Fit Manufacturing. Brad Thomas, district manager for

Mevotech, has also agreed to take on the role of vice-chairman for the division. Brad is passionate about the automotive aftermarket and has been working in the industry for over 35 years. With a background in electronics and marketing from Humber College, he achieved his CSP Designation from CPSA and has ASE Certiﬁcation. Prior to Mevotech, Brad’s work experience includes roles at Canadian Tire, Volkswagen, and NGK Spark Plugs.

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

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On February 1, 2016, Lordco Auto Parts opened the doors of its largest store ever. In fact, at 33,500 square feet, it may very well be the largest automotive retail store in North America. Located in the Bridgeport area of Richmond, British Columbia, the store not only boasts the widest selection of automotive parts and accessories under one roof, but it addresses many of the logistical concerns the company has faced in one of the largest population centres in B.C. When the original Richmond location on Number 3 Road opened in 1993, it was perfectly located in the heart of the city’s retail centre. But 22 years of development and phenomenal population growth eventually created congestion and delivery problems that needed to be addressed. When the retail complex was purchased as a teardown for a condominiums redevelopment, Lordco was on the lookout for a new, bigger location, preferably in the Bridgeport area, now the de facto retail shopping destination in Richmond. “We had about 12,500 square feet at the old Richmond location, and it was a busy location so we knew we needed more space. When Future Shop announced it was closing some of its locations, we approached the landlord at that location and things fell into place,” explains Lordco CEO Doug Coates. Located at 2760 Sweden Way in Richmond, the store is in the same complex as Home Depot and Staples, and there is an Ikea store located across the street. The new flagship store opened on schedule and sales were well over typical one-day receipts. “It’s a busy, high-traffic area with great signage and lots of parking, and there are a lot of automotive repair shops and auto bodyshops on this side of town,” adds Coates.

Although the Lordco team had been looking at new destinations for well over two years, the six-month notice of the demolition clause in the original lease put some pressure on the move-in date. Also, while typically, a job of this size and complexity would take three months to complete, meeting municipal prerequisites meant that Lordco had to compress the move into six weeks. In spite of the tight schedule, the Lordco team was able to make it happen. “There was probably a day or two when we had 50 or 60 people working on the site to get it ready to open,” says Coates. Samantha Coates, vice-president operations, coordinated her merchandising teams, and Kevin Bennett, who heads up Lordco’s in-house construction operation, coordinated the leasehold improvements. “Samantha and Kevin and their crews did an amazing job. When you have people like that on your payroll, it gives you far more flexibility and you can get things done much more quickly,” explains Coates. “We had to move fast.” Lordco is well known for carrying a wide range of products, and the additional space at the new Richmond location is already fully utilized and is impressive. “We have a consumer hoist out front, meant for car storage or for a home shop. It runs on 110 volts and is equipped with wheels, so it can be moved around. We also have a separate truck accessory area in the store, which has a very different look to it, with far more truck accessories on display at this location,” explains Coates. “The extra space will also allow us to introduce a number of consumer interactive innovations currently in development. Our intention is to then use the new ideas throughout the Lordco chain.”

JOBBER NEWS / APRIL 2016 |www.autoserviceworld.com

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LORDCO OPENS FLAGSHIP MEGASTORE IN RICHMOND, B.C.

The app puts technical knowledge and practical knowhow right on your smartphone, from selecting the right cut-off or grinding wheel, to saving and emailing a complete step-by-step finishing solution – including all part numbers.

market tracker | DIY trends

BY STEVE PAWLETT

The rationale behind this “ growing trend is simple: automobiles are staying in service longer, and are becoming an investment, rather than an expense.

”

or years, industry pundits have been telling us the do-it-yourself market is declining as boomers become older and move out of the market or die off. The younger generations of car owners who follow the boomers, we have been told, are just not as inclined to do their own repairs, so there really is no one to take the boomer generation’s place. However, new research says just the opposite is happening. Do-it-yourself

automotive repair has become one of the fastest-growing consumer trends in Canada and the United States. The latest reports say it is flourishing, based on the parallel growth in home DIY projects. Fuelled by more than a decade of consumer-empowering messages from home maintenance store chains such as Home Depot and Lowe’s, homeowners who have found DIY to be a route to sustained cost savings in home

improvement have turned their attention to the garage. The statistics are very appealing for jobbers. In a 2013 DIY study by AutoMD, 37% of those surveyed reported that their financial situation has improved year over year, but 79% still choose to do their own repairs. Moreover, once automobile owners try DIY, they stay with it. According to the same AutoMD study, 90% of car owners continued on page 14

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

Photo: Primeop76 – iStockphoto

MILLENNIALS ARE RE-INVENTING THE DIY MARKET

THE NUTS AND BOLTS OF PROTECTING WHAT MATTERS.

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market tracker | DIY trends

and representing the largest generation of car drivers since the 1960s – are a growing ‘sweet spot’ for the next generation of automotive DIYers.

”

such as filters and spark plugs, sold better, too. But Millennials are not the shade-tree mechanics of decades gone by. They expect local part stock to be visible by smartphone, how-to videos to be available on their tablets, and tools and technologies offered for working on every aspect of their vehicles – from cleaning to maintenance to improvement. But these will be table stakes compared to what they will expect a decade from now: augmented-reality applications like the ones Inglobe Technologies recently demonstrated, will overlay how-to guides directly over an image of a car component, accessible by tablet or Google Glass. Millennials are not just driving the growth of automotive DIY; they are also building the next generation of DIY enablement technologies. The trend topography and competitive terrain of the automotive aftermarket retailing market are positioning the industry for landmark change over the coming decade. The key challenge is capturing a dominant market share among the growing ranks of automotive DIYers. Based on an analysis of the individual trends emerging in the industry, market leadership is expected to accrue to the organization that can achieve four key transformational points in the customer experience: applications, analytics, alliance, and assistance. Q Applications keep a retailer’s brand presence and value promise in the customer’s pocket or purse at all times. For DIY projects, that level of persistent connection provides a venue for aftermarket automotive retailers to shine. According to AutoMD, more than 80 million people turn to the Internet for automotive-related advice, many utilizing social media and mobile applications to do so. Because of the portability and highspeed data access rates of smartphones, apps can deliver an aftermarket DIY experience, from the garage to the store counter, like few other channels. But applications can do more than just provide project specifications and parts lists; they can also comparison-price parts via the Web. Doing so is expected to

