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Jobber News AIA YES CONFERENCE SPEAKERS OFFER SAGE ADVICE • WAGNER OEX BRAKE PADS LAUNCHING ACROSS NORTH AMERICA

MAGAZINE

MAY 2016

Serving the Automotive Aftermarket Since 1931

THE AUTOMOTIVE MARKET FACES UNPRECEDENTED DISRUPTION

BIZ Q&A PARTS PROLIFERATION PLACES CHALLENGES ON JOBBERS

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Jobber News

contents | may 2016 » vol. 84 no. 5

Serving the Automotive Aftermarket Since 1931

regular features

6 OVER THE COUNTER

22 COVER STORY

BIZ tech 16

The automotive market faces unprecedented disruption The countdown for disruption in the automotive business has begun. Connectivity and digitalization is about to impact the way OEMs and the entire aftermarket conduct business in a very big way.

AIA YES Conference speakers offer sage advice; Amazon builds global distribution business; Win a $100 prepaid card daily through Monroe “100 Years, 100 Days, 100 Dollars” promotion; Cardone awards Ultra Car Giveaway grand prize; Total awards Nissan Micras to three lucky winners; Wagner OEX brake pads launching across North America.

20 MARKET TRACKER

in this issue

Double-digit growth for TPMS aftermarket The TPMS aftermarket is expected to more than double in the next five to seven years, growing at a CAGR of 13.8% during 2016 – 2022.

Q&A

Parts proliferation places challenges on jobbers

MONEY & MANAGEMENT

The lower Canadian dollar means the price to source parts has increased and that increased cost gets passed onto the installers. At the same time, jobbers are finding competition from the Internet has put added pressure on them to stay price-competitive.

28 Market Feature

Cooling Systems Selling preventative maintenance to build sales

Vehicle cooling system technologies have improved dramatically over the last decade. The technology in everything from belts and hoses to water pumps and tensioners has advanced to the extent that these components now last longer than ever before.

How preparing a business for sale is like rehearsing for a theatre performance When entering the centre-stage spotlight, both the business owner and a star performer must know their roles, the script, the story, as well as other major players and the roles they will play.

35 35

departments

UpFront Building your brand on social media

37 Marketplace Advertisers

COUNTER TALK

The A-B-Cs of social media As a medium for connecting and interacting with customers and other stakeholders, and building your reputation as the go-to expert in your field, social media is the ideal vehicle. How do you get started?

Index

38 Publisher’s Comment

Twitter: Andrew Ross (@JobberNews) |

JOBBER NEWS / MAY 2016 |www.autoserviceworld.com

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upfront |

with steve pawlett, editor » spawlett@jobbernews.com

Jobber News

FOUNDED 1931

BUILDING YOUR BRAND ON SOCIAL MEDIA

ore and more jobbers are recognizing the benefits of turning to social media to promote their services to consumers. And it appears to be paying off with increased sales. While you may not find customers in immediate need of auto parts, participation on social media allows you to build your brand and position your business as a high-quality auto parts specialist. (See our Social Media Report on page 35). This branding pays off when your online listing Several comes up for someone in immediate need of auto parts. studies on the They’ll know who you are and will be more likely to use of social make a purchase from you. media have Several studies on the use of social media have identified identified Facebook as the most popular social media site for small business. Every second there are 20,000 as the most people on Facebook. That number alone makes it a popular social media site for valuable tool for jobbers. According to Shareaholic’s social media tracking small business. results, Facebook is the clear leader in social referral Every second there are traffic, driving almost 25% of all referral traffic. The social network’s total share of visits to Shareaholic’s network was 24.64% in December 2014, far above on Pinterest, which came in second place at 5.06%. In fact, Facebook. according to Shareaholic’s data, Facebook drives more referral traffic than Pinterest, Twitter, StumbleUpon, Reddit, Google+, LinkedIn, and YouTube combined. Video has also become a popular online marketing tool. Recent research shows consumers are watching and uploading videos to Facebook more than ever before. According to Mark Zuckerberg, the social network’s users view more than four billion videos a day – that’s up from just one billion in September 2014. If you want to get noticed and stand out from your competitors, find a staff member with a great on-air personality and sharpen up your video presentation skills. According to a 2013 study from Syncapse, the most popular reason why people Like a Facebook page is to support a brand. This is notable because it means that some people are willing to align themselves with businesses and endorse their products without any kind of financial incentive. These are the people you want to identify when looking for brand ambassadors. It’s also wise to keep postings to a minimum and ensure they are quality postings, not just random fillers. It might sound counterintuitive, but posting less frequently can actually help your engagement. It’s quality, not quantity, that helps you get ahead on Facebook. Research shows that brands that post just once or twice a day get 73% more comments and 32% more Likes than those who post three or more times. When it comes to crafting content for your Facebook page, you need to know why people are there in the first place. If you can understand what it is they’re hoping to get out of a Like, then you can deliver the most relevant and appealing content and strengthen your relationship with those individuals, and thus, build your brand. JN

Facebook

20,000 people

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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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over the counter |

AIA YES CONFERENCE SPEAKERS OFFER SAGE ADVICE MEVOTECH RECOGNIZED AS TOP VENDOR BY VAST AUTOMOTIVE Vast Automotive has named Mevotech 2015 Supplier of the Year. The award, which recognizes overall sales increase, fill rates, marketing, and sales support, was presented to Mevotech at Vast’s annual convention in Gatineau, Quebec. “Vast Automotive is one of Canada’s premier distributors, and it’s a true honour to have been recognized by Vast and their management, as well as a tribute to the entire Mevotech team,” says Ezer Mevorach, CEO of Mevotech.

For

more over the counter

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www.autoserviceworld.com/jobbernews

Mevotech previously received Vast Automotive’s Supplier of the Year award for 2012.

“If you want to play better golf, you need to golf with better players,” advised Dave Fifield, president of Wakefield Canada. Fifield was speaking to a roomful of young aftermarket attendees at the AIA’s Young Executive Society conference last month. The AIA Canada Young Executive Society (YES) Conference, which was held at the Holiday Inn Express & Suites in Vaughan, Ontario, is designed to provide tomorrow’s automotive aftermarket industry leaders with insight into some of the trends shaping the world today. In addition to his sports metaphor, Dave Fifield offered the aftermarket audience sage advice on what he had learned from his 30-year career with Castrol. Fifield joined Castrol Canada upon graduation from Ryerson University with a bachelor’s in chemical engineering. He has held senior positions in sales, marketing, business development, and technology. Fifield spent several years working in the U.S. for Castrol North America, with responsibility for sales in the U.S., Canada, and Mexico. Following BP’s acquisition of Castrol in 2000, Dave took responsibility for the Castrol and BP lubricants’ brand marketing across the American region. In 2004, Fifield relocated to the U.K. as vice-president, marketing strategic accounts, responsible for developing global strategic partnerships with Fortune 500 companies. In 2008 he joined Wakefield as chief operating officer, responsible for all aspects of Wakefield’s business operations. Dave was promoted to president of Wakefield in 2013. Fifield is past chairman of the AIA Market Research Committee, and currently sits on the AIA Board of Directors as second vice-chair. “Early on in my career, I realized the importance of developing something for myself. It was the concept of a personal brand. I realized that I did not want to be the guy with the pocket protector in the lab coat. I wanted to be the guy who understood the market, launched new products and new tools for the sales team, and helped drive the business world,” explained Fifield. “What I learned at that time was the importance of delivering results. When you are a young guy working at your goal in your job or career, it’s important to deliver those results, because delivering results is what builds your personal brand.” Fifield shared several key messages from his career. “Know what motivates you and do your best. You have to understand, ultimately, what your passion is: what gets you out of bed in the morning. If you can’t get to that place, you need to find something else.” Another quality Fifield addressed in his

Above: Outgoing YES chairman Dave Illes (left) and incoming YES chairman Derek Chinn. Left: Dave Fiﬁeld, president of Wakeﬁeld Canada, discussed the importance of developing a personal brand and understanding the value of patience when moving up the corporate ladder.

presentation was the importance of patience. He advised the young people in the room to not rush their careers. “When I was younger, I was in a hurry to get to the next level, and I can tell you that had I gone faster, I might not be where I am today. The most common conversation I have with young people today in my organization is, they are always wondering what the next step looks like for them, and they are always wondering when that opportunity will become available. “What I tell them is, don’t be in a hurry. Two things need to happen. One, you have to be ready for that next move, and two, the organization needs to be ready for you to move to that next level. Don’t underestimate the power of both those things. Timing has to be there as well, so be patient. And the last piece of advice is, don’t be afraid to take a chance,” advised Fifield. “Your generation is shaping our future and you are the future leaders in our industry; make the most of this time.” The second guest speaker, Ron Tite, an awardwinning marketing expert and CEO of the Tite Group, a Toronto-based content marketing agency, talked about thriving in the “Expression Economy.” Tite discussed the importance of creating, building, and maintaining your own personal brand. “The Internet has turned the concept of marketing on its head. We are in a battle for time,” he said. “Consumers are kicking our butts. People today are voting with their time, not their wallets. If you don’t get the time, you don’t get the wallet.” Tite spoke to creating a core set of values and living by them. “Be a rebel with a cause,” he said. “It’s imperative in business to ensure both your personal and organizational values are aligned; if they aren’t, you will lose brand value. In the ‘Expression Economy,’ it’s that true personality that counts. Honesty and transparency equals trust.” www.autoserviceworld.com | JOBBER NEWS / MAY 2016

