Heavy Vehicle Parts Aftermarket Part 1
Changes in the Truck Parts & Component Aftermarket
By Mike Whalen
During the 70’s and early eighties I managed a parts business that served the off-highway truck and equipment market segments. The business started as a small filtration distributorship that added other parts specialties that included hydraulic hose, fittings and pre-made hose assemblies plus mufflers and exhaust parts and wear parts for off-road equipment.
We concentrated on the HD off-road market segments and stayed away from the on-highway long haul markets. As we grew, we also stayed away from large truck fleet accounts that were the targets of the large parts distributors. Simply put, we could not compete with multi-branch parts distributors and OEM dealers.
Our customers were mixed vocational fleets of purpose-built trucks and off-road equipment serving the construction, forestry, mining and municipal markets. We also made sure the parts groups we carried all had a service component.
For over 100 years commercial vehicle drive trains have been made up of an engine – gasoline or diesel – a clutch and transmission plus drive shaft, rear-end assembly and brakes.
Today, the truck drive train configurations offered by the major truck manufacturers are manufactured in-house or by a subsidiary. The complex computer and electronic systems found in today’s heavy trucks are designed to work with those drive trains.
The diesel engine has dominated the medium to heavy truck industry into the early part of the 21st century. Now the diesel engine is being challenged by propane, natural gas, hydrogen and electric.
Improvements in electric powertrain design – plus diesel fuel costs – are pushing the Class 7 / 8 trucks used in the highway market to utilize some form of electric power.
However, heavy-duty vocational markets such as construction, forestry, utility and mining require a power level that can only be found in a diesel engine. Heavy-duty on / off road truck manufacturers such as Kenworth, Peterbilt, Mack, Navistar, Volvo, etc., offer their own diesel engines and drive trains as well as diesel engines for repowering. Examples are Cummins, Navistar and FPT.
The parts aftermarket has come full circle.
In the beginning the OEM controlled parts and service. As the heavy truck began to use customer spec’d components, new manufacturers stepped up to fill the need. This led to the (ISP) independent service provider competing for service sales plus independent aftermarket parts distributors selling parts and components in competition with the OE Dealer and to OE dealers working on competitor’s vehicles.
Today the combination of vertical manufacturing and computer management of the truck’s operating systems has made it difficult for the independent service provider (ISP) to compete without working together with the OEM for repair information. To make sure they have access to the needed technical information, the ISP is forced to support the parts offerings of the OE dealer.
The large fleets, for the same reason, are also forced to purchase parts and service from the OE Dealer during and after the warrantee period. The owner operator and small fleet, the traditional customers of the ISP’s, provide additional business for the OEM through the ISP.
To further access the parts aftermarket, each major truck manufacturer now offers an all-makes parts program through its dealer network.
It’s estimated that the OEM’s have a current aftermarket share in excess of 70% and are closing in on the 100% market share that they had in the beginning. Part Two, (March issue) we’ll look at ways the independent parts distributor and service provider can survive the evolution of the heavy vehicle parts aftermarket.☚