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

Photo: 1905HKN – iStockphoto

Millennials, “ 1980 & 1994, those born between

who undertake DIY repairs are doing the same amount or more of their own auto repairs and maintenance this year versus one year ago. The rationale behind this growing trend is simple: automobiles are staying in service longer, and are becoming an investment, rather than an expense. According to a recent Polk report, the average age of cars and light trucks on Canadian and U.S. roads has increased to a record 10.8 years. The average age of passenger cars is now 11.1 years, while the age of light trucks, which include pickups and SUVs, has jumped to 10.4 years. Polk also reports that the average length of ownership of vehicles has grown to more than 53 months, an 18-month increase since 2001. Automobile owners are transitioning away from the “disposable-vehicle” mindset of the 1990s and 2000s and relying on DIY maintenance to keep vehicles running longer, at lower cost. DIY cost savings over that longer ownership horizon adds up to meaningful amounts, too. In the AutoMD study, 96% of respondents report saving more than $100 annually, while nearly 60% say they save more than $500, and 30% reported saving $1,000 or more. A longer vehicle ownership lifespan multiplies these annual savings into real fiscal gains over the decade-plus that vehicles are now expected to operate. Even as vehicles in service are getting older, the drivers interested in maintaining them are getting younger. Millennials – those born between 1980 and 1994, and representing the largest generation of car drivers since the 1960s – are a growing “sweet spot” for the next generation of automotive DIY. Hit hard in earning power by the Great Recession, Millennials increasingly rely on DIY auto maintenance and repair, according to a study by the NPD Group involving over 18,000 U.S.-based auto parts stores. The study showed that stores in neighbourhoods with significant Millennial presence registered greater dollar sales per store in multiple categories; hard part sales were 11% higher in such neighbourhoods, and tools and light application categories,

“

According to AutoMD, more than 80 million people turn to the Internet for automotive-related advice, many utilizing social media and mobile applications to do so.

”

become a key battleground for customer loyalty in aftermarket automotive parts retailing. NPD’s automotive aftermarket research found that only 37% of consumers rely on the same retailer for all of their automotive product needs. Almost half of DIY consumers compare prices from at least two different retailers. Q Analytics play an increasingly important role in every aspect of retailing, and the aftermarket automotive sector is a particularly good fit for analytic capabilities. Analytics can detect social media activity with potential brand impact, identify high-value target customer demographics within a store’s local area, and enable dynamic bundling and promotion of multiple products with a specific margin goal for each. More importantly, analytics empower the retailing system to “see” deeper into a customer’s shopping basket, providing a valuable knowledge support system for busy retail employees. Common projects such as changing a vehicle’s oil or replacing spark plugs are easy to support at the register. But brake, transmission, and engine projects require more parts, more tools, and more shop supplies. Analytics platforms can sense, based on the product bar codes being scanned at purchase, what a customer might be doing and can recommend, via screen pop, additional necessary supplies, discounts, or project guidance material. Q Alliance, as a retailing culture, is the next evolutionary step in advancing the value proposition of automotive aftermarket retailing. Selling parts and supplies is no longer expected to constitute the core of the customer

experience in the automotive aftermarket. Parts and supplies retailers, like their home DIY counterparts, must become project partners in a productivity alliance, working together to save customers time and money. That begins with a holistic awareness of customers’ project goals and experience levels, and evolves into a support structure for the customer at every level of expertise and interest. From in-store clinics and “group garage” weekend events, to printed and electronic guides, to common projects, the leaders in aftermarket automotive retailing are going to become knowledge and experience destinations, not just retail stores. Q Assistance rounds out the next generation of automotive aftermarket retailing services by adding a rich layer of empowerment and enablement to the three components mentioned above.

In AutoMD’s study, 91% of “do-it-for-me” (DFM) auto owners reported that they were open to performing their own repairs if they had easy access to how-to information. While explanatory videos and guides can go a significant distance toward bridging that knowledge and confidence gap, there is no substitute in many instances for live assistance. A knowledgeable partner can transform a challenging task into an easy, moneyand time-saving task. But asking store staff to step into that role requires either increasing retail staffing, or forcing other customers to wait. Neither is an ideal solution. JN

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JOBBER NEWS / APRIL 2016 |www.autoserviceworld.com

market feature | business management

BY DONALD COOPER MBA, CSP, HOF

SUCCESSION PLANNING

“Look

around your community or around the world to see where you’re needed. Helping others will add years of meaning to your life. This could actually be the most rewarding period of your whole life.”

When the time comes for you to leave your business, will you be ready?

uccession planning is absolutely essential to making a smooth transition to new ownership and management. You need to give it a good deal of thought in order to plan your exit strategy carefully, and to maintain the value you’ve built up in your business. A good succession plan will help the transfer of your business go smoothly, and allow you to maintain good relationships with employees and business partners. Succession planning helps you: • Protect the legacy of your business • Maintain a service for your community • Build value for your business • Provide financial security for your family and your stakeholders • Deal with unexpected events (illness, accident, or death) • Prepare for the future There are two kinds of exit planning: first, the ongoing process of developing “bench strength” throughout your business and preparing your

talented people for career growth and promotion; and second, preparing the business to operate without you, eventually and catastrophically. (“Eventually” means when you choose to leave; “catastrophically” means if you get hit by a bus before your time.) The next step in succession planning is estate planning. This focuses on planning the disposition of physical and financial assets during your later life, and at death. It’s the complex but very important process of working with experienced and trusted advisors, including a business and tax lawyer, accountant, financial planner, and life insurance professional. The cost of not getting this one right can be huge, both financially and in family strife. The truth is, “You’re going to die. Tidy things up.” An exit strategy is a plan focused on how and when you, as the business owner, will exit the business effectively and profitably. Key factors here will involve your heath; your ability to lead and manage; your level of interest in the business vs. other things; and the financial realities of the business and your life. For example, you may continued on page 18

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

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market feature | business management continue to own the business, but not manage it. Every business eventually gets sold – either to a family member, to a group of employees, or to an outsider. (Unless, of course, it just quietly and unprofitably fades away and closes.) So every business should be run with a successful transfer in mind. In order to make your business more saleable some day, you need to have a checklist of what a buyer is actually buying, to see what might need more attention in your business. There are 11 things that a buyer is willing to pay for. On a scale of 1 to 10, with 10 being excellent, you need to objectively rate your current performance in each of these 11 key areas. Then calculate your Salability Score.

thing to prepare your business for transition, but you also need to prepare yourself. How will you stay active, healthy, sane and engaged?”

healthy and growing cash flow, no one will want to buy your business, except maybe at a fire-sale price that you’re not going to like. A relationship with loyal and profitable customers. Profitable and loyal customers

Systems, processes, and technologies

that help deliver an extraordinary customer experience and world-class operational efficiency. Do you have up-to-date systems, processes, and technology, or are you always playing catch-up and making things up as you go along?

Patents, trademarks, or secret recipes

An industry that is growing and sustainable. Is the automotive repair

A trusted, clear, and sustainable brand is generally worth big money to a buyer.

It is the sum total of all the goodwill that you’ve built up over the years, one customer at a time. What are you known for and trusted for, that really matters to a lot of people with money to spend? A brand is a promise to deliver a consistent set of values, standards, and experiences that your target customers want in their lives. To have a clear brand, you must effectively communicate a clear promise about value, and values, that resonates with your target customers. Then you must live by and deliver that promise, every day. How do you score on this one?

business with a toxic, dysfunctional culture.

that provide premium pricing and protect the products, brands, or intellectual property of the business.

business growing in your market, staying about the same, or in decline? Are changes in lifestyle, demographics, property taxes, or other government legislation affecting the sustainability of automotive repair services in your market?