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over the counter | TOTAL CANADA BECOMES PARTNER WITH ASSOCIATION DU CAMIONNAGE DU QUEBEC Total Canada has signed a two-year partnership agreement that makes Total Canada the Association du Camionnage du Québec’s newest Prestige partner and member. This agreement is in harmony with one of Total’s most important values: security. Indeed, Total actively works towards achieving a more secure working environment. The Association du Camionnage du Québec and Total are in line with each other concerning this topic, since one of the Association’s missions is to promote ethics, efficiency, and security norms within the trucking and transport industry. Total Canada and the Association du Camionnage du Québec will work together to serve transport companies’ needs with a full line of lubricants dedicated to the needs of the heavyduty sector and by taking into consideration the needs and challenges of transport industry workers.

CARDONE AWARDS ULTRA CAR GIVEAWAY GRAND PRIZE In February, Michael Chin of Northborough, Massachusetts, was awarded a brand-new 2016 Ford Mustang GT, as the Grand Prize Winner of the Cardone Ultra Car Giveaway Sweepstakes. Cardone Industries launched the sweepstakes in April of 2015 to promote its new brand of premium remanufactured brake calipers. Effective through November 30, 2015, service dealers and DIYers were invited to enter for a chance to win the Grand Prize, and one of seven monthly drawings for a $250 Visa Gift Card. The seven gift card winners were: Bob Bischel – Zimbrick Honda Service Center – Madison, Wis. David Hess – Park Street Garage – Madison, Wis. Cindy Sirois – Charlie’s Toyota – Augusta, Me.

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While all the winners were excited to receive their prizes, no one was more pleased than Michael Chin, a DIYer who had installed Cardone Ultra Premium Calipers on his personal vehicle. After Christin Cardone McClave presented him with his new Mustang and handed over the keys, Mr. Chin stated that the 10-year warranty cinched his decision to try the product. “When I saw the ad for the sweepstakes, I figured, what the heck? I’ll give it a shot.”

To see live footage of the Grand Prize event, visit cardoneultra.com.

DOMINION SURE SEAL EXCLUSIVE DISTRIBUTOR OF JTAPE Dominion Sure Seal Ltd. of Mississauga, Ontario has announced that it is now the exclusive Canadian distributor of U.K.-based JTAPE automotive aftermarket products. Dominion Sure Seal Ltd., manufacturer of automotive sealants, adhesives, and coatings, believes that JTAPE’s innovative masking solutions are a perfect complement to the firm’s existing range of collision repair products, and that with its unique time-saving characteristics, JTAPE will find high demand in Canada. “Our extensive Canadian distribution, dealer, and jobber network in Canada puts us in a great position to provide the necessary sales and service to ensure the success of JTAPE products in Canada. We are excited to bring these highly unique, time-saving masking solutions to the Canadian marketplace and to follow up on JTAPE’s success at SEMA 2015,” says Larry Cook, vice-president of sales at Dominion Sure Seal.

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TOTAL AWARDS NISSAN MICRAS TO THREE LUCKY WINNERS

In partnership with Nissan Canada and the Ultramar gas station network, Total Canada Inc. was proud to award three Nissan Micras to 1 Carmen Vienna (Maritimes), 2 Dany Gauthier (Quebec), and 3 Patrick Beliveau

(Ontario). The “Win a Total Special Edition Nissan Micra” contest took place from October 14 to November 30, 2015 across the Ultramar gas station network. The three lucky winners won one 2015 Nissan Micra wrapped in the colours of Total (one draw per region: Quebec, Ontario, and Maritimes). Over 16,600 people participated in this contest in fall 2015. Total Canada currently markets Total lubricants across Canada. Total products are sold in over 150 countries worldwide and have been available in Canada since 2008 (for light, heavy, and industrial vehicles). Total Canada manufactures more than 80% of its products in Canada in its Montreal plant. Last January, Total Canada announced that it will be an official partner of the Nissan Micra Cup series. Total will be the exclusive provider of oils and lubricants for the teams.

WAGNER OEX BRAKE PADS LAUNCHING ACROSS NORTH AMERICA Wagner OEX brake pads, which can stop pickups, sport utility vehicles (SUVs), and crossovers (CUVs) up to 50 feet sooner, will be introduced to millions of consumers through a broadreaching television, digital, radio, and print advertising and social media campaign beginning this spring and continuing through 2016. Featuring three highly experienced automotive service professionals and internationally acclaimed media personality Mike Rowe, the campaign will support the North American launch of the Wagner OEX product line, which utilizes leading-edge stopping technologies that outperformed other leading pads in a series of independent tests performed on popular pickups, SUVs, and CUVs. The Wagner OEX launch will be supported by a wide ranging consumer- and trade-based media program, including television and radio ads appearing nationwide; full-page and twopage print ads and four-page inserts placed in trade publications and leading consumer publications; online banners and pre-roll video; outdoor advertising; and ongoing communication via key social channels.

JOBBER NEWS / MAY 2016 |www.autoserviceworld.com

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PHOTO BY: eTuesdays

Spring barbecue, not car-be-cue. FelPro-Only.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.

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over the counter | RAYBESTOS CELEBRATES ’69 MUSTANG RESTORATION WITH COUNTERPERSON PROMOTION

STRATFORD TO STAR IN SELF-DRIVING CAR TECHNOLOGY

Photo: Arpad Benedek – iStock.com

The City of Stratford is looking to take centre stage as a testing

ground for self-driving and connected vehicles. The city’s hydro utility and the Automobile Parts Manufacturer’s Association of Canada hope to start playing this key role in developing the latest automotive technology by early fall. Festival Hydro’s extensive Wi-Fi network, which includes free zones throughout the downtown, the large number of auto and electronics manufacturers in the area, and the city’s proximity to the University of Waterloo, make Stratford a leading choice. “Many people have asked me: ‘Why Stratford?’” says Flavio Volpe, president of the Automobile Parts Manufacturer’s Association. “The key answer is leadership – you have a mayor and municipal council who decided years ago they were going to invest in city-wide Wi-Fi.” The city-wide Internet coverage means all connected vehicles tested in Stratford would be operating on one Wi-Fi network. That is essential for controlling the tests and comparing the data. Connected vehicles have wireless links to the Internet for everything from maps and navigation devices, cameras to monitor the movements of nearby vehicles, sensors to detect black ice, and video streaming on mobile devices for passengers. Autonomous vehicles are packed with cameras, sensors, artificial intelligence, and other sophisticated software so they can drive themselves. A testing hub in Stratford using several vehicles will allow more companies and more technology into the program. And prospective customers would come to Stratford to see the latest technology in action, so the parts association no longer would have to take its demonstration vehicle across the continent on sales calls. The testing hub would produce huge amounts of data that could be mined by software developers writing programs for driverless vehicles. There is potential for significant economic spinoffs, according to Volpe. “If we create this anchor demonstration hub and we have people coming to Stratford to take a look at it, they are going to buy from Ontario companies, and perhaps put their feet down in Stratford and the outlying area,” he says.

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The Raybestos Muscle Shirt and Cap Giveaway will award a commemorative 1969 Raybestos Mustang T-shirt and vintage Raybestos cap to counterpeople for every 20 sets of Element3 brake pads sold now through May 15, 2016. “The Raybestos Muscle Shirt and Cap Giveaway promotion pairs one of the greatest muscle cars in American history with the brand known as the best in brakes for over 100 years – it’s a celebration of two classic icons,” says Kristin Grons, marketing manager for Brake Parts Inc. “Not only is this new promotion a fun way to thank the parts professionals that support the Raybestos brand every day, but it also adds to the excitement for our latest restoration project – the Raybestos 1969 Ford Mustang Fastback.” The commemorative T-shirt showcases the restored ’69 Raybestos Mustang. Painted in classic colours and striping that are true to the time, this one-of-a-kind muscle car features a new Ford Coyote engine, the famous Schwartz Performance “G-Machine” bolt-in chassis, and an off-the-shelf performance disc brake upgrade package of Raybestos components and Element3 brake pads with Enhanced Hybrid Technology (EHT). Enthusiasts can follow the restoration on Facebook and Twitter and by visiting www.RaybestosBuild.com.

