by

Brian Taylor

The Automotive Parts Rebuilders' Association held their European Symposium in the UK recently. AP&A's Brian Taylor was one of the few international motoring writers in attendance. To open the day the delegates were shown the results of a survey of views from twelve different member companies representing a cross-section of products and a sizeable proportion of the sector volume.

Views of European members

Source; APRA European Symposium

The conclusions drawn were that most in the survey saw a slowly growing but consolidating market with nearly 70% seeing independents growing by subcontracting to vehicle assembler and o.e.m. parts manufacturers. New products would also enter the remanufacturing arena but they were unsure whether technology is a threat or an opportunity. And in the light of developments like Delco Remy's recent Hungarian investment, a surprisingly low 66% saw the sector becoming more international in nature.

Value of the brand

French based research company GIPA put the European parts and labour market at 107 bn Euros that equates to around £70bn. In a very competitive market with parts lasting longer, they reported the trend for vehicle assemblers to build second line parts brands to compete in the aftermarket and so keep their parts profit high.

As far as selling remanufactured products and their values to consumers the industry still has a problem. Consumers only recognise the terms original, other brands of new components and used components. The differentiation between remanufactured, rebuilt, used, etc does not exist. Anything not new is seen as not so good and non o.e. brands are seen as not as good as vehicle assembler brands. This is where the power of the brand will come into play.

Future developments

The Symposium looked at product developments that will eventually effect remanufacturers. Some changes in product for the future concerning electrics included the increased use of liquid-cooled generators because they have no brushes and are maintenance free. The on-going increased demand for on-board power will result in 42-volt systems becoming the norm supported by 12-volt systems for certain power demands. The 42 volts will be used for the higher load components like combined starter-generator units and the new integrated starter-generator-flywheel units. But there will also be more small direct current motors that will use the 12-volt system. Currently the value of remanufactured alternators is higher per unit than starters.

UK Starter/Alternator remanufacturing market

Source; Sovereign

Other developments include electro-hydraulic brakes, braking by wire, electric steering, steering by wire. The clutch developments will feature non-electric self adjust units and electrically activated clutches. Transmission systems will include electrically operated gear shifting and electrically operated automatic gearboxes. Integrated hub/bearing/drive shaft units will come into play along with electrically driven and controlled water pumps.

There will be a general need to get rid of drive-belts and pulleys that limit flexibility in the placing of parts within the extremely limited under-bonnet space, which has become a premium as low drag designs reduce drag coefficients further. And increased on-board driver comfort equipment is also fighting for space.

Electric air-conditioning compressors will increasingly be fitted. And all these changes will occur within a decade.

A/C growth

One product group that is currently going through extraordinary growth in Europe is remanufactured air-conditioning compressors. Michael Sunday, President of a leading American remanufacturer, said that he had never experienced such growth in his 32 years in the business. The current UK remanufacturing capacity is 50,000 units a year - far below the European total requirements as the graph shows. In fact between 2000 and 2004 the requirement is likely to grow by 296% with 978,668 units being required from a parc of 60,717,798 vehicles fitted with A/C. This understates the true potential by accepting that out of the 45,923.971 cars requiring A/C servicing only 5,759.176 will actually be serviced. If owners could be persuaded to have the A/C serviced the component market would be higher.

Western European New Passenger Car Factory A/C Penetration
12,964,267 in 2004

Source; APRA European Symposium

European new or remanufactured A/C compressor demand

Source; APRA European Symposium

Core control

Tim Smith of Delphi Lockheed made an interesting comment regarding the rush by vehicle assemblers and parts manufacturers towards fast-fit chain ownership and installer distance retailing programmes. He saw these as the lifeblood of old core. Not just as more efficient sales channels to older vehicles. Puts a slightly different slant on it.

Legislation review

Several pieces of European legislation were discussed at the Symposium.

Design Regulation
The Commission submitted an amended proposal to the Design Directive, which will enable a company to obtain a Community-wide exclusive design right. As regards spare parts it provides that non-visible components (parts under the bonnet) as well as 'must match parts (body panels, lighting and automotive glass) will not be protected. The first part of the exception will certainly pass but a lot of flack and lobbying still surrounds must-match spares. It could be that this part of the legislation only comes into effect in countries where there is currently no protection (Italy, UK, Spain and possibly Portugal).

Product Piracy
Vehicle assemblers have continued attempts to associate non-o.e. spare parts with piracy and counterfeiting. They have been able to do so because of an ambiguous definition of piracy in the Commission Greenbook entitled Combating Counterfeiting and Piracy in the Single Market. The Commission had signalled that it intends to correct this definition and amendments are tabled in Parliament that suggests appropriate modifications.

OBD
A procedural mishap has toughened up the OBD initiative and it is now unequivocally established that all aftermarket interests may demand necessary repair information. However, the bad news is that the issue of component compatibility still awaits solution on both sides of the Atlantic. How can it be made sure that independent replacement parts can be produced and used without being rejected by a vehicle assembler's OBD system? Some difficult negotiations still lie ahead and Ford's arrangements with SEMA in the USA might signpost the way ahead.

ELVS
The ELVs Directive has almost reached the stage of final adoption and is certain to oblige vehicle assemblers to take back ELVs FOC. The Directive will cover vehicles and components - irrespective of how the vehicle has been serviced or repaired during use and irrespective of whether it is equipped with o.e. or aftermarket parts.

BuyReman.com

The APRA's e-commerce service is going from strength to strength. As of the end of February 2000, 79 companies had joined. It has grown substantially since then. They benefit from such services as the Virtual Trade Show which acts as a virtual trade stand promoting company products, Product Showcase which features an indexed and cross-referenced collective of all catalogues in the e-marketplace, Offer and Business Exchange which is an on-line needs matching and transaction facility, Resource Centre which is a library of company information and Auction House the on-line auction facility.

On top of these, 30 virtual trade booths had been set up by suppliers, 7 by remanufacturers of parts, and 3 by special service providers. A further 25 companies were currently building virtual trade booths at the time of the Symposium.

Bigger European Symposium for 2001

Year 2001 will see the APRA European Symposium replaced by a much bigger event that will feature a trade show. It will be called ReMaTec 2001 and will be held in Amsterdam during June 10-12th.