Mopar rejoins OE parts flight; suppliers devise new product lines to boost aftermarket share - original equipment automobile parts

Discount Store News, August 20, 1990

Mopar Rejoins OE Parts Fight

Chrysler is taking a step back into the auto aftermarket by launching a test to have its dealers supply a few Sears auto centers in Chicago with its Mopar brand original equipment (OE) parts.

But Chrysler won't find it easy to reenter the aftermarket it abandoned some 10 years ago.

Just ask Ford. K mart dropped the Ford Motorcraft OE line last year. Motorcraft said it declined to meet K mart's price demands.

Motorcraft also took a hit when Ames closed 221 of the former Zayre stores that carried Motorcraft filters and plugs.

Moreover, the "mystique of quality" that OE parts carry has declined over the years, aftermarket consultants and distributors said.

Foreign Car Owners Favor OE Parts

In an exception, however, owners of imported automobiles tend to be more loyal to OE parts for their cars, and Toyota is enjoying some success with retail shops within dealerships that sell Toyota parts and accessories.

And, the perceived quality associated with domestic OE parts, AC-Delco from General Motors as well as Motorcraft from Ford, is more prevalent in the minds of purchasers of newer domestic cars (less than four years old) now that Detroit has improved overall car quality, they said.

Generally speaking, though, the trend appears to be away from OE parts among domestic car owners, who primarily shop for price, rather than insist on, say, Delco or Motorcraft oil, air and fuel filters, batteries or sparkplugs.

OE manufactures, of course, view the situation differently and have taken steps to boost market share.

AC-Delco, which views itself as an aftermarket supplier for all makes of cars, is introducing next year a line of AC-Delco motor oil which it says will be priced to compete with premium brands of oil such as Pennzoil, Quaker State and Valvoline. GM already markets GM Goodwrench brand oil that its dealers use in Quick Lube Plus centers.

Delco also plans to introduce at the Specialty Eqipment Manufacturers Association's show in Las Vegas this October a new, 30-sku line of chrome appearance parts, such as air filter dress-up kits and valve covers, pushing its product categories to 37.

AC-Delco claims that it has increased an unspecified market share in replacement car batteries by initiating a new delivery service that promises next day delivery. The trucks also carry unordered inventory, so retailers can pick batteries on the spot.

Motorcraft claims that 1989 was the fourth year of record sales in the aftermarket, with a gain of about 10 percent.

To make it easier for Ford owners to choose OE parts, Motorcraft developed its Parts Data Card program. At cooperating chains, owners of Ford and Mercury cars can apply for a credit-card size reference card that lists the stock numbers of oil and air filters, sparkplugs, batteries and the proper oil

viscosity for their particular cars.

More than 500,000 have signed up at such aftermarket specialty chains as Advance Auto, Roanoke, Va., and Pep Boys -- Mannie, Moe & Jack, Philadelphia, said Thomas G. King, national sales manager for Motorcraft.

Chrysler refused to disclose any details about its test with Sears, and Sears officials were unavailable for comment.

The test involves only a handful of Sears auto centers, said Hank Allesio, president of Easton Consultants, Hopkinton, Mass. Chrysler dealers will serve as wholesalers, ready to supply any parts, such as brake pads, starters and shocks, that Sears installs, he said.

"I don't think you'll soon see Mopar brand parts on retail shelves," he said.

"Only a small percentage, perhaps 10 percent or 20 percent, of car owners are OE buyers. I don't think the general public perceives any quality differences," he said.

Brand studies show that the percentage of OE goods "remains rather steady," Allessio said.

AC-Delco and Motorcraft perceive greater growth opportunity among their own dealers and independent repair shops, Allessio said.

The trend toward OE applications is increasing, however, among imported automobile owners and owners of newer cars, said Jim Lang, an automotives marketing consultant who publishes the Lang Market Report newsletter. "The OE issue is strongest among foreign car owners, instead of domestic."

"The performance enthusiast who drives a Jaguar, BMW or Mercedes might insist on Bosch plugs," Lang said, whereas a Chevy owner is less likely to specify AC-Delco plugs.

Mopar bailed out of the aftermarket about 10 years ago after failing in a major effort to get established, said Marty Butler, executive director of the Distributors Institute, Chicago.

"I'm surprised that Mopar would try to re-enter a stagnant, fiercely competitive aftermarket," Butler said.

Mopar probably had to make "special consideration to get its foot in the door" at Sears, Butler said.

In recent years, Detroit has been unwilling to "wheel and deal in the trenches," Butler said. Their rigid policies caused AC-Delco and Motorcraft to lose aftermarket share, he said.

Motorcraft parted company with K mart last year "because it wouldn't meet the price K mart demanded," said Tom King, Motorcraft national sales manager for independent channels.