MACS 2016 TRAINING EVENT AND TRADE SHOW A SUCCESS The Mobile Air Conditioning Society (MACS) Worldwide once again held a successful annual training event and trade show, held this past February 11-13, at the Caribe Royale Hotel and Convention Center in Orlando, Fla. “We were happy to host over 1000 attendees from 21 countries, 28 technical speakers, eight networking events, and 90 different exhibition booths with the support of 39 loyal sponsors,” says Elvis L. Hoffpauir, MACS president and chief operating officer. “After two consecutive years with an East Coast-based venue, we look forward to our 2017 Training Event to be held February 15-18, at the Anaheim Marriott in Anaheim, Cal.” The theme of MACS 2017 Training Event and Trade Show is Mobile A/C: Global Service Horizons. Interested exhibitors can contact MACS Events manager Pam Smith at pam@macsw.org to reserve a booth.

Dorman Products has announced the completion of new system enhancements that enable shipping Canadian special orders overnight. With these newly completed enhancements, Dorman’s customers have the ability to receive Dorman shipments faster. The majority of customers will benefit from this change, with few exceptions for regions that do not currently support overnight shipping. The Dorman website provides customers all applicable shipping options at the time of order. This overnight functionality is available for both manual and web orders. Normal expedited freight charges, cutoff times, and special order guidelines still apply. Additional information on all of Dorman’s products is available on www.DormanProducts.com.

www.autoserviceworld.com | JOBBER NEWS / MAY 2016

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over the counter | TENNECO LAUNCHES FREE “SERVICEGRAM” Tenneco has announced the launch of its new Monroe Shocks and Struts

Servicegram and Walker Emissions Control Servicegram. These free monthly technical fliers will provide automotive service professionals and counter professionals valuable insight into two of the industry’s premier brands. Also available in French and Spanish, the new Servicegrams deliver timely technical product insight, common service bay procedures, and troubleshooting techniques and tips. The current Monroe Servicegrams include topics such as “What Does No or Slow Rod Extension Mean for My Replacement Shock/Strut” and “The Use of Specialized OE Spring Technology on Strut Assembly Repairs.” For Walker, the latest Servicegram topics include “Make Exhaust Less Stressful” and “Lost Productivity Due to Converter ‘Break In.’” “We are excited to bring this technical information to our customers and trade partners,” says Denise Hanefeld, brand manager, Tenneco. “These new Servicegrams will provide easily understandable tips and procedures in a format that is convenient and quick for the technician or counter professional who is on the move.” Published monthly and available electronically, Monroe and Walker Servicegrams will provide hands-on learning through step-by-step how-to articles, relevant technical tips, and more. To sign up to receive either flier, please contact your Monroe or Walker sales representative. To learn more about Monroe ride control products or Walker emissions control products, please contact your Monroe, Walker, or Tenneco representative, and visit www.Monroe.com or www.WalkerExhaust.com.

TRW AFTERMARKET LAUNCHES COIL SPRING PROGRAM IN NORTH AMERICA TRW’s North American (NA) Aftermarket Group has announced the launch of a coil spring program. This news supports the businesses’ position as a leading global aftermarket supplier and highlights its commitment to its customers across North America. With an initial offering of 303 SKUs, the program covers 90% of the NA coil spring aftermarket, and includes parts for Chevy Avalanche, Chrysler 300, Dodge Ram, Ford E/ F150, Ford Focus, Honda Accord, Jeep Liberty, and Nissan Pathfinder, amongst others. The TRW Aftermarket brand has been active across North America for three years. There are now more than 3400 chassis parts, 300 coil springs and 1000 brake pad and complementary references available.

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www.autoserviceworld.com | JOBBER NEWS / MAY 2016

2016-04-13 9:51 PM

GM BUYS SELF-DRIVING TECHNOLOGY DEVELOPER CRUISE AUTOMATION General Motors Co. is again tapping the Silicon Valley talent well to flush out its autonomous vehicle development team. The company has announced it will buy San Francisco-based Cruise Automation – adding the start-up’s software talent as the traditional auto firm embraces the industry’s big shift toward technology. “Fully autonomous vehicles can bring our customers enormous benefits in terms of greater convenience, lower cost, and improved safety for their daily mobility needs,” GM president Dan Ammann says. Despite the purchase, Cruise will maintain a level of autonomy itself, operating as an independent unit within GM’s recently formed Autonomous Vehicle Development division. GM did not

release the deal’s financial details, but said the acquisition is expected to close in the second quarter of this year. “GM’s commitment to autonomous vehicles is inspiring, deliberate, and completely in line with our vision to make transportation safer and more accessible,” Kyle Vogt, founder of three-year-old Cruise Automation, says. “We are excited to be partnering with GM and believe this is a groundbreaking and necessary step toward rapidly commercializing autonomous vehicle technology.” The automaker’s latest deal builds on its recent purchase of ride-sharing firm Lyft. JN

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jobber

TOUGH ECONOMY

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he current state of the economy has been particularly tough on Canadian jobbers. A lower Canadian dollar means the price to source parts has increased, and that increased cost gets passed onto the installers. Then those price increases are passed onto consumers. At the same time, jobbers are finding competition from the Internet has put added pressure on them to stay price-competitive, as a service operation can go online and price-compare among jobbers and then order the parts directly online. Then there are regional differences in how the economic

Photo: erhui1979 â€“ iStock.com

PARTS PROLIFERATION PLACES CHALLENGES ON JOBBERS

www.autoserviceworld.com | JOBBER NEWS / MAY 2016

2016-04-13 9:53 PM

BY TOM VENETIS

There is now a shortage of technicians, and this has affected “the number of installers to service the aftermarket base, with many smaller shops closing and few new shops opening.” – IAN CREASER, OWNER, LUNENBURG AUTO & SPORTING SUPPLY LTD.

slowdown has played out across Canada. Where only a few years ago, the Maritimes and Western Canada were experiencing strong economic growth, driven largely by oil revenues and high prices paid for resource commodities, these same areas are now going through a sharp economic slowdown. With rising unemployment and sluggish or even stagnant economic growth, vehicle owners are holding onto their dollars. This in turn means installers are seeing business slow down, and so they are ordering fewer parts from jobbers. So how are jobbers staying competitive and profitable? Brett Cozens, operations manager with Saskatoon-based Sutherland Automotive, says that with the economy slowing, there is now a greater emphasis on improving customer service. One can only compete on price so much. “We try to keep our customers happy by trying to be fair with our pricing,” Cozens says. “Because the economy has slowed down, people are shopping about more to see about getting the best price. So you have to be on your A-game daily. We find that if we are fair with our prices and our customers, we will be fine.” One area on which Cozens and his counter staff have put a new emphasis is helping service operations with parts returns. Cozens says it remains common for shops to let returns pile up, then try to do all of them at once when things slow down. This is time-consuming and unproductive for the shop and the jobber. And it negatively impacts revenue and profits, for both partners. So Cozen’s counter staff now try to help shops manage those returns better, by streamlining the process

and reducing the costs involved. “To help them manage this, we try to keep on top of it for them,” Cozens adds. “Our goal is to see about streamlining the process, so that returns don’t pile up and then they try to deal with everything all at once when times are slow.” Ian Creaser, owner of Lunenburg, Nova Scotia-based Lunenburg Auto & Sporting Supply Ltd., says one result of the slowing economy in Nova Scotia is the decline in the number of service operations in the area, and a diminishing number of technicians to work on vehicles. “There is now a shortage of technicians, and this has affected the number of installers to service the aftermarket base, with many smaller shops closing and few new shops opening. Pricing is also a big issue facing not only our business, but all types of businesses today, due to the Internet and the mobility of today’s consumers. You can always find a lower price on whatever you might want to purchase.” So how have he and his team managed to increase their business? Creaser says that it comes by “offering value through better quality parts and showing our customers the importance of using products that give their customers better value.” “We train our staff to have good product knowledge and the mechanical aptitude to sell the benefits to customers,” Creaser continues. “Understanding the products you sell makes it easier to communicate to the customer why they should invest in quality parts. We make an effort to have all of our staff deliver parts, work the counter, provide customer service, and receive orders, so that they can deal effectively with any customer need. It is very good for

JOBBER NEWS / MAY 2016 |www.autoserviceworld.com

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our counterpeople to get out into our customers’ shops and make personal contacts.” All of the jobbers we spoke to emphasized how important it was for counter staff to receive training on the newest vehicle technologies, and to stay on top of changes in parts categories. All say the jobber is often the first person a technician turns to for information on parts. Brett Cozens says that he regularly has parts suppliers come in to offer training to his staff, but because he has two other locations, he insists that the parts suppliers go and visit those as well, so staff there receive the same level of training as the main operation in Saskatoon. “So whenever I have a supplier coming to give a presentation, my rule is a simple one: if you want to come and give a presentation, you must give that presentation to every store and staff member.” Ken Ellingson, manager of Swan Valley Auto Ltd. in Swan Valley, Manitoba, says that constant training on new vehicle technologies is a must for counter staff in order to stay competitive. Bill Fogarty, owner of B&T Auto Parts Ltd. in Sydney, Nova Scotia, says while the Internet has put pressure on many jobbers to remain price-competitive, an advantage not often mentioned is that the Internet and online ordering have helped reduce the number of returns. Fogarty says that his operation’s use of the PROLink system from NAPA has reduced the number of errors technicians make when ordering parts, and thereby reduced the number of returns. “Asking mechanics questions can sometimes be like pulling teeth, and we continued on page 18