6 7 8 9 10

A culture of respect, efficiency, and accountability. Nobody wants to buy a

Machinery and equipment that’s current, efficient, and in good condition.

are the well from which future profits come. Do you have a large number of profitable customers or members who prefer you, are loyal to you, and go out of their way to do business with you? Do you have a database of those customers or members, and do you use that database to proactively communicate, add value, and nurture the relationship?

business that can’t survive without an owner who is about to leave. And no one wants a business full of mediocre, disengaged, or toxic employees. Your team is a big part of your business’s value.

Inventory and real estate. Inventory is a big factor in the value of your business, depending on its age and desirability. If you own the land and building in which you operate, that could be worth far more than the business itself. I generally advise clients to own the real estate in a separate real estate holding company and have your operating company pay your real estate company rent each month. Then, when it’s time to sell the business, you either get rent from the new owner, sell them the real estate separately, or invite them to relocate the business, and you sell the real estate to someone else – perhaps for a very different end use.

A clear and documented vision for

your business that allows a potential new owner to visualize and embrace the possibility of an extraordinary future. To calculate your Salability Score out of 10, recheck your individual scores to make sure you are being absolutely realistic. Then, total your score for the 11 points above, multiply that total by 100 and divide the answer by 110. Your Salability Score is ____ out of 10. The closer your score is to 10, the more saleable your business is.

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

Photo: Highwaystarz-Photography, Thinkstock

“It’s one

1 2

Exceptional, growing, and sustainable profitability. Cash flow is king. Without a

A world-class, capable, engaged, and empowered team. No one wants to buy a

So, how does your business rate on salability? What needs your attention and when will you start? It takes years to get a business ready to sell or transfer. Starting now is a good idea. To determine whether you are building a profitable and saleable business, or just buying yourself a job, consider these five questions. 1 Does most of the knowledge or customer value in the business revolve around you personally? 2 Are you barely making a living? 3 Are you in an industry or market that’s unattractive or confusing to most prospective buyers? 4 Are you in a type of business that others could easily start up on their own, without paying you a penny? 5 Have you “fiddled” the books to show little or no profit in order to avoid paying taxes?

If you’ve answered yes to any of these five questions, you’re probably in trouble when you want to sell your business. How do you know when it’s time for a transition? The short answer is that most people don’t know when it’s time. They can’t imagine their life without the business. It defines their value, it’s where they feel safe and in control, or they hate the thought of spending more time with their spouse. The business is their “neat fort,” and they don’t want to leave. From my experience as a business coach, here are five reasons to transition out of your leadership or ownership role. 1 You have all the money you need and now have other things you’d rather do. continued on page 20

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market feature | business management

“Look around your community or around the world to see where you’re needed. Helping others will add years of meaning to your life. This could actually be the most rewarding period of your whole life.”

John Warrillow, Built To Sell, available at www.builttosell.com/book. Gregory St. Arnauld’s excellent monthly newsletter on Succession and Exit Planning. Email gstarnauld@lewisreedallen.com to be put on the mailing list. Donald Cooper, Vision Critical Guide, available at donaldcooper.com.

owns half the shares in the company, by inheritance, but has never worked a day in the business. They’ve never discussed what will be a fair split of the proceeds when the business is eventually sold. This makes no sense, but I see this kind of “untidiness” all the time – and it always ends in a mess.

A real-life example of succession planning gone wrong I’m currently coaching a business owner in a different industry who woke up one morning and said, “I’m 67, I’m tired, and I just can’t do this anymore. I want someone to write me a big cheque so that I can walk out of here as soon as possible.” He called me for help and we quickly determined that he needs at least $5 million for the business, to pay capital gains tax and retire in respectable style. The problem is, his business is currently worth about $300,000…tops. When I told him that businesses in his industry typically sell for three to four times sustainable earnings, he flipped out. Nike stock trades at 35 times earnings, Lululemon at 26 times earnings, and Under Armour at about 85 times earnings. But small- to medium-size private companies sell for three to five times sustainable earnings. It seems unfair, but that’s reality. He has two adult kids in the business, and they think dad is going to hand it over to them as a gift. But there’s no way that they could run the business – except into the ground. As a further wrinkle, his older brother

Important points from this example: 1 First, your business is almost always worth less than you think or hope it is. The exception might be when your business is sitting on what has become a hugely valuable piece of real estate that’s now worth more than the business itself. 2 Second, it generally takes four to six years to get a business ready to sell at a decent price, and to put all the pieces of the financial and people puzzle in place to make that happen smoothly and profitably. A buyer won’t magically show up tomorrow, just because you’d like him to. 3 Then, there are the kids. In my experience, they’re usually not as smart, capable, or interested in the business as you think they are. Sorry! When they are interested in the business, and also capable of working in it and running it someday, you don’t have a problem. If they’re not interested and not capable, you also don’t have a problem. They’ll choose another career path. If they’re capable but not interested, you don’t have a problem. They’ll go their own way.

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

Photo: StockFinland – iStockphoto

Additional Resources

2 It needs someone else to take it to the next level – and you’re wise enough to know that. 3 You’re tired, and just can’t do it anymore. 4 It’s losing money, sucking you dry, and you don’t know how to fix it. 5 It, or some asset in it, is worth more to someone else than to you.

R E P L AC E M E N T A S S E M B LY

But, if they are interested but not capable, you have a succession planning and exit problem. They might work in the business, but they won’t be the wise choice to run it someday. That’s reality, and you’ll have to deal with it. If you have a number of children, and some of them help grow the business and some go their own way, how do you divide the assets of the business in your will? Does everyone get the same share of the business, or the proceeds of the sale as a birthright? Or do those who helped grow the business benefit from their hard work? This is a tough one – but “fair” isn’t always equal. And, by the way, your kids should go and work in somebody else’s business, preferably a very well-run one, for at least three years before they come to work full time in yours. 4 Next, we have the issue of other family members like brothers, sisters, or cousins in the business, or non-family partners. Respectful debate should be encouraged, but somebody has to be the clear leader and final decision maker, or the business will flounder. And no family member or partner should have the job they do, or the salary they do, if they’re not the best candidate available for the job. It’s bad business. Much of my business coaching work involves sorting out some of these kinds of messes. 6 Tidy up all loose ends with proper documentation. Discuss everything that needs to be discussed, come to an agreement, and then document that so there’s no misunderstanding, or worse, fights and lawsuits, down the road. Bonus Tip: Selling your business to family members or employees for a promise of future payment is always risky. If the business fails, you could lose everything. Get expert advice on how to structure, finance, and protect yourself in any such deal. When selling your business to a thirdparty buyer, never accept a two-part payment scheme where you get some of the money up front and the balance in a year or two – unless you’re happy with the first payment being the only payment.

Buyers typically offer a two-part payment in order to have time to make up a reason not to make the second payment. I see it all the time. Just say no.

