Weighing your options

Blogs Jason Cannon April 1, 2013

Options are great, right?

Coke or Pepsi? Blue Cheese or Ranch? Baked potato or fries?

Those are the good kinds of options.

Options are for the benefit of the consumer.

If you’re the provider, options are the noose around your checkbook.

In the parts and aftermarket business, options vary by brand affiliation and are only limited to the sheer numbers you can afford to carry.

Then, there’s a split.

For engine components, you have to ask yourself:

Is LNG/CNG coming or is it already here?

Is propane for real?

What parts do I have for which nameplates? What parts do I need?

What parts do I need more of?

Does my staff know how to sell these parts? Do they know their target audience?

Then, another curve ball: Most of the answers to those questions only apply to your heavy-duty customers, right?

Could you help a guy whose Ram 5500 limped into your shop’s parking lot?  Do you, the distributor, have the capacity to help a heavy-duty customer looking to branch out into the medium-duty marketplace?

As detailed in the April 2013 print edition of Truck Parts & Service, the medium duty marketplace is growing. As the vehicle population grows, so does service opportunities and the opportunities for aftermarket sales.

You’ve probably seen the Dodge Super Bowl commercial “So God made a farmer,” right?

According to the last census of agriculture, there were 2.2 million farms in the United States, covering about 922 million acres.

Most of those guys haul hay, wheat, corn, grain, feed, fertilizer and assorted other whatnots in medium-duty trucks.

Sure, the big operations have some heavy-duty rigs but generally the outfits that have heavy-duty trucks have medium-duty ones, too.

According to research from MacKay & Company, agriculture makes up 10 percent of the medium-duty marketplace.

School buses are by far the segment leader with 23 percent.

The Institute of Education Sciences says there are nearly 100,000 public schools in the country, and another 33,000 private schools.

With 33 percent in any given market in the United States, would it help your business to be in a position to service medium-duty demands?

How many farmers live in your area? How many schools are there and how many school buses do neighboring districts have? What kind are they?

What kind of trucks are your local farmers and local haulers driving?

It may take a day or two to dig for these answers, but they can go a long way in helping you decide if this is a market you can and want to support.

You may find that 80 percent of all your local school buses are the same brand. Ask the school’s transportation foreman about maintenance. It may be handled in-house, but given rashes of education cutbacks, it may not be — or it may not be for much longer.

Where do they order their parts? Are they drop-shipped from a warehouse? Would they benefit from having a ready supply within an hour’s drive?

Same for the farmers and local haulers.

While they’re probably mechanically capable, farmers may not have time to work on their trucks.

Local haulers are more worried about delivering their goods than scheduled maintenance. Provide that service for them if you can.

This market is flooding with opportunity.

In February the medium-duty market moved 12,270 units, up 11.3 percent from year-ago, according to WardsAuto.

Boosted by a 341.4 percent gain at Ford, Class 6 recorded the largest increase of any large-truck group last month.

Class 5 sales grew 5.6 percent last month, mostly on the heels of growth at Isuzu, International and Ford.

Sales figures prove these trucks are rolling off the dealership lots, and at a much greater volume than their heavy-duty counterparts.

If you have the capacity to reach out to even a sliver of this marketplace, you may find it well worth your time and investment.

Jason Cannon is Online Managing Editor for Truck Parts & Service.

You can follow me on twitter at @By_Jason_Cannon