2016-04-13 9:55 PM

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sometimes get the wrong information from them, or incomplete information,” he continues. “So they get the wrong parts. But now they have to input the information in themselves and answer questions about the vehicle, so mistakes are reduced.” One solution that all the jobbers we spoke to have embraced is the use of computer-based inventory control and systems to analyze sales trends and customer data. All admit that inventory control is a growing concern with an ever-increasing number of SKUs, both of individual parts and within parts categories. Not knowing what to carry or carrying too much of a part that is not moving can have a direct effect on profits. Swan Valley Auto’s Ellingson says that his operation has moved to a new pointof-sale system that not only allows the firm’s customers to quickly search their catalogue and see what is available, but also gives his team a better handle on sales and where they may be dropping the ball. Sutherland Automotive’s Cozens says that his operations use a couple of different systems to keep track of inventories and to know their customers better. “We have one program that helps with vehicle counts in our area, and helps us

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forecast what we should have,” Cozens says. “We also pull regular reports from our counter staff to see what sales have been lost and what sales were lost online, and we will send that information to our factory representatives to tell them what we have, what we have sold, and to see if they see something in that data that is trending and to make sure we have those products.” “Managing inventories and having parts on hand for customers is a constant challenge, due to the number of SKUs needed to support a line,” says Lunenburg Auto & Sporting Supply’s Creaser. “We use our computer systems to manage our parts inventory and sales information from our supplier to ensure we have a breadth of coverage. Daily replenishment to support that breadth of products, along with daily availability of non-stocked parts from distributors, provide us with a competitive nook in our tight market.” B&T Auto Parts’ Fogarty says the PROLink system allows him to track inventory and sales, and he also works closely with NAPA to see what service operations need. “NAPA is pretty good at coming to our area and helping us understand what the vehicle market is like and what parts are needed, and that helps us make sure our inventory is up to date.” JN

www.autoserviceworld.com | JOBBER NEWS / MAY 2016

2016-04-13 9:55 PM

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market trend report | TPMS Growth

DOUBLE DIGIT GROWTH FOR TPMS AFTERMARKET

he TPMS aftermarket is expected to more than double in the next five to seven years, growing at a CAGR of 13.8% from 2016 – 2022. With tire pressure monitoring system (TPMS) legislation now in effect in North America as well as Europe, demand for replacement sensors in the automotive aftermarket is expected to grow significantly across both markets from 2016 – 2022. The latest Frost & Sullivan report forecasts tire pressure sensors to be the fastest-growing product in the automotive aftermarket, growing from an estimated $225.7 million in 2016 to $489.2 million by 2022. With benefits such as tire safety and lower fuel consumption, TPMS has been mandated in light vehicles since 2007 in North America, and since 2014 in Europe. In North America, the TPMS aftermarket boom is driven by the expiration of the sensor battery. High-volume replacement demand for tire pressure sensors begins seven to eight years after the mandatory installation of the sensors, putting the first generation of vehicles fitted with TPMS under the Transportation Recall Enhancement, Accountability, and 20

20_May_TPMS.indd 20

Documentation (TREAD) Act now in the prime replacement age. The European Union did not make TPMS compulsory for light vehicles until 2014. Therefore, the battery expiration is not likely to be the main driver for new sensors for at least five to seven years. Instead, high usage and mandates for winter tires are expected to cause millions of motorists to purchase an extra set of tires equipped with the sensors. However, the average life of TPMS batteries has increased from five to seven years to seven to nine years, due to advances in research and development and quality. Despite the high-growth expectations, the increasing service life of the batteries could prove a restraint to the aftermarket. Indirect TPMS Medium- to long-term growth also depends on whether more OEMs switch to indirect TPMS technology (which does not use tire pressure sensors) to meet regulatory requirements, in place of the direct TPMS systems that capture most market share today. Even though OEMs have preferred direct TPMS sensors due

to the performance standards set by the TREAD Act in North America, the development of indirect technology can be a threat in the near future. More OEMs in both regions are considering improved indirect TPMS, which uses wheel-speed sensors that communicate with the antilock braking system (ABS) module, in place of direct systems, to take advantage of cost savings. Meanwhile, technological advances in the independent aftermarket are making it affordable for independent garages to stock otherwise expensive TPMS sensors. Most TPMS sensors sold today are directfit, application-specific parts designed and programmed for each vehicle make and model. The complexity of servicing TPMS is a barrier to entry for many distributors and installers and threatens the growth potential of the aftermarket. However, the development of universal-fit sensors, which can be installed on any vehicle and programmed to send and receive data with proprietary control modules and software platforms used by different automakers, is making it easier for the independent aftermarket to participate in the growth of TPMS. It reduces inventory costs for distributors and simplifies installation for service professionals. As the aftermarket is expected to triple in size over the next five to seven years, competition for a share of the pie is expected to heat up. Recently, the Netherlands-based sensors and controls manufacturer Sensata Technologies acquired Schrader International, estimated to have an overall market share of 55% in the two regions. The aftermarket today includes just five major direct TPMS producers that supply mainly to dealerships in the original equipment supplier (OES) channel. The next big opportunity for TPMS manufacturers will likely come from commercial vehicle fleet owners and operators. In the meantime, the aftermarket must educate the driving public about the benefits gained from the regular maintenance of TPMS sensors to maximize the growth potential of this product line. JN

Photo: Visual Field – iStockphoto

BY STEVE PAWLETT

www.autoserviceworld.com | JOBBER NEWS / MAY 2016

2016-04-13 9:57 PM

43 years of making a GLŦHUHQFH Your continued support (more than $4.5 million in donations) has had a profound impact on Muscular Dystrophy Canada. In honour of our efforts, and yours, Muscular Dystrophy Canada has created the Annual Fred Shaddick Community Service Award recognizing outstanding contribution to the community.

Since 1954, Muscular Dystrophy Canada has been committed to improving the quality of life, mainly through donations, for the tens of thousands of Canadians with neuromuscular disorders and taking the lead in research for the discovery of therapies and cures. Shad’s R&R has continually supported these efforts since 1973 by donating over $4.5 million dollars to Muscular Dystrophy Canada. Now entering our 43nd year of support, the automotive aftermarket continues to fulfill founder Fred Shaddick’s original mission of FOR THE KIDS.

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2016-04-13 9:38 PM

cover feature |

BIZ

THE AUTOMOTIVE MARKET FACES UNPRECEDENTED DISRUPTION

he countdown for disruption in the automotive industry has begun. Connectivity and digitalization are about to impact the way OEMs and the entire aftermarket conduct business in a very big way. Recent advances in big data telematics are leading the automotive industry into a major business model disruption, according to the latest executive survey by KPMG. This year’s KPMG Global Executive Survey indicates that the automotive business faces an unprecedented disruption over the next five years. From product development cycles, sales and after-sales processes to the customer relationship, the overall business model will have to transform significantly in order to keep up with the pace of digital innovation. Now in its 17th consecutive year, KPMG’s 2016 Global Automotive Executive Survey features the views of 800 auto executives from 38 countries, including topics such as business model disruption, connectivity and digitalization, customer data, new products, and who will be the frontrunners in the

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auto industry. To give further insights and reality checks to the industry, for the first time KPMG also surveyed over 2,100 customers from around the world. According to survey findings, executives’ mindsets have shifted significantly since the previous survey. Some 82% of auto executives surveyed estimated a major business model disruption in the next five years to be extremely likely or somewhat likely. Connectivity will pave the way for new service and data-driven business models around mobility, and will, beyond that, enable third-party players from converging industries to intervene in the customer relationship at the point of sale, as well as during the whole life cycle of the car. The regional results of this survey indicate a distinct difference of opinion among automotive executives in different territories. Those in the emerging markets of China, India /ASEAN (Association of South East Asian Nations), and South America expect a business model disruption to be more likely. Meanwhile, executives from

www.autoserviceworld.com | JOBBER NEWS / MAY 2016

2016-04-13 10:03 PM

BY STEVE PAWLETT

Photo: Alex Belomlinsky, graphicnoi – iStockphoto

“This year’s

the Triad of Japan, Western Europe, and North America are much more conservative, most often answering that a business model disruption is rather unlikely. Just as in the ranking of key trends, it is executives from the OEMs who have a conservative view, and who were most likely to respond that major business model disruption is not likely at all or somewhat unlikely. KPMG says that OEMs still appear to be underestimating the impending changes predicted in the business model caused by the key trend connectivity. OEMs clearly want to keep their traditional role as key players in the value chain, and might not want to move out of the product and technology-led comfort zone they have been in for the past century. These different opinions from different value chain players show the tension currently in the automotive value chain. Nevertheless, there are huge differences among OEMs. Some are already on the right track regarding how to cope with future challenges through innovation.