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Prepare yourself for the huge change in your life It’s one thing to prepare your business for transition, but you also need to prepare yourself. How will you stay active, healthy, sane, and engaged? Here are the two questions that I ask my clients who are preparing to exit their business. 1 How can you be helpful? You’ve seen a lot, done a lot, and learned a lot. Who could benefit from all of that? Who could you mentor, coach, and encourage? Look around your community or around the world to see where you’re needed. Helping others will add years of meaning to your life. This could actually be the most rewarding period of your whole life. 2 What have you always wanted to try, do, or see? People joke about having a bucket list, but it’s actually a good idea. Make your list. You’ll be amazed at how many things you’ve put off. Now is the time to keep promises to yourself, your spouse, your family, and your community. Do you have a realistic ongoing and eventual succession plan for your business and your life? Whether you’re the business owner, or a manager in the business, this matters to you. Good managers will leave (and should leave) if they think the business has an uncertain future. JN

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JOBBER NEWS / APRIL 2016 |www.autoserviceworld.com

cover feature |

DOUG REEVEY

AIA INCOMING CHAIR

MEETING THE NEEDS OF A MARKET IN

transition Owner and president of Autotec Inc., Reevey joined the company back in May of 1997. At that time it was a meeting of two very different worlds. Reevey attended Dalhousie University in Nova Scotia and graduated with a degree in business commerce in 1993. From there he went on to work for Ernst & Young in the firmâ€™s auditing practice, ultimately obtaining his Chartered Accountancy designation in 1996. Looking for a change of scenery after four years in the accounting business, Reevey purchased Autotec Inc. in the fall of 1997, despite having no automotive experience whatsoever. This was a real challenge and great learning experience for Reevey, as he reshaped the business from the ground up. He is now in his 19th year with the company and has acquired a solid understanding of the business and the industry in which it competes.

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

BY STEVE PAWLETT

“We need to

continue to evolve our message and we need to get that message out to all of our members and drive it down to the grass-roots level. At the end of the day, we need to ensure that we are relevant to our members.”

utomotive Industries Association of Canada incoming chair Doug Reevey believes the most important part of his commitment to the association over the coming year is to continue to evolve AIA so that it remains a relevant business partner and resource for members as they continue this period of transition. “We need to continue to evolve our message, and we need to get that message out to all of our members and drive it down to the grass-roots level. At the end of the day, we need to ensure that we are relevant to our members,” explains Reevey. One ongoing trend AIA is following closely is the “consolidation curve.” The progress of the boomer generation into retirement is leading to a steadily increasing consolidation at the jobber and repair shop level. “There is no question that consolidation in our industry continues to occur. The last two industry segments to experience this are the jobber and the installer segments,” says Reevey. “When you look at it from AIA’s perspective, certainly consolidation means there are going to be fewer members; but we are going to find ourselves with larger members with different needs. This consolidation movement is fluid, and it certainly is nowhere near finished. It started at the manufacturing level, went down to the distribution side to the large WDs, and now we are seeing it play out in the last two frontiers – the independent jobbers and the repair shops,” he observes. “If you look at what has happened on the OE side, we now see entrepreneurs owning multiple dealership locations. The aftermarket is no different continued on page 24

JOBBER NEWS / APRIL 2016 |www.autoserviceworld.com

cover feature | Doug Reevey – AIA Incoming Chair

“If you look

at telematics, the connected car, or the self-driving vehicle, it’s going to require us as a group of professionals to be forwardthinking and innovative in our business models, to ensure we can capture the confidence of a motoring public.”

from the OEs in that regard. We will see these two market segments, jobbers and repair shops, continue to consolidate to the point where you will have one entrepreneur owning multiple locations, and this will lead to more efficiencies in the system and result in an overall better experience for the consumer,” he predicts. Despite the recent economic slowdown, modest growth is forecast for the aftermarket in 2016. New car sales have been at record levels for the last two years, and are expected to continue to grow but at a slower pace. This continued growth in vehicle sales will result in steady growth for the aftermarket. “However, what we are seeing on the front lines are consumers who bring their vehicle in for repair work, but are quick to put off maintenance service that they view as discretionary work,” he says. “Certainly, we need to do the best job we can in educating and informing our clients on the benefits of preventative maintenance, so they don’t view this service as discretionary spending, but rather as an investment.” Technology is another area where AIA is taking a proactive role. “Technology is changing the way business is being conducted throughout the supply chain – from diagnostic tools and online ordering at the installer level, to better tracking of inventory and delivery of kind at the distribution level, and the advancement and complexity of replacement parts. If you look at telematics, the connected car, or the self-driving vehicle, it’s going to require us as a group of professionals to be forward-thinking and innovative in our business models to ensure we can capture the confidence of a motoring public,” continues Reevey. “Those that choose not to embrace technology and stick their head in the sand are going to be left behind. There is no choice. The consumer is driving this technology advancement. The manufacturers are putting it in the vehicles because the consumers are requesting it. So my advice is, don’t stand in front of that tidal wave. Get on it and ride it. For those that want to resist change, just look at what happened to Kodak. They thought people were going to take pictures on film forever.” “The automotive aftermarket is a resilient group, and I am confident it will continue to serve the working community and the public at the highest standards, as it has in the past. The aftermarket is a business built on relationships, with much of it done face to face. But today it is important to learn to use social media tools to continue to get our

message out,” says Reevey. With the average age of business owners in this industry trending towards retirement, the AIA will continue discussions on the importance of succession planning through seminars and education programs. It also continues to address the ongoing challenge of finding suitable young people to replace aging staff members that are now at retirement age. “With the aging population of repair shop owners and jobbers who are trying to attract talented people to their businesses, I would argue the fact that we need to get in front of not only high school and college students but also middle school students aged 12 to 14, and get our message across about the opportunities in our industry. I certainly don’t think that our audience can be too young,” advises Reevey. “I see this as a great opportunity for younger students to get involved in our industry and make a wonderful living. These students need to know that this industry is a viable option, and it can be a very rewarding career. It’s a very large industry with a lot of moving parts. I think we need to drive this fact home to the students who are going to be buying these businesses.” AIA continues to work with community colleges and educational institutions such as the automotive business school of Canada at Georgian College in Barrie. In 2015, the AIA made a significant investment in Georgian College with the aftermarket student lounge. “This is an amazing time for young people to get involved in this industry. There are many different job opportunities in our industry such as finance, marketing, human resource, repairing vehicles, and parts sales. We have a great supply of opportunities; we just have to create the demand,” adds Reevey. “AIA has wonderful staff and leadership, and sometimes I think we don’t celebrate our wins enough. We need to be talking to our members more about all the good things that we are doing behind the scenes. Government relations is a great example of that. We are constantly meeting with provincial and federal politicians to drive our message home on a number of different issues, and sometimes our members don’t see all of that.” Reevey also has his sights on re-establishing a B.C. division. “We used to have a division in B.C., and we are working hard on re-building one there. We want to capture the entire country coast to coast to ensure that our members feel that we are representing everybody in Canada.” JN

