VIPAR President Chris Baer speaks Monday during the opening session at the VIPAR Heavy Duty Annual Business Conference.Optimism, excitement and opportunity dominated Monday’s opening general session at the 2018 VIPAR Heavy Duty Annual Business Conference in Marco Island, Fla.
Pointing to a still strong economy and a series of organizational initiatives that have optimized the group’s business procedures, VIPAR Heavy Duty Chairman Bill Nolan and President and CEO Chris Baer say it’s a good time to be in the truck parts business and a great time to be within the VIPAR Heavy Duty family of companies.
Baer says purchases between VIPAR Heavy Duty and Power Heavy Duty companies are up 8 percent over last year and 2 percent ahead of projections for 2018. He says the organization’s sales totals also remain substantially ahead of the industry at large as the group takes advantage of the second-longest period of economic expansion since World War II.
But the group’s recent success isn’t just found on the bottom line.
Baer and Nolan also note the company has spent the last 12 to 24 months revamping the technology and stockholder services available to VIPAR Heavy Duty distributors. Nolan says product and customer expertise has helped VIPAR Heavy Duty companies dominate their local markets for decades and the recent advancements made by the organization should enable each stockholder to better compete with a rapidly changing and competitive marketplace in the years ahead.
Nolan, also president at PBS Truck Parts, says VIPAR Heavy Duty’s changes will help distributors remain successful when the watchful eye of non-traditional competitors and national aftermarket distributor chains bring their focus “back to us.”
Baer calls out a long overdue overhaul of the company’s technology platform and its restructured and fully optimized Global Parts Network (GPN) production line as two key initiatives that are already paying dividends for the group.
Monday’s opening session also featured presentations on program management, marketing, business development, data management and an expanded discussion on GPN from VIPAR Heavy Duty’s management team.
Larry Griffin, vice president of program management, says VIPAR Heavy Duty is using an open dialogue with its supplier partners to address price changes coming to the market due to trade and tariff uncertainty. The group has developed product advisory councils with stockholders from the U.S., Canada and Mexico, and each council will be meeting regularly to address and solve the unique challenges they face in their section of the aftermarket.
Vice President of Marketing Jeff Paul’s presentation focused on the company’s advancements in creating a content repository and online sales portal distributors can leverage in their operations. Paul says VIPAR Heavy Duty hopes to be an intermediary between its distributors and suppliers, acquiring all product information from the latter and distributing it to the former in real time so distributors can invest more time in customizing their online sales portal to fit their marketplace.
MacKay & Company, IHS Markit talk future
VIPAR Heavy Duty also welcomed two presenters from outside the organization, John Blodgett of MacKay & Company and Matt Trentacosta of IHS Markit.
Blodgett’s presentation followed the theme introduced by Nolan and Baer, addressing the current strength of the aftermarket and the likelihood the market’s strong stretch will continue into 2019. Blodgett says MacKay & Company is projecting the Class 6-8 truck, trailer and container chassis aftermarket to grow from $29.6 billion in retail sales last year to $31.4 billion in 2018, a jump of more than 6 percent. Blodgett says the OES dealer channel is tracking at a higher rate this year than the independent channel but adds the independent channel has shown month-over-month growth of at least 3.7 percent every month this year in its DataPulse market survey. He also notes MacKay & Company is projecting the overall market at a 3.3 percent compound annual growth rate from 2018 to 2023.
Looking at the economy at large, Blodgett does note the current extended growth period is well into the boom phase of the economic cycle, which means when the market finally does change direction it will be down. He says the good news, if there is good news when talking recession, is the “the aftermarket is where you want to be in a recession” because the market isn’t as volatile as the OES channel.
Trentacosta’s presentation advanced Blodgett’s forward-thinking out as far as 2040, discussing a study being conducted by IHS Markit on the future of alternative fuels, power generation and autonomous vehicles.
On the fuel spectrum, Trentacosta says fuel economy regulations first introduced in Japan, Europe and the United States have led to the adoption of more efficient diesel engines across the globe. Trentacosta says IHS Markit’s study on future trucks indicates diesel continues to show a “winning mix of durability, range and ease of use” and that electric vehicle adoption will likely only grow in specific duty cycles where battery’s deficiencies (weight, price) are less burdensome.
“We are not going to see massive shifts” in fuel preference, he says.
As for vehicle autonomy, Trentacosta says Level 4 autonomy is likely coming in the coming decades but Level 5, full autonomy, remains unlikely. He says IHS’s research indicates Class 8 long-haul fleet customers are most likely to adopt Level 4’s advanced driver assistance technologies and, by 2040, the company pegs Level 4 adoption at less than 15cpercent of the Class 8 market in its most progressive study.