BMW And Toyota Leaders In Innovation According to the surveyed executives, BMW and Toyota will be the leaders in the fields of e-mobility and autonomous driving, and are also expected to generally be the groundbreaking innovators in the next five years. Although BMW and Toyota are expected to be the most innovative players until 2025, other OEMs like Honda, Ford, and Tesla are following in their wake. Interestingly, these two traditional players are even seen as leading in electromobility ahead of Tesla Motors. The results are not without merit, as BMW has established a strong e-mobility subbrand with its i8 and i3 models. Toyota is currently building up a new future-oriented and innovative image with the fuel cell model Mirai. Consequently, the survey respondents fundamentally link both players to the development of future technologies. On the other side, Daimler, former second leader of self-driving cars, has lost ground in autonomous driving in the eyes of the executives and is no longer positioned among the frontrunners.

survey shows that auto executives have fully embraced connectivity and digitalization, and ranked it as the overarching key trend disrupting the auto industry until 2025.”

continued on page 24

JOBBER NEWS / MAY 2016 |www.autoserviceworld.com

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2016-04-13 10:03 PM

cover feature | Biz Tech

“According to the surveyed executives, BMW and Toyota will

However, the executives credit Daimler’s efforts in innovation, placing them at number six; mature Asian respondents from Japan and South Korea even see them at number three. Being innovative is not only a necessity to improve the image of a brand and its reputation. Recent developments around the “Dieselgate” scandal, regarding VW’s unreliable emission test results from autumn 2015, show that a clear strategy, especially regarding electromobility, will clearly influence a company’s future position among its competitors. The Pending Battle For The Customer OEMs and ICT (information and communication technologies) companies will increasingly fight for the valuable customer interface. Survey results show executives are not as sure as they were in the past that the OEM will still dominate the customer relationship. According to one-fifth of all respondents, tech companies, especially from Silicon Valley, could gradually take over the customer interface in the connected car. Most respondents to the KPMG survey believe the driver owns the data generated in or by a car. While a few executives still think that data is at their company’s disposal, customers think differently. They will choose the party they trust the most and that offers the best benefits in return, instead of just giving their valuable data away for free. Connectivity is a key trend, so it’s not surprising that 22% of executives now see the relationship prospectively in the hands of ICT companies, compared to only 4% in 2015. That leaves only 33% of executives believing ownership of the customer relationship lies with OEMs. By contrast, in 2015 almost two-thirds were still confident that OEMs would be able to defend the customer interface against third parties. Looking into regional differences in the survey reveals that consumers and executives in India /ASEAN, China, and South America believe most strongly that the customer relationship will shift to ICT companies. The disruption triggered by connectivity and digitalization will affect automotive companies

22-24_May_Cover story.indd 24

across all segments. The survey results show a noticeable difference between the regions regarding the impact of disruption on the different segments. Compared to executives in North America and Western Europe, executives in China see a significantly higher impact of disruption for auto companies across all segments. This goes along with the answers to the previous questions regarding the key trend connectivity, the possibility of a business model disruption, and the position of ICT companies at the point of sale. Just as before, executives from China are the ones who are more progressive and see a big change coming. A possible explanation for this could be that China’s auto industry and its structures are, compared to countries from the Triad, relatively young and therefore much more flexible. Chinese executives are not as bounded in “old” structures and are not as reluctant to change as their counterparts from more mature countries. KPMG says not all of today’s automakers will develop into customer- and service-driven mobility services providers. Many will retain a focus on a production and technology-led business model, not being able to cope with the demands of their connected customers. The ones impacted the least by the disruption will be low-cost manufacturers, as their business model will most likely stay unchanged. The main business of low-cost manufacturers is in less mature markets, which still offer a huge potential for the traditional auto business model as we know it today. Volume and mass-market manufacturers will be impacted the most, as they are stuck in the middle between cost-competitive manufacturing and an entirely new and challenging servicedriven business model. Based on their brand heritage, those manufacturers cannot rely on the high trust customers have in their brands and high margins at the point of sale. They are prone to lose the customer relationship to new entrants from converging industries like the ICT sector. Premium manufacturers will be impacted by the disruption as well, but they will have the best continued on page 26

Photo: Tramino , Sjoerd van der Wal – iStockphoto

be the leaders in the fields of e-mobility and autonomous driving, and are also expected to generally be the groundbreaking innovators in the next five years.”

www.autoserviceworld.com | JOBBER NEWS / MAY 2016

2016-04-13 10:04 PM

#AAPEX16

JN_May2016_ad pages.indd 25

2016-04-13 9:39 PM

cover feature | Biz Tech

“Every fifth respondent believes that vehicle manufacturers could also turn into mere contract manufacturers for ICT companies.” prerequisites to cope with the upcoming changes. Their strong and trusted brands will allow them to fight new entrants trying to take over the customer interface, at the point of sale and during the whole customer life cycle. Connectivity will pave the way for an entirely new data- and service-driven business model for those traditional auto companies able to retain a direct customer relationship. Not all survey respondents are convinced of this; every fifth respondent believes that vehicle manufacturers could also turn into mere contract manufacturers for ICT companies. Although strong informational engineering capabilities and a data-driven mindset will be key factors to compete with new entrants, most respondents said the usage of data in all corporate functions is currently at a very early state, at best. Autonomous Driving The majority of survey respondents sees self-driving features as an absolute purchasing criterion, or at least expect it to become more important by 2030. Survey results suggest that in a world of autonomous driving, classical differentiating factors will diminish in favour of total cost of ownership (TCO), questioning the sustainability of the traditional automotive business model. The era of the one-car product development cycle is over. To defend their position against third parties and respond to real-time customer needs, auto companies will need to manage different clock speeds for innovation, development processes, and corporate culture all at once. More than 80% of respondents see regulation as having a high or very high impact on the auto industry. The recent Dieselgate scandal shows that the technological challenges putting pressure on the auto sector regarding more eco-friendly alternative drivetrains have not become any smaller. The presence in emerging markets is more than ever fundamental to the success of global auto companies. China has not only become the most important market volume-wise; for the majority of respondents, China is now also the number-one

22-24_May_Cover story.indd 26

place to pilot new innovations and to launch new products. With BMW and Toyota, the surveyed executives see these two traditional auto companies leading the way in technological advancements and market success. But survey results also show that they cannot rest on their laurels, with a third of respondents believing ICT companies will bring groundbreaking innovations to the sector. This year’s survey shows that auto executives have fully embraced connectivity and digitalization and ranked it as the overarching key trend disrupting the auto industry until 2025. Ranked number 10 in KPMG’s 2015 survey, executives have moved connectivity up to number one this year, with half of them rating it as extremely important. For the last three years, the top concern was growth in emerging markets, which has now dropped to number four. Alternative powertrain technologies are high on the list of trends in 2016, with hybrid electric vehicles at number two, battery electric vehicles up from number nine to number three, and fuel cell electric mobility staying fairly constant at number five. In the aftermath of the Dieselgate scandal, alongside the increased importance of alternative drivetrains, the formerly high-ranked trend of downsizing internal combustion engines has dropped from number two in 2015 to number 10 in 2016. The surveyed executives also give more importance to autonomous and self-driving vehicles than one or two years before. Beyond that, the results reflect that executives recognize that vehicle- or customer-related data will be a crucial success factor for the coming years in the automotive industry. More than 40% estimate big data/user data as a very important key trend. The ranking of this year’s key trends clearly shows the auto industry is moving its focus away from product and technology and moving towards customer needs. We are indeed moving into a new era of business management. JN

www.autoserviceworld.com | JOBBER NEWS / MAY 2016

2016-04-13 10:04 PM

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2016-04-13 9:39 PM

cooling systems |

BY TOM VENETIS

SELLING

preventative maintenance

“Jobbers need to do a better job of reminding technicians to do a complete inspection of the entire cooling system, as profits are there to be had when the whole system is examined and needed parts across the system are replaced.” – BRIAN WHEELER, CORPORATE COMMUNICATIONS MANAGER, DAYCO

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ehicle cooling system technologies have improved dramatically over the last decade. The technology in everything from belts and hoses to water pumps and tensioners has advanced to the extent that these components now last longer than ever before. While this may be beneficial to vehicle owners, it places jobbers at a disadvantage. Longer-lasting parts mean fewer sales of those parts, as the change intervals are extended. Where before it was common to change a belt or hose at 50,000 km, it is now more common for that change interval to be 100,000 km or more. The key is having front-line counter staff remind service shops to sell cooling systems maintenance as a preventative service, and to make sure technicians understand the importance of inspecting the complete cooling system, not just individual components.