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

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EXPANDING MOTOR OIL SPECS otor oils are growing more complex. Jobbers not only have to keep ahead of the changes that have happened with motor oils now; they now have to get up to speed on the fastapproaching ILSAC GF-6 standard for motor oils set to be released next year. Ian Hutchison is marketing manager, aftermarket, with Wakefield Canada Inc., blenders of the popular Castrol brand of motor oils. Hutchison says that in years past, a typical installer could profitably service his customers with just two grades of conventional motor oils. “This made inventory and cashflow management relatively easy for the installer to manage, and made the selling process relatively straightforward for the counterperson.” In the last few years, with increasingly stringent CAFE standards for improved fuel efficiencies and emissions for new vehicles being sold in North America, engine technologies have had to change. Tolerances and displacements are tighter, 26

and engines have to work hotter and harder. This has put special strains on blenders to come up with motor oils that can operate in such engines. “This has led to an industry-wide trend toward extensive grade and specification proliferation,” Hutchison explains. “This means that instead of two grades, a typical installer would have to stock, manage, and inventory a number of grades and specifications to meet the expanding variety of new cars.” Vehicle makers now mandate specific blends and grades of motor oils that are to be used with specific vehicles.

Examples of this are GM dexo1, VW 50501, and BMW LL03. “This creates a challenge for counter staff, who find themselves in the position of helping technicians choose the right oil for a particular vehicle, and advise them on the correct package size and overall management for their inventory,” says Hutchison. Dennis Favaro, marketing manager with Valvoline Canada, a division of Ashland Canada Corp., says jobbers are entering a world of increasing fragmentation and expansion of different continued on page 29

stringent CAFE standards “Increasingly for improved fuel efficiencies have led to an industry-wide trend toward extensive grade and specification proliferation.

”

IAN HUTCHISON, MARKETING MANAGER, AFTERMARKET, WAKEFIELD CANADA INC.

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

Photo: DNY59 – iStockphoto

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| motor oil

Photo: 4X-image – iStockphoto.com

applications within motor oils. “You can now have up to ten different 5W30 motor oils, with each one having a different specification and application. Some will be for diesel, others for gasoline engines, and some for specific makes of vehicles, such as ones for Audi and others for Volkswagen.” Peter Szarafinski, head of media relations international with Liqui Moly, says jobbers need to start thinking of motor oils today as similar to other vehicle components that are specific to certain makes and models. “For instance, a brake disc fits only to a certain car. Today, the diversity of motor oil standards, especially for European and Asian models, is quite great. The days of serving all cars with just one or two types of motor oils are definitely gone. “The complex motor oil landscape results not from motor oil producers, but from the car manufacturers,” Szarafinski continues. “Often the motor oil properties are defined at a very early stage, when a new engine is designed. As each car manufacturer follows different strategies in their engine design, they need different motor oils.” Finding the right oil match Because engines are now designed to use specific blends of motor oils, counter staff need to be able to correctly match motor oils to specific vehicle types and makes. There is no leeway now. The consequences of mismatching motor oils to vehicles can be catastrophic for today’s engines that operate on tight tolerances. Dave Schletewitz, Havoline brand manager with Chevron Lubricants, says that mismatching can lead to such things as equipment failure or shorter lifespans for some critical engine components. For the service shop, it can mean a tarnished reputation and potential liability for possible negative impacts to engine components, or even engine failure in some cases. “It is important for counter staff to understand the consequences of misapplication,” notes Scott Cline, national sales manager, lubricants, with Bluewave Energy, producers of the Shell

brand of motor oils. “Once upon a time, oil was pretty much oil. That’s not the case anymore. Vehicles and equipment are designed to work with specific products, and using the wrong fluid could produce catastrophic and expensive results. When counter staff understand the importance of making the right recommendation and use the tools available to them, the biggest benefit they will experience is the trust of their customers. If customers feel that they are receiving accurate and relevant information about which lubricants to use and why, they will trust this counterperson with more of their business.” “A counterperson would not process a customer request for a fuel pump or a set of brake pads without asking for basic information such as make, model, year, etc. Likewise, with lubricants the same principles apply,” adds Russell Arnot, technical manager, Klondike Lubricants Corporation. “It is in the counterperson’s and customer’s best interest to reference an OEM manual or database for the applicable type, grade, and any specifics that would apply, like any other part.” To help jobbers make the right choice in motor oils, blenders offer a wide range of online tools that allow counter staff to input make, model, and engine type to quickly find the correct motor oil for the vehicle. Blenders also offer training and sales support that can be called upon to keep jobber counter staff cognizant of the changes happening with motor oils. “Training and support are important components of Bluewave’s customer value proposition,” adds Cline. “We provide the tools necessary to recommend the right oils, point of sale support, [and] technical support. Every summer, we cross Canada providing our customers’ front-line staff with sales, product, trend, and application training. If you base your motor oil purchase on price alone, you are doing your staff and customers a disservice.” Favaro says jobbers will soon be carrying a larger inventory of motor oil products, but at the same time, they will need to ask installers more specific questions about the vehicles in the bays. “Jobbers will need to become more attuned to the application of those

JOBBER NEWS / APRIL 2016 |www.autoserviceworld.com

Jobbers will “ soon be carrying a larger inventory of motor oil products, but at the same time, they will need to ask installers more specific questions about the vehicles in the bays.

”

DENNIS FAVARO, MARKETING MANAGER, VALVOLINE CANADA

products and recommending the right product. So it comes down to saying something along the lines of, ‘That alternator will not fit every car, only a 2011 Jetta with a diesel engine.’ The same is going to have to happen for motor oils. There will be oils that are very specific to certain engines. Just as someone who calls in for an alternator and the jobber asks what is the make, model, year, and engine type, the same has to happen for motor oils. You will be asking for the make, model, year, and engine so as to recommend the right oil.” One major change jobbers will have to be aware of is the upcoming ILSAC GF-6 specifications for motor oils. This is going to be especially critical, as within the GF-6 specification there will actually be two specifications, driven by unique engine requirements set out by some vehicle manufacturers. According to Lubrizol’s website (http://www.gf-6. com/gf-6-specification-details), which follows and reports on the work being done on the new specification: “ILSAC GF-6 actually encompasses two potential specifications: GF-6A and GF-6B. The principal difference between the two 29

motor oil |

categories of oils concerns viscosity grade and high temperature, high shear (HTHS) performance. GF-6B oils would provide the same performance as GF-6A, but with the added aim of lower HTHS to deliver potential further fuel economy benefits. This offers the possibility of

potential GF-6B oils operating at viscosity ranges of less than 0W-20 once these new viscosity grades are defined and accepted by SAE.” Adds Antonio Ramos, marketing manager with Automobile Solutions Americas Inc., makers of the Veedol

