Parts manufacturers provide their input

Almost 30 parts manufacturers and other OEMs who visit the Trailer/Body Builders website and receive our e-mail newsletter chose to participate in our parts department survey.

Because their business is substantially different from that of a conventional parts retail operation, we did not include their responses in the overall industry totals. However, they provided some interesting input, and we crunched some of their numbers. Here is what they told us:

  • More than a third cut gross margins.

  • A third of the companies reduced employment levels.

  • 40% implemented a hiring freeze.

  • 22% reduced salaries.

  • 48% said they marketed their products more aggressively.

  • Parts volume for them is up 6% so far in 2010.

  • They have lost 0.6 points of gross margin this year.

  • They have expanded inventories by 4% in 2010.

  • On average, manufacturers have increased inventory levels by 4% this year.

  • They have reduced employment 5%.

  • Those companies that have a parts manager are paying 1% more on average this year. Inside and outside sales compensation remains unchanged.

Like dealers and distributors, manufacturers also have suppliers, and their comments about their suppliers were similar to those expressed by dealers and distributors. They want their suppliers to keep more inventory, to reduce prices, and improve service. Any specifics on improving service? Shorten lead times, deliver on time, and improve product durability.

Some pointed to a market in transition, with large companies going out of business or dropping aftermarket programs.

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