How components have become better It used to be that belts and hoses failed more often than they do now. Diagnosing wear or imminent failure was easy: a simple visual inspection of a belt or hose was usually enough. If the belt showed cracking, chunking, or wear of any kind, it was time to replace it. If hoses felt soft to the touch or showed signs of cracking or bulging, it was time to remove them and put new ones onto the engine. “Until the late ’90s and early 2000s, neoprene, the original rubber compound developed into serpentine belts, was the primary material in all belts,” says Dayco corporate communications manager Brian Wheeler. “While neoprene was, and still is, a good material for misalignment chirp noise, its flex fatigue characteristics are marginal, especially in hot and cold conditions that roll around yearly.”

Photo: rukawajung – iStock.com

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www.autoserviceworld.com | JOBBER NEWS / MAY 2016

2016-04-13 10:05 PM

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cooling systems | Over the last five years, there has been a decided shift away from neoprene to EPDM. “EPDM rubber makes belts and hoses more robust and durable, which allows them to last longer and perform better while operating under the typically more extreme conditions experienced by today’s high-performance engine designs,” says CRP Automotive director, brand management David Hirschhorn. “Because the parts are lasting longer, these improvements have helped make it possible for vehicle manufacturers to meet the requirements of extended maintenance intervals.” Tom Lee, marketing manager with Continental Contitech, North American Automotive Aftermarket, says the same thing has happened with hose materials as well. “The improved life of rubber products [is now at] the point where the first owner of the car is seldom concerned with part replacement.” In fact, the rubber used now in hoses is so

robust that “it retains its ‘like new’ appearance for many years, and does not crack as it ages.” Where the profits are For jobbers, such extended maintenance intervals hit the bottom line. So where does one find a profit now in those part components? All agree that jobbers must emphasize the basics to technicians: regular inspections of all components in a vehicle’s cooling system. “With one in six vehicles on the road today needing a new belt, there are still plenty of replacement opportunities in the bay each day,” says Gates Canada Inc. director of marketing Randy Chupka. “Education is the key to getting profits and proper repairs back on track. Consumers need to know that as little as 5% material loss can ruin a belt. Education opens the door for service writers to inform the consumer that the tensioner has the same replacement interval as the belt, so they

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should be changed together. And if a vehicle comes in for a squealing belt, the belt is usually not the culprit. Technicians need to inspect the accessory belt drive system for improper tension, misalignment, or contamination in the pulleys.” CRP’s Hirschhorn says that jobbers also need to move beyond selling parts alone. Jobbers need to encourage a complete and comprehensive inspection, and replacement of parts at regular intervals. “Jobbers should move beyond just selling a hose or a belt, and think of the much broader opportunities that are available,” Hirschhorn continues. “If the other components involved in the system are considered and brought into the equation, jobbers could be promoting and selling additional parts.” Hirschhorn gives the example of the accessory belt. If it needs to be replaced at 100,000 km, other parts such as the tensioners and idlers should be replaced at the same time, in accordance with manufacturers’ recommendations. “The same advice holds true for coolant hoses,” he adds. “Jobbers should encourage service technicians to check the entire cooling system, from thermostat to water pump to expansion tank. The amount of additional labour will not be significant when compared to the time it will take for the overall repair, but it will ensure the vehicle won’t have a breakdown (or worse) before the next service. Thinking in the ‘bigger picture’ of the system service will help keep profits up for both the jobber and technician.” Dayco’s Wheeler agrees that jobbers need to do a better job of reminding technicians to do a complete inspection of the entire cooling system, as profits are there to be had when the whole system is examined and needed parts across the system are replaced. Water pumps are critical in a cooling system, but many times technicians are reluctant to push for their replacement because vehicle owners are already in shock at the cost of replacing the belts and hoses, along with the other systems they work with. But not pushing that replacement is only inviting trouble. Jobbers need to make known that the dollars spent on these parts are a good investment. “Water pump failure is a distinct

www.autoserviceworld.com | JOBBER NEWS / MAY 2016

2016-04-13 10:06 PM

rubber makes the belts and hoses more robust and durable, which allows “EPDMthem to last longer and perform better while operating under more extreme conditions experienced by today’s high-performance engine designs.” – DAVID HIRSCHHORN, DIRECTOR, BRAND MANAGEMENT, CRP AUTOMOTIVE

possibility for those who hang onto their cars for more than a few years,” Wheeler adds. “But the pump rarely fails early on in a car’s life. The same is true of the timing belt and balance shaft belts, which are key parts on any car. So by the time the water pump requires replacement, you will probably be close to or beyond the recommended service interval for replacement of the belts.” “Within most vehicle manufacturers’ maintenance policies, inspection is recommended vs. a replacement interval and automatic replacement,” adds Continental’s Tom Lee. “But due to the fact that the hose or belt retains a good appearance and has no outward signs of wear or failure, the car owner assumes there is no reason for replacement until [they] fail. A hose failure is usually a catastrophic failure. The problem with basing a hose replacement on appearance is that you never know when a high-mileage hose will fail. Coolant hoses age from exposure to heat, ozone, or oil and grease contamination, but mostly from internal electrochemical degradation, or ECD. ECD can form cracks and pits that eat away the hose from the inside out, until eventually the hose perforates and starts to leak. Because of this, the risk of failure goes up with age and mileage of hoses. Any hose that is cracked, leaking, blistered, bulging, or shows other damage should be replaced. And any one hose that shows failure means the others are in a similar condition.” Another component set that should not be overlooked by jobbers is cooling fans and related components. Technicians need to be reminded that this set of components needs to be inspected regularly. “Although most technicians may be familiar with the steps needed to sort out an engine cooling issue, it helps to refresh some of the diagnostic steps that may be needed after eliminating obvious

problems. These include inspecting all electrical connections for secure fit and no sign of corrosion, and testing the fan motor for proper function,” says Rick Wagner, VDO electric motor category product manager, Continental Commercial Vehicles and Aftermarket. “If the cooling fan motor has been replaced in a previous service, the technician should check to make sure the correct part was used. A fan motor that is not able to meet the vehicle’s specific performance requirements may cause overheating issues. Technicians should check the fan motor fuse and replace if necessary. They should also check the fan motor relay, and test for proper current at the connector.” Matching coolant to vehicles One area of profit for jobbers that should not be overlooked is the selling of coolants. At one time, it used to be an easy sale, since there once were only a small number of coolant types; it was easy to pick and match a coolant to a vehicle. Now it is much more challenging, as coolant technologies have become more complicated and the number of coolant types has increased. The challenge for jobbers is knowing what kinds of coolants can be safely matched to specific vehicle makes and types; today’s cooling systems are designed to work only with specific formulations of coolants. Apart from the colour, jobbers should know that the biggest difference between different types of coolants is inhibitor packages that affect how a specific coolant reacts with the different metals in the engine and cooling system; they also affect the coolant’s compatibility with the rubber and plastic used in the cooling system, and the seals. Mismatching of coolant generally will not cause an immediate or catastrophic cooling system failure. Over time, however, mismatching will adversely

JOBBER NEWS / MAY 2016 |www.autoserviceworld.com

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impact the proper operation of the cooling system, leading to system clogging or corrosion of other critical parts. Gates Canada’s Chupka says jobbers need to make sure technicians regularly replace and correctly match coolants as part of a full cooling systems maintenance program. Coolant contamination from a failing hose or seal needs to be avoided. “Cooling system failure is still the number-one engine-related cause of roadside breakdown,” Chupka adds. “Most technicians need to know that about 40% of radiator failure is due to coolant contamination, and 95% of failed water pump seals have clean and visible evidence of coolant contamination. What does this mean for the technician? To ensure the longest life possible for the entire cooling system, it is considered good practice to perform a complete system flush and to replace the upper and lower radiator hoses at the same time with a water pump or radiator replacement.” Most coolants can be broken down into three main types: Inorganic Acid Technology (IAT), which was used in North American vehicles up to the late 1990s, and contains silicates and phosphate corrosion inhibitors to protect metal parts; Organic Acid Technology (OAT), which forgoes the use of silicates or phosphates; and Hybrid Organic Acid Technology (HOAT), which contains some silicates to inhibit corrosion, but has other additives for the prevention of rusting and corrosion. Still, even within those categories jobbers need to know which makes or models of vehicle can be properly matched to specific coolants. All makers of coolants now provide detailed lists of vehicle makes and models that the coolants are compatible with. These are available at their websites; jobbers and technicians alike are encouraged to consult them in order to make the right choice of coolant. JN 31

