PRESS RELEASES - AUTOMOTIVE AFTERMARKET
GAP 1999 ITALIAN AUTOMOTIVE AFTERMARKET TRENDS
Diagonal Reports Global Aftermarket Panel (1999) interviewed 170 marketing channel experts representing more than 30,000 outlets, and 60 million service visits in 18 countries.
GAP 1999 reviewed industry parts/services demand, and company/brand performance. In the fast-changing global aftermarket parts purchasing critera and distribution are increasingly hard to disentange. Here are some of the most important issues in the Italian automotive service aftermarket...
The aftermarket in Italy is generally positive. Stricter MOT tests (revisioni) grew business in 1999, but the car renewal campaign took a lot of older cars out of circulation. The high demand for MOT-related services and parts, and general check-ups will continue. The increasing number of electronic components and their greater complexity, will grow demand for these repair services.
The saturated service sector is consolidating. The big car makers are trying to lure customers away from independents. Dealerships benefit from increased sales of new cars because when cars and parts are under warranty consumers tend to take them authorised dealerships. Competition from fast-service chains (Norauto and Midas) selling easy-to-fit parts, e.g. windshield wipers and tyres, is increasing.
High loyalty to genuine parts
Genuine or premium (OEM) brands dominate the Italian aftermarket. Manufacturerers maintain loyalty by offering long warranties, good discounts, and buying agreements, along with stringent check-ups to ensure compliance. Fiat is the top selling brand in almost all parts' categories due to:
- the large number of Fiat cars,
- the brand's reputation for quality and innovation,
- wide coverage of Italian car park (the brand can be fitted into almost all Italian cars),
- parts available in many different price points,
- strong loyalty by service outlets and car owners
The highly brand-aware Italian car owners maintain loyalty in the aftermarket, particularly in Fiat service outlets. One manager observed that Fiat clients are among the most intensely brand conscious: "It is the Italian mentality to want original parts. Clients pay more because they are obsessed with original parts."
Dangers ahead
The market is changing and competition is heating up. Strong brand loyalty could erode if conscious becomes more price-conscious. New entrants, along with competition from non-genuine parts, are forcing parts' prices down. Despite rising costs of labour service outlets cannot pass them on to budget-conscious consumers.
Further, many experts believe that there are minimal quality differences among the top brands and "more worringly "that non-genuines offer comparable quality at a lower price. A Fiat outlet commented, 'We must buy Fiat. Other brands may cost less and be just as good'.
Vol. 2.No. 12. MCMXCIX Copyright © 1999 Diagonal Reports Ltd.