Lubricants & GDI Engines: A Complex Relationship Within the past several years, gasoline direct injection (GDI) technology has had a beneficial impact on the passenger car market – OEMs have chosen this technology as a means by which they’ll achieve increasingly strict fuel economy goals. GDI is smart technology for this purpose: smaller GDI engines generate more power and can directly impact fuel economy targets. Industry experts anticipate that by 2020, approximately 39% of all cars produced globally will utilize GDI engines. In order for GDI engines to reach their full potential, the right lubricants are required. That means advanced additive technology, comprehensive testing and new considerations in the face of pressing challenges associated with GDI engines. Developers of the proposed GF-6 specification have accounted for these new challenges, incorporating new tests that will help ensure modern hardware is best enabled to provide heightened efficiency. GDI hardware allows for engine downsizing, or utilizing smaller engines to produce the same amount of power and torque as larger port fuel injected (PFI) engines. To accomplish those greater power and compression ratios, GDI engines operate by spraying fuel directly into the engine cylinder, providing a cooling effect. The cooling effect allows the engine to produce increased compression ratios and more torque, resulting in greater fuel efficiency. GDI engines can also incorporate turbocharger technology (TGDI), which recovers energy that is otherwise lost through exhaust systems to further increase fuel efficiency. A 4-cylinder GDI engine can generate the same levels of torque as a 6-cylinder PFI engine. Four cylinders produce less friction and maintain more energy than six cylinders, directly contributing to better fuel economy. The implication for lubricants While downsizing is a reliable path to reaching fuel economy goals, downsized engines run under more extreme conditions than traditional engines – and that requires heightened durability and protection from lubricants. GDI and TGDI engines rely on increased cylinder pressure, slower operating speeds and hotter temperatures to generate the power that allows them to operate more efficiently than PFI engines. However, due to these more severe operating conditions, there is concern over the following:

• Greater potential for oil oxidation, compromising the oil’s protection against wear

• Greater potential for fuel to mix with the lubricant, thereby increasing the potential for higher levels of acid and sludge

• Greater likelihood of increased oil consumption within the engine, leading to a shorter drain interval For these three reasons, shear stability – the measure of a lubricant’s ability to maintain its original viscosity and characteristics under potentially severe conditions – is very important in modern lubricants for GDI applications. A higher shear stability means the lubricant can withstand GDI conditions without succumbing to oxidation, mixing and increased consumption.

brand of motor oils, “Additionally, the GF-6 requirement will also have improved engine corrosion protection, oxidation control and will improve engine cleanliness. There will be a transition period, as with all new products, where you might find the GF-5 and GF-6 spec available in the market, so that will be important in the short term. I have known a lot of counterpeople who pick up on which vehicles and engines will need the new GF-6 and will quickly be able to recommend that their customer needs the new spec and why. “As far as the new SAE 16 spec goes, my understanding is that it will only be required on certain engines. It is engineered to improve fuel economy by reducing hydrodynamic friction between moving parts. This would mean that the oil is very thin, and from what I have read also has to operate at a much lower hightemperature range than previous oils.” Says Liqui Moly’s Szarafinski, “It is a widespread trend among car manufacturers to push thinner motor oils. The thinner the motor oil, the less the inner friction of the motor oil. This is a little piece of the puzzle to reduce fuel consumption and meet future emissions standards. But such motor oils [OW-20] only work for engines that are specifically designed for it. This is important to know for jobbers. Such oils used in conventional engines do not provide lubrication, and thus will kill the engine in a very short time. So doublecheck if this is really the right oil for that car when selling one of those super-lowviscosity oils.” “While the exact detail of the impacts of GF-6 and the impending lower viscosity oils has yet to be determined, it is safe to assume that technicians and jobber counter staff will have to deal with even more SKUs to accommodate these new requirements,” says Wakefield’s Hutchison. “This ultimately means that counter staff will be helping installers create a product suite to meet the needs of the consumer. That will likely mean that successful counter staff will – to some degree – act as ‘inventory consultants,’ helping repair shops juggle their investments in inventory.” JN

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

new products |

Transmission Service Kit CRP Automotive has introduced the Pentosin FFL2 Transmission Service Kit. The kit is designed for the required 40K mile service call on the new generation of Audi/Volkswagen (AVW) double clutch gear transmissions (DSG). CRP Automotive developed the new kit to make service operations easier and more convenient for shops. It includes the precise amount of Pentosin FFL2 Transmission Fluid in a 5L bottle, along with a Rein Automotive OE ﬁlter and drain plug washer. Pentosin FFL2 is the only OE First Fill and Service Fill transmission ﬂuid for the new generation of AVW double clutch gear transmissions. It is formulated on a fully synthetic oil-based technology for safe operation at even the highest thermal loads and features special clutch friction performance. CRP Automotive www.pentosin.net

Wiper Blades Denso Products and Services Americas, Inc., has launched EnduroVision, a new line of conventional wiper blades priced to meet the needs of motorists driving the vast majority of cars and light trucks on the road today. The EnduroVision line is now available in Denso’s newly issued 2016 Wiper Blade Catalogue. Available in 12-28 inch lengths, EnduroVision wiper blades have a durable steel frame with stainless steel backing to ensure reliable, long-lasting performance. A powder coating protects the frame from ultraviolet rays and corrosion, while steel brackets provide uniform pressure across the windshield to prevent chattering. In combination with a natural rubber insert, the brackets also provide a quiet, streak-free performance for the best possible view of road conditions in the rain. Universal connectors are available with 9x3 and 9x4 hooks, 3/16- and 1/4-inch pins, and 7 mm bayonets. Denso www.densoautoparts.com/catalogs/wiper-blades

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new products | Expanded Torque Wrench Line

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GearWrench has announced the addition of two new electronic torque wrenches to its popular Electronic Torque Wrench line. End users can now purchase the following new electronic torque wrenches: • SKU 85076: 3/8” Electronic Torque Wrench 7.4 - 99.6 ft-lb • SKU 85077: 1/2” Electronic Torque Wrench 25.1 – 250.8 ft-lb The new models are simple to use and offer users some additional features, including “Target Torque Alert,” which can be set to give a warning as the target torque setting is approached. This allows more control so there is less chance of overtorqueing a fastener. They also have the added beneﬁt of being able to measure in foot-pounds, inch-pounds, or Newton meters, which increases versatility. GearWrench Electronic Torque Wrenches are accurate, with a tolerance of +/- 2% for clockwise tightening from 20% to 100% of their full scale. The new electronic torque wrenches come in a blow-moulded case for secure storage, and are covered under a limited oneyear warranty. Additionally, calibration is warranted for 90 days from the date of purchase. Gear Wrench www.GearWrench.com

G.K Industries Ltd, a leading manufacturer of automotive filtration products is seeking a Full time Sales Representative for the Brampton Office. If you are a talented and competitive sales rep that thrives in a quick sales cycle environment, this job is for you. The successful candidate will play a fundamental role in achieving our ambitious customer acquisition and revenue growth objectives. Must be comfortable making dozens of calls per day, working with channel partners, generating interest, qualifying prospects and closing sales. SEND RESUME TO:

hr@gkindustries.com 32

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

Jonathan Dwyer ASE-Certiﬁed Technician Wayne, New Jersey

Mike Rowe Huge Fan of Stopping

IN THIS BUSINESS, YOU’VE GOT TO EARN YOUR STRIPES It takes more than fancy new logos to become the world’s most trusted supplier of OE and aftermarket friction. It takes an unwavering commitment to engineering that stretches back more than 100 years and drives us into the future. From materials to manufacturing to your shop ﬂoor, no matter which Wagner® products you recommend to your customers, you can always do it with total conﬁdence.