2016-04-13 10:06 PM

money & management |

HOW PREPARING A BUSINESS FOR SALE IS LIKE REHEARSING FOR A THEATRE PERFORMANCE

BY MARK BORKOWSKI

hen entering the centre-stage spotlight, both the business owner and a star performer must know their roles, the script, the story, as well as the other major players and the roles they will play. The goal of both is to achieve a certain response for their portrayal of the story, from a specific audience. Whether it is rave reviews for the actor or offers to buy the business for the owner, an experienced director is key to a successful presentation. Directing and orchestrating the behind-the-scenes activity for the successful sale of a company is the role of a professional mergers and acquisitions advisory firm. The Business Owner’s Role By opening night, the cast is ready to present an honest performance, exposing its triumphs as well as weaknesses. All will become visible under the due diligence spotlight. As in the classic tale, “The Emperor’s New Clothes,” the public will see what the cloth is really made of. Buyers don’t like surprises, and neither do business brokers or other members of the professional team involved in the sale process. Problems uncovered late impugn your integrity and threaten the price – and the deal. The more issues brought to the table and worked out in advance, the better chance of a smooth closing. Your role as the business owner is to be the source of information necessary to accurately assess the firm. Addressing the following issues will help maximize the value of the business, provide transparency to prospective buyers, and minimize the amount of time consumed in the sale process. This information will be the foundation of the script that will tell the story to your audience: the marketplace of buyers. Q Why is the business on the market? This is not only important from the buyer’s prospective, but an owner must have a sincere motivation to facilitate a smooth process. Q Are accounting procedures in place and easy to follow? Q Are profit and loss and balance sheets well prepared and clean? Q Are the facilities and equipment in good working condition? Curb appeal makes an impression.

When someone walks into a business establishment, they’re looking at everything. An orderly and organized facility gives a good feel for how the business is run. Q Is intellectual property (if applicable) well documented and up to date? Q Is there an appropriate lease in place, and is it transferable? Q Are customer contracts secure and transferable? Q Are employee contracts in place and well documented? Q Are operating procedures documented and in use? Q Are there outstanding legal or financial aspects that may hinder the sale? Q How is the business positioned in relation to the competition? Q What distinguishes the business from others in the same field? Q What services or products are offered that are unique? Q What niche is served? Q Are there areas for future growth? Q What makes the company’s customer service superior? The Story Once information gathering is complete and data is analyzed, a price range will be determined and a company profile will be formulated. This is the story of your business. It will be the marketing tool that articulates and presents the message about your company to the audience of buyers. The Script The script is made up of the individual pieces that tell the story. The following are individual items that will be pieced together by the prospective buyer in order to substantiate the story and justify the asking price. Q Financial statements. An accurate financial statement not only adds to a buyer’s comfort level, it more likely will result in a higher sale price. A potential buyer is typically looking for a predictable cash flow from the business. Three, four or five years of professionally prepared financial statements and tax returns will show them that.

Mark Borkowski is president of Toronto-based Mercantile Mergers & Acquisitions Corporation, a company that specializes in the sale of privately owned companies. He can be contacted at (416) 368-8466 ext. 232 or www.mercantilemergersacquisitions.com.

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Visit us on the WEB! Trends in accounts receivable and payables. When selling a business, you want to show that you have good customers who pay on time. Owners need to be on the ball and contacting slow-paying clients. This shows better credit management, follow-up, and attention to detail. Seasonality of cash flow and concentration of the customer base are also underlying themes of the story. Q Make sure patents, trademarks, and other property rights are properly registered. Review contracts for third-party consents needed in order to facilitate a transfer. An example would be a construction-subcontracting firm that has a contract with a homebuilder to provide doors and windows for an additional number of houses. That contract needs to be reviewed to see if it can be transferred or if it requires the consent of the homebuilder. Q Well-organized and updated collateral materials, such as employee handbooks, policy manuals, mission statements, or an online Internet presence add value in the eyes of the purchaser. Other collateral such as brochures, press releases, advertisements, and marketing campaigns such as mail-out or email programs add credence to the story. Q A list of furniture, fixtures, and equipment along with applicable service records shows the buyer that the company is well maintained. Remove excluded items prior to the sale, or list items excluded from the deal separately. Q Being prepared for questions the buyers will ask will facilitate a smooth process for all involved. Q

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The Players The team that a business owner puts together to assist in the structuring of the business sale will play key roles in the transaction. Depending on the size and complexity of the business, the usual team may consist of the firm’s accountant, attorney, and business broker. In order to insure a smooth process, it is recommended that all team members be experienced in business transfer transactions. Proper rehearsal and having the necessary props in place for presenting a business to the targeted audience is key to attaining the desired outcome: the successful sale of the business in a timely manner. This will ensure a rewarding finish to a performance well done. JN JOBBER NEWS / MAY 2016 |www.autoserviceworld.com

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2016-04-13 9:40 PM

counter talk | for the counterperson

BY MARTHA UNIACKE BREEN

A-B-Cs

THE

OF SOCIAL MEDIA

Photo: cnythzl – iStockphoto

s a medium for promoting your products and services, connecting and interacting with customers and other stakeholders, communicating helpful and timely information, and consolidating and building your reputation as the go-to expert in your field, social media is the ideal vehicle. Yet understandably, many industry members are baffled and intimidated by the entire idea. How do you get started? Which platforms are most effective for what you want to accomplish? How do you build an audience? How often should you post, and still have a life? And what, on earth, could you find to post? In fact, once you get started, it’s neither as time-consuming or as onerous as you may think. If you do the proper research first, and commit to a regular program that works for you and your followers, you’ll find it’s not only feasible but an excellent addition to your other marketing activities. Bob DeStefano is president of SVM E-Marketing Solutions, a New-Jersey based company that specializes in online marketing solutions for business. “The best way to describe social media marketing is to think of it not as a new concept per se, but as a new way of marketing,” says DeStefano. “It’s essentially the same as the regular public relations you may already be doing, but you are marketing directly to your peers instead of to the press.” Maintaining a successful social media presence carries a lot of other benefits as well. One of the most important is its power to build your brand by sharing information within a network

JOBBER NEWS / MAY 2016 |www.autoserviceworld.com

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that grows organically, building traffic to your website, creating a community, and ultimately positioning you as the go-to source for your products and services. If you are just starting out, the best place to start is with Facebook and Twitter, with LinkedIn as a third option. Facebook has become the fastest-growing tool for business in the last year or so, mainly since it’s already familiar to so many people. Launching a Facebook page is easy and free, and building followers is a straightforward process. Increasingly, though, the resources offered by Facebook have grown steadily to make it an excellent communications medium for businessto-business information as well, as a vehicle for disseminating product information, how-to videos, and articles on a wide range of information of relevance to your business community. Facebook posts and articles are also a great way for your company to reach out, build connections among employees and clients, and to nurture company culture. The connection is strengthened if you post a picture and byline of your CEO or another prominent team member as your “human face.” The other major winner from a b-to-b standpoint is Twitter. Simply because of its brevity, it’s a great way to communicate important messages quickly and easily, especially if you tweet frequently. Using Twitter hashtags, you can start discussions and monitor traffic directly, as followers retweet your messages and respond to you and to each other. It’s great for real-time communication, such as during an event, or for updates on an ongo35

2016-04-13 10:08 PM

counter talk | for the counterperson

ing marketing initiative. It’s also great for building traffic to other platforms such as your Facebook page or website, where you can invite followers to read and share longer articles and posts. LinkedIn is another popular social media platform for business users, though its focus is slightly different from Facebook and Twitter. LinkedIn’s particular strength is in its personnel communications abilities, and through LinkedIn groups, where followers can share information and participate in discussions on business topics. DeStefano advises that it’s good to have at least a company profile on LinkedIn where you can share business updates, personnel announcements, job postings, and other business information – both your own and clients’. Other options include Instagram and Pinterest, which focus on pictures and videos, often with short captions or texts, and YouTube, which has proven to be very useful for longer videos than the typical 30 seconds or less that works best on Facebook. Luciana Nechita, communications manager with AIA Canada, works with a team that manages two social media communications channels for the AIA, each with its own particular focus. The first is the association’s own platform, which goes to industry members and other interested parties. The second is its consumer-focused Be Car Care Aware platform, targeting consumers and customer-facing technicians, who share the information with their own clients. Before the AIA launched its social media program, she explains, the association conducted research into very specific questions. “We started by asking who our audience is, how familiar they are with our platforms, what information our audience wants, and what exactly we want to accomplish.” After conducting this initial research, they opted to focus on Facebook, Twitter, and LinkedIn, though they are continuing research into other platforms. Nechita points out that one way Twitter has proved most useful is in the context of promoting and building interest in industry events. It was inspired, she says, by the number of people she saw walking around events who were holding their phones in hand. “As part of an event, we will promote that we will be live-tweeting from the event; we’ll have a hashtag that identifies the particular conversation, so it encourages our followers to sign up and join in by following the event hashtag.” It’s also great for giving quick, timely bits of information on the AIA’s consumer program, Be Car Care Aware, particularly during the program’s two major annual campaigns, Be Car Care Aware Month in May and Car Safety Month in October. “During Be Car Care Aware Month, for example, we’ll tweet reminders, and also provide Twitter chats with experts and make them available to our consumer audience.” What to post begins with deciding exactly what you want to accomplish with your social media marketing. DeStefano recommends you talk to your customer-facing employees, such as counterpeople and sales team, and find out what customers want to know more about. Is it information on improving sales? Technical tips and product knowledge? News and information on manufacturer activities? Professional development and business articles? 36

