In this issue of Truck Parts & Service we take our annual look at the aftermarket’s performance and dynamics for the year we leave behind, as well as what to expect in the year ahead. This market review and outlook is accompanied by the new “TPS Reader Survey: The Year in Review,” which shows how readers fared during the year.
It was not a good year.
During interviews for the cover story with distributors and industry experts, I asked what were the positives of 2009? The question was almost universally met with silence or hemming and hawing. From a business perspective, there was not a lot of good to come out of last year.
The “TPS Reader Survey” reinforces this – about 65 percent reported lower year-over-year sales, with 40 percent expecting a dip of 10 percent or more.
While the numbers show it was, at best, a challenging year for the majority of aftermarket businesses, it’s the comments that some respondents provided with their survey answers that show just how difficult things were.
In addition to lower sales, it was hard to call anything business as usual.
For instance:
- As a body shop operator pointed out, depressed truck values meant that some trucks that would historically have been repaired now are considered totaled and not repaired.
- Economics trumped tradition as one distributor says major customers curtailed their purchases for the first time in 30 years of doing business together.
- Increased training opportunities, greater attention to business needs and more favorable pricing from suppliers were a few positives reported by readers.
- As one reader put it, “price, price, price” was the driving factor behind end users’ decisions on parts and service needs – and that’s if parts are purchased or repairs are made at all. With freight volumes low and many trucks sitting idle, fleets simply parked vehicles that needed repairs and put a parked one into service. About 30 percent of respondents said customers were neglecting normal maintenance and about 25 percent said customers were forgoing necessary repairs.
- To keep the books in the black, many readers went on the offensive, getting more aggressive to go after sales. “We went out and beat the bushes,” one respondent noted. The focus was to both go after new customers and try and grow business with existing customers.
- While “price, price, price” was the mantra for customers, “cut, cut, cut” was the new norm for readers. To avoid layoffs, one company went to a 32-hour work week. When employees left companies, those vacated positions usually were left vacant. Some found layoffs inevitable. Inventories were reduced to bare minimums.
Not a pretty picture, but one that may very well bode well for the future of the aftermarket. When we emerge from this downturn, there is no doubt we will be leaner and meaner. It’s not much of a silver lining, but let’s hope this year brings better news than last year.