See the science of better stopping take shape at wagnerbrake.com ©2016 Federal-Mogul Motorparts Corporation. All trademarks shown are owned by Federal-Mogul Corporation, or one or more of its subsidiaries, in one or more countries. All rights reserved.

counter talk | for the counterperson

Why C

onsumer spending on automotive products increased about 4% in 2015 compared with enthusiastic the previous year, and the top eight about keeping premium product categories surged that new car over 15% in dollar growth. Clearly, looking new. consumers are choosing quality We’re now over price. Popular growth categories include starting to see synthetic motor oil, premium beam this very trend wiper blades, performance oil filters, reflected by premium headlights, and premium these spark plugs.“Something different is going on in this space,” says David Portalatin, industry analyst for the in retail sales NPD Group. Portalatin attributes this recent data. We’re starting to growth in higher-value products see appearance in the automotive aftermarket to categories do a rise in the average selling price of automotive parts, as well as a quite well. continued increase in vehicle miles driven, which is largely due to the recent drop in fuel costs. “The average selling price is largely being influenced by the way consumers are defining value in automotive products; they continue to seek out value by choosing a higher-priced item because they believe there is ROI (return on investment) in that,” explains Portalatin. The year 2015 turned out to be a good one for the automotive aftermarket, he says.Vehicle miles driven, a key factor that impacts how soon auto parts wear out and maintenance services are needed, increased 1.8% in 2014 compared with the previous year, and grew to 3.3% by the end of 2015, thanks in part to lower fuel prices. NPD predicts this will level off to 1.9% growth in 2016. “It’s an overall positive environment for selling automotive products, but the rate of growth probably will not be quite as robust as seen in the past several months,” predicts Portalatin. The good news is many consumers who had cut back on their driving during the height of the recession have been reverting

“They’re much more

you should

new car owners

back to their old driving habits.“Now every month that goes by, we continue to set a new record high for total vehicle miles of travel. We’re now at 65 billion miles on an annual basis, higher than we were at the pre-recession high.” Growth Of Premium Parts While consumers are willing to drive around more now that gas prices have dropped, they are still careful with their cash when it comes to general retail purchases. However, in the area of

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

Photo: Necip Yanmaz – iStockphoto

”

BY STEVE PAWLETT

sell

value over price “reasonably priced” is an important attribute in deciding what they buy. Other top attributes that impact their purchase decision are whether the product is made with quality materials, whether it increases vehicle gas mileage, and whether it increases engine performance. “The consumer mindset is looking for ways to create value with those attributes. Jobbers need to think about their product offerings and services and how they can present them to the customer. There is a clear opportunity to create value by offering these differentiated attributes to grow your top line. It’s not always about being the cheapest,” adds Portalatin. “Based on our consumer surveys,” he continues,“when it comes to automotive-related products, for the most part, there’s a lot more weight at the quality end of the spectrum. So this is an opportunity for jobbers to differentiate in the marketplace and grow top-line sales by focusing on what’s better, what lasts longer, what performs better, what extends the life of the vehicle, or has some other attribute around it that gives value to that consumer besides When it just saving money at the register.” comes to There are about 500-plus segments automotivein aftermarket automotive products related that NPD tracks, and the top eight products, differentiated premium segments there’s a lot (premium beam and hybrid wiper more weight blades, full synthetic motor oil, at the quality premium spark plugs, premium/ performance oil filters and air filters, end of the HID capsules and bulbs) added $137 spectrum. million in sales in aggregate from This is an September 2014 through September opportunity 2015, up 15.4% compared with the for jobbers to same period a year ago. differentiate “Would you rather grow 15% in the next year, rather than 4%? Premium marketplace merchandise is a vehicle that can make that happen,” says Portalatin. and grow top“If I compare the price of a line sales. premium wiper blade to the price – DAVID PORTALATIN, INDUSTRY ANALYST, of the cheapest conventional NPD GROUP wiper blade, it’s about double. So the same value-driven consumer

“

automotive products they are willing to spend more. “The automotive products spend is a better value for the consumer today than some other things. They obviously see some ROI in doing that,” says Portalatin. The average selling price for what moves through retail continues to grow, he says, and while this helps boost the top line from a dollar standpoint, in some categories it’s also suppressing the volume side a bit. Based on NPD consumer surveys, 71% of consumers say

JOBBER NEWS / APRIL 2016 |www.autoserviceworld.com

”

counter talk | for the counterperson

who’s looking to cut back on how much she drives is trying to save money by extending the life of her vehicle and is willing to pay double for the beam wiper blade. Now that’s a trend. That’s a mindset. That’s an opportunity for you to leverage your growth.” He noted that the premium categories are priced anywhere from 30% to even four times higher than similar value-priced items. “So consumers are not walking in the door looking for the absolute lowest rock-bottom price all the time. They’re really looking for what’s best, what gives them the longest-term ROI.” However, as consumers shift toward these premium differentiated segments, such as fully synthetic motor oil, they are extending their service/purchase intervals. “The very same thing that is driving the top-line growth is probably suppressing some of the velocity of products moving off the shelf,” explains Portalatin. “As an industry, we’re going to have to be very strategic and get very smart about how we find the right balance between value and volume, because we need both. If you don’t optimize the relationship between those two, then you are leaving money on the table.” New car sales New car sales in the U.S. hit about 17 million units at the end of 2015; however, the aftermarket doesn’t need to worry. “If there’s 17 million new cars sold, there are probably 30-35 million used cars that 36

are changing hands, too. And those are different kinds of cars with different kinds of behaviours that create opportunity in the marketplace,” he says. According to NPD’s consumer survey, the vast majority of consumers in 2016 are going to drive exactly the same car that they’re driving right now. Average vehicle age is moving toward 12 years old. “A 12-year-old car is not an old car; it’s just an average car. And 61% of North American drivers are going to keep driving that car in 2016. It’s actually higher than that because 11% don’t know whether they’re going to buy a new or used car,” he says. Another 16% of survey respondents said they “might” buy a new vehicle. Even though more than 17 million new cars were sold in 2015, there is still tremendous opportunity in the aftermarket around the existing fleet, which is the majority of the market that the consumer values and is willing to keep investing in. In the past when a consumer bought a used car, it was three to four years old. Today, there is tremendous growth in the number of consumers purchasing cars that are already 10 to 15 years old. “Those cars are good cars. They’re lasting a long time. That’s the reality these days: if you take good care of these cars, they’ll last and people are demonstrating that they believe that by their willingness to invest in older cars,” says Portalatin. “The majority of those 11-plus-year-old car owners are saying they’re going to keep