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Bob DeStefano recommends a mix of about 75 to 25 of original content and shared information from other 100 followers sources. Few businesspeople have who retweet the resources to generate and post and share original content that often; instead, and interact the power of the Internet offers you virtually unlimited material that you with you, can share and adapt, along with than 1,000 original posts. There are sites that who don’t. disseminate information and articles – LUCIANA NECHITA, on virtually any topic; some, such AIA CANADA as Feedly, organize items into subject headings that you can mine for items to repost. Your suppliers’ sites may have regularly updated information that you can share. And, since the core of all social media is its community aspect, you can pass along items from your clients’ posts as well. “Be careful about making your content too promotional,” says Nechita. “A good ratio is about 80-20 information and self-promotion. A high amount of informational content shows people you care about them, with content that is relevant to their business. Then you can alternate it with your promo messages and gain credibility.” Tying your social media channels in with your website and with each other helps to build traffic on all your various media. “Your website should be where you have all of your content,” says Bob DeStefano, “so then you can use your social media platforms as ‘teasers,’ driving followers back to the website, where you can expand on the information in the post.” To be truly effective, your social media program needs to be regularly maintained, with a minimum of two to three Facebook posts per week and at least daily Twitter tweets. (Bob DeStefano recommends as much as five to fifteen Twitter messages per day, though one or two per day is really the minimum.) Fortunately, there are a number of online tools available, such as Buffer, that allow you to build a library of posts and deploy them automatically at regular intervals. Most importantly, “Create content that is important and relevant,” says Nechita. “This may take time, but different social channels give you access to different resources. Then see what people respond to; a video may gain you many ‘likes,’ for example, whereas an article won’t. So this will give you a good indication of what your followers want.” Once your social media platforms are up and running, if you are posting timely and interesting content on a regular basis, it will start to take on a life of its own. Followers will share with each other, join in discussions, “like” your posts and retweet your tweets, and your list of followers will grow. “Focus on quality rather than quantity in your posts,” says Nechita. “It’s better to have 100 followers who retweet and share and interact with you, than 1,000 who don’t. If you have dedicated followers, they’ll start to share your posts on their networks too.” JN

better “toIt’shave

”

www.autoserviceworld.com | JOBBER NEWS / MAY 2016

2016-04-13 10:08 PM

advertiser index | AAPEX......................................25 www.aapexshow.com ACI-Agri-Cover Inc. ....................15 www.accesscover.com Automotive Industries Association of Canada.................................34 www.aiacanada.com Arkema Canada Inc. ................. 14 www.arkema.ca AutoServiceWorld.com ...............33 www.autoserviceworld.com Brake Parts Inc./Raybestos .......... 27 www.relyonraybestos.com Chevron Canada Limited ............. 7 www.HavolineProDS.com Continental ContiTech ............. OBC www.contitech.ca Federal-Mogul Motorparts/ Fel-Pro Gaskets ........................ 11 www.felpro-only.com Federal-Mogul Motorparts/ Ferodo ...................................... 9 www.ferodo.com Federal-Mogul Motorparts/ Moog .................................. 8, IBC www.moogparts.com Jobber News Jobber of the Year Nomination Form ................37 www.autoserviceworld.com/awards/

Mopar Canada .......................... 13 www.MoparRepairConnection.ca Philips Automotive Lighting .........30 www.usa.philips.com ®

Promax Auto Parts Depot ............. 5 www.autopartsdepot.ca SATA Canada ......................outsert www.sata.com Schaeffler Automotive Aftermarket ............................... 10 www.repxpert.com

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.

NOMINATE SOMEONE TODAY! YOUR NAME: YOUR COMPANY NAME: YOUR COMPANY ADDRESS: PHONE NUMBER: (

)

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

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)

Shad’s R&R for Muscular Dystrophy ................... 21

BUSINESS SUCCESS:

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INDUSTRY INVOLVEMENT:

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COMMUNITY SERVICE:

VDO – A Trademark of the Continental Corporation.............. 18 www.vdo.com/usa

(Your Signature) (Date)

Wakefield Canada ................... IFC www.wakefieldrewards.com JOBBER NEWS / MAY 2016 |www.autoserviceworld.com

37_May_Ad index.indd 37

JOBBER OF

also online at www.autoserviceworld.com 37

2016-04-14 9:52 AM

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

REPORTS YOU SHOULD READ

ccess to a world of reports at your fingertips is probably one of the best aspects of our current information age, but sometimes it resembles more of a jungle than a highway. Having to slash your way through the clutter to get to what’s valuable can be frustrating. So I did a little path-clearing for you. Here are seven useful, concise reports you should read. I am confident that each one will provide value for you and your business. And best of all, they’re (mostly) free. To save you time, I’ve posted links to all at: www.autoserviceworld.com/features/7reports. Z 2015 Out of Cycle Review of Notorious Markets This December 2015 report from the Office of the U.S. Trade Representative highlights commercialscale trademark counterfeiting and copyright piracy. The Notorious Markets List highlights select online and physical marketplaces that reportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting. While most of the sites listed focus on pirated video, music, and games, a number of e-commerce sites do engage in the sale of counterfeit auto parts. If nothing else, the report serves as a strong reminder of how global the problem is. Z Cooperating with Customers on Warranty & Reverse Logistics: Taking the Pain Out of Warranty Returns The Automotive Aftermarket Suppliers Association’s (AASA) Special Report, authored by UPS, tackles this ever-present issue head-on in this July 2015 report. While warranty rates generally reside in double digits, the report reminds all that on average, only 2.5% of the returns were found to have actual quality issues.

Twitter: Andrew Ross (@JobberNews)

www.facebook.com/pages/ AutoServiceWorldcom/ 244916465611841

NEXT MONTH

38_May_Publishers Comment.indd 38

Z The Trans-Pacific Partnership and the Automotive Aftermarket: Threats and Opportunities This concise review of the yet-to-be ratified TPP agreement, published in January 2016 by the Automotive Industries Association of Canada (AIA), makes for good reading, though the conclusion that any effect on the aftermarket will be small, may not come as a surprise. Even though it is brief, at 24 pages, the report does spell out the basis for

this thinking – and that should provide intelligent guidance to anyone moving forward. Z KPMG Global Automotive Executive Survey While focused on the vehicle manufacturing world, this annual study provides interesting insights on the business issues that keep top-level automotive executives up at night, and by extension, where opportunities may or may not exist for the aftermarket. Z The View From Here: 2015 Productivity benchmarks in the Automotive Service Sector This AIA study, published in February 2016, provides an accessible analysis with a view to assessing the size, sales performance, and intentions of the Canadian service sector. The study cites the performance characteristics of small (1-3 bays), medium (4-6 bays), and large (7+ bays) operations, focusing on repair orders per year, average hours sold per repair order, average repair orders per technician per day, and hours sold per technician per day, all with regional breakdowns. Z Avoiding the 10 Most Common Mistakes When Selecting a Technology Solution This brief “Thought Leadership” white paper from Epicor is an assembly of the most common mistakes made when choosing and implementing a business management system. With only a small amount of self-serving phraseology, the key points are easily applicable to any series of technology decisions. As such, smart jobbers should probably print it out and pin it up in their office. Z Growing Number of Women Who Own Vehicles Points to Shift Needed in Aftermarket Strategy Frost & Sullivan’s Insight Report outlines the impact that demographic shifts have had in the North American vehicle market. Current statistics show that over 50% of license holders in North America are women. The number skews even higher toward women (53%) when considering Gen Y drivers, a consumer segment that is poised to become the biggest target demographic for any business. Overall, these reports provide a broad perspective on some of the many issues we all deal with in the aftermarket industry. Happy reading! JN

13th Annual Retail Intelligence Issue: Effective Marketing Strategies For Jobbers | Preview: Automotive Service and Repair Week (NACE & CARS) | PC-11: The Diesel Engine Oil of the Future www.autoserviceworld.com | JOBBER NEWS / MAY 2016

2016-04-13 10:11 PM

More miles in every MOOG.

From engineering to testing to manufacturing to support, we go the extra mile to ensure our parts live up to the MOOG reputation for strength and durability. We recently invited Mike Rowe to come and help put us to the test. He was blown away by what he saw and heard. We think you will be too. Watch Mike Rowe in our new web series, The Extra Mile, at moogparts.com

#partsmatter

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2016-04-13 9:40 PM

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2016-04-13 9:41 PM