Coming or going: opportunity in parts

For every exit strategy, there can be a plan for a business startup.

At least that seems to be the case in the parts business, where some of today's bigger players got their start when someone else got out of the market.

A look through this, our annual Aftermarket Parts & Accessories Issue, will show several instances of major companies entering or benefiting as others exit the aftermarket.

Hyundai Translead recently became the latest trailer manufacturer to outsource its parts program, giving a third party a major opportunity to increase significantly its sales. As part of a restructuring of its aftermarket parts program, Hyundai named Aurora Parts & Accessories as a master parts dealer in North America. Aurora joins Belgrade Parts, Southeast Trailer Mart, ITEC Canada, and Resalta in Mexico as companies responsible for getting parts for Hyundai trailers into the aftermarket.

“We determined that fundamental changes were needed to bring our service up to those customers' expectations,” says Stuart James, vice-president of sales. “After examining several options we decided to outsource the retail operation.”

Until recently, the same infrastructure that handled parts for Hyundai automobiles also served as the trailer manufacturer's parts distribution centers. But operational experience showed that handling the bulky components that make up 53-ft trailers is a different process — and business — from the compact components used in subcompact cars.

The account is a significant one, as Hyundai continues to populate its trailer base and thereby increase the potential market for parts. According to Trailer/Body Builders' list of the top trailer manufacturers, Hyundai is North America's fifth largest trailer manufacturer, producing almost 27,000 trailers and container chassis last year.

Hyundai follows a couple of other major trailer manufacturers into the Aurora fold. Aurora got its start a few years ago when it bought the Wabash National parts operation. Ironically, Wabash had been in a similar position a few years earlier when it acquired the Fruehauf parts operation.

Strick Corporation took the same path as Hyundai four years ago, naming New Life Transport Parts Center as its authorized outlet for Strick aftermarket repair parts throughout the United States. And like Aurora, New Life entered the business when a major trailer manufacturer ceased operations. The year was 1974, and Joe Hinton — who had headed up the aftermarket parts operation for Brown Trailer — bought the operation out of bankruptcy. After starting a business built around selling parts for a trailer brand that was no longer being manufactured, New Life has grown significantly — even as demand for Brown Trailer parts virtually shrank to extinction.

This is not to say that trailer manufacturers cannot be successful in the parts business. Major manufacturers such as Great Dane, Utility, and Trailmobile have a long history of successful parts operations. And Heil Trailer International just announced it is increasing its involvement with the aftermarket through its Heil 4 Parts! program.

It is to say, though, that manufacturing trailers and selling the parts for those trailers clearly are two very different disciplines. Success or failure in trailer manufacturing is not tied directly to success or failure in the aftermarket.

But major opportunities in the aftermarket frequently come tied to major events in the industry. As New Life president Bob Hinton said in our story on his company elsewhere in this issue, startups really need a catalyst to be successful. Perhaps that catalyst takes the form of another company's bankruptcy. Or it may simply be a decision for one company to leave a vacuum in the market. Either way, at least in the parts business, one company's exit plan can trigger another company's business plan.

As we look ahead to next year, when the pre-buy of diesel trucks is over and a major decline in sales seems imminent, there are bound to be catalysts coming. It should be easy to identify the challenges. But what opportunities do you see?

New e-mail addresses at TBB

The entire staff at Trailer/Body Builders has new e-mail addresses.

Following Prism Business Media's acquisition of the entire stable of Penton Media's business-to-business magazines, we now have have one working e-mail address with the new penton.com domain.

The transition period is over, and the primediabusiness.com addresses no longer function.

If you want to e-mail us here at Trailer/Body Builders, please use the initial of the first name of the person you want to reach, followed by the last name and the penton.com domain. We look forward to hearing from you.
[email protected]

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