their cars another four to six years, and some even seven or 10 years.” The age of these older cars means many need replacement parts that car owners in the past never needed, because they never kept the vehicle long enough – such as headlight bulbs, lens restoration kits, air conditioning charging kits, etc. “If you differentiated your business around premium value parts for older cars, and in some cases, newer cars, you can grow your business much, much faster than the average industry rate of around 4%,” he advises. Portalatin predicts new car sales will continue to be strong in 2016, but may not be as robust as in 2015. But even an increase in new car purchases can mean an increase in aftermarket auto product sales, he notes, as these car owners tend to buy appearance products. “They’re much more enthusiastic about keeping that new car looking new. If you’re in the appearance end of the business, you’ll know that since the recession hit, a lot of appearance-related categories have struggled as expenditures in those categories were deemed to be discretionary. We’re now starting to see this very trend reflected by these new car owners in retail sales data. We’re starting to see appearance categories do quite well,” he added. Premium is the new value in the automotive aftermarket, as consumers take to heart the old adage “You get what you pay for.” JN

www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

Photo: phototechno – iStockphoto

new car owners

“They’re much more enthusiastic about keeping that new car looking new. We’re now starting to see this very trend reflected by these in retail sales data. We’re starting to see appearance categories do quite well.”

advertiser index | ACI-Agri-Cover Inc. ....................19 www.accesscover.com Akebono Brake Corporation .........25 www.akebononbrakes.com AutoServiceWorld.com ...............32 www.autoserviceworld.com Be Car Care Aware ....................28 www.becarcareaware.ca Bestbuy Distributors Limited ......... 9 www.bestbuydistributors.ca Brake Parts Inc./Raybestos ....... OBC www.relyonraybestos.com Chevron Canada Limited ............13 www.HavolineProDS.com

JOBBER OF THE YEAR AWARD Named after the founders of Jobber News Magazine, E.J. & A.E. Wadham Memorial Award recipients are a who’s who of the best in the Canadian automotive aftermarket, representing aftermarket auto parts wholesalers from across Canada, from businesses large and small, and of all affiliations. Since 1984, the award has recognized those who epitomize the values of the automotive aftermarket through business excellence, community service, and industry contributions.

Continental ContiTech .............. IBC www.contitech.ca Federal-Mogul Motorparts/ Anco Wipers .............................. 7 www.AncoWipers.com

NOMINATE SOMEONE TODAY! YOUR NAME:

Federal-Mogul Motorparts/ Ferodo ......................................27 www.ferodo.com

YOUR COMPANY NAME:

Federal-Mogul Motorparts/ Wagner Brake............................33 www.WagnerBrake.com

PHONE NUMBER: (

FRAM Group (Canada) Inc. ....... IFC www.fram.com Jobber News Jobber of the Year Nomination Form ................37

YOUR COMPANY ADDRESS: )

I NOMINATE WHO OWNS AND IS LOCATED AT THE FOLLOWING ADDRESS:

www.autoserviceworld.com/awards/

Huf Group .................................31 www.intellisens.com

Promax Auto Parts Depot ............. 5 www.autopartsdepot.ca QBA International ............... Outsert www.qbainternational.com Schaeffler Automotive Aftermarket ................................ 8 www.schaeffler-aftermarket.us Tenneco Automotive Monroe Brakes ...........................15 www.monroebrakes.com Tenneco Automotive Monroe Shocks ..........................21 www.monroe.com Wakefield Canada .....................17 www.wakefieldrewards.com

JOBBER NEWS / APRIL 2016 |www.autoserviceworld.com

BUSINESS PHONE: (

)

HE/SHE HAS BEEN IN BUSINESS FOR APPROXIMATELY YEARS AND I NOMINATE THIS PERSON FOR THE FOLLOWING REASONS: (attach a separate sheet if necessary) BUSINESS SUCCESS: INDUSTRY INVOLVEMENT: COMMUNITY SERVICE:

(Your Signature) (Date)

also online at www.autoserviceworld.com 37

publisher’s comment | with andrew ross, publisher » andrew@newcom.ca

THEY DON’T BUILD ’EM LIKE THEY USED TO

Twitter: Andrew Ross (@JobberNews)

www.facebook.com/pages/ AutoServiceWorldcom/ 244916465611841

NEXT MONTH

hey just don’t build cars like they used to. More importantly, though, those who build them don’t see them the way they used to – and neither do those who drive them. Car companies have changed their focus significantly, from making metal machines that move people to machines that get people to where they want to go, entertained and informed. While it is an undeniable truth that every automaker is looking to sell what it is showing (concept cars aside), the conversation has become so focused on things beyond styling and mechanical features that it is easy to forget that these are car companies doing the talking. It used to be that car companies would seek to excite you about what they built by showing you how much fun it was to drive and where you could go. Now it’s all about giving drivers the capability to do a whole bunch of other things on their way to where they are going. It’s all about the “user experience,” in the parlance of the Web world. In a presentation at the Canadian International Auto Show in Toronto, Ford Motor Company of Canada president and CEO Dianne Craig stated unequivocally that Ford is being recast as a “mobility company,” going beyond building cars to providing information and systems to help people get around more efficiently. From dining to travelling to parking, all at your fingertips – dutifully curated by Ford. Listening to the presentation was surreal; it struck me as, in equal parts, a utopian view of the car consumer of tomorrow, and a coldly calculated strategy to convince investors that the company was a new-economy business.

Regardless, it is more clear evidence that the car companies recognize that the automobile as a stylish mode of transport is receding into the background, while its capabilities as a “smartphone on wheels” have moved to the forefront. Horsepower be damned – you’re not going to sell too many cars if the driver can’t get directions to her favourite mall or restaurant, and also provide a playlist for the trip. This reflects a fundamental shift in how people see their vehicles – and how they maintain them (or rather, don’t maintain them). When these systems break – because they always do – most people don’t go to the dealer to get them fixed (87%, according to a recent J.D. Power and Associates U.S. market report), and of those who did, less than a quarter actually ended up with a fully successful repair. The aftermarket is becoming accustomed to the increasing challenges that technology places on the industry, but its members barely consider the impact that this whole new class of technology will have on it. Consider, for a moment, millions of car owners gritting their teeth in frustration every day, just hanging on till they can afford something shiny and new, but who would gladly keep their car longer if “the darn GPS” or whatever “still worked.” Consider, too, that it might be easily repaired, or perhaps doesn’t really even need repair at all, just a skilled reboot. Plainly put, if the aftermarket can effectively keep all those infotainment systems operating properly, you will keep those cars in the hands of their owners longer, and keep that customer longer too. It’s something to think about. JN

Biz Tech For Jobbers: Keeping your staff and business current | Cooling System Parts Trend Report | Jobber Q & A: A frontline perspective on the aftermarket | Counter Talk: How jobbers are using social media to expand their customer base www.autoserviceworld.com | JOBBER NEWS / APRIL 2016

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