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HDAW session puts the aftermarket big picture into sharper focus

March 5, 2016
Panelists take on everything from integration of vehicles to telematics to emissions requirements to consolidation of dealer groups

TO get a “360-degree view of the heavy-duty aftermarket,” Mike Delaney of WheelTime served as the session leader, asking questions of his own and of the audience to a panel that included: Mike Eppes, managing VP for parts for Rush Enterprises; Lee Long, director of fleet services for Southeast Freight Lines; John Minor of Midwest Wheel Companies; Javier Rodriguez of J&R Fleet Services LLC; Bill Ryan, CEO of Point Spring & Driveshaft Co; and Kyle Treadway of Kenworth Sales Company.

Q: I’m going to leave emissions out of this first segment. We’ve seen integration of the vehicles, increasing use of electronics and computers on board, and a variety of other things. Lee, of all the things we’ve seen in the past five years, what is it that is impacting you the most and in what ways?

Long: Emerging technologies in telematics and everything else. You’re talking about collision mitigation systems, the disc brakes on the units, the relationship between vertical integration that’s going on. It’s posed some issues that are resolved on the local level. Training of technicians is very important to us, and getting ahead of that curve is always something we strive to do.

Q: Of all the changes you’re dealing with, the positive and negative impacts, has it all been a good thing, is it neutral, or are there negative impacts?

Long: We’ve seen a lot of positive impacts. With collision mitigation systems, we’ve seen positive things come from it, and the safety of our drivers. Disc brakes … we’re getting in and looking at those. The system on collision mitigation allows the driver to be warned when he’s drowsy and goes out of the lane for whatever reason. The other thing we’re seeing is that the driver’s log on the truck is also able to see issues that arise to the truck that the driver doesn’t report to us. At the end of the day, we have a look at the online program that says, “This is what the problems are on that truck.” We’re able to do that in a more effective way. With drivers not reporting stuff to us, we’re able to go out and take care of a problem before it becomes an issue on the road.

Q: Javier, you’re an independent. As these components have become more computerized or integrated, how has that impacted you and how you do business?

Rodriguez: We work on pretty much every truck model, so we’ve got to have the technical knowledge to be able to serve all those vehicles across the spectrum. The real challenge we have is in terms of getting training. The difficulty is getting the cooperation from others in getting those tools. Just to give you an example: We wanted to get tools to work on PACCAR engines. It’s been two months, and we still don’t have it. I think a lot of times the dealerships of manufacturers see us as an independent. I guess the dealers would probably like to do all the work themselves, but that is not reality. I think it can be a really profitable relationship between independents and dealerships and manufacturers if they understand we’re not trying to do anything negative to them. We’re trying to provide service for the customer who chooses to come to us. But with the technology, in some cases, it’s difficult to get all of that.

Q: As you see OE-sponsored programs that are telematics-based, whether they are monitoring the engine or the whole vehicle, does that influence your vendor network and who you prefer to go to?

Long: We utilize those mom-and-pop places to do the work on our equipment because they turn it around quickly. No offense to dealerships, but it may sit there for a week before they get it in to look at it. So we feel it’s more beneficial to us to have that upfront where we can correct them and have that taken care of immediately, as opposed to having it sit out of service. Our trucks are not just trucks. They’re offices. They have computers, a satellite system, a driver’s log. That’s why it’s so important for us to have that office there for them to use.

Q: Let’s talk about emissions. I’ve heard people say we’re just getting started. I’ve heard people say the worst is behind us. I’ve heard people say they don’t know what the heck is going on, because we keep finding more and more implications. What’s the truth here?

Treadway: We’ve got another wave coming in 2017 and 2021 and we don’t even know what the technology pathway is going to be. That’s yet to be determined. On our end, where the rubber meets the road, so to speak, we’re just beginning. We have unknowns ahead of us and complexities ahead of us. Not to mention politics. It looks like that pathway is not going to be diverted, and we’re going to continue. Regardless of who is elected in the White House, EPA is going to continue to press this issue. We can still see more and more change, and it’s going to come at three- or four-year increments. Hopefully it’s not going to have the same volatility impact on markets that it has had over the last decade.

Rodriguez: I think that in some ways we’re a little ahead of the curve in that California started this whole requirement. But each time, it’s getting to be a higher percentage of the total invoice. I think we have come to a little bit of a learning curve as to how to do the appropriate repair, but it’s still a pretty expensive process.

Eppes: From the OE perspective and OE dealer perspective, the learning curve of the technologies that have happened have come such a long way over the last several years. Those things have gotten far better over the last few years. But I think we’re about to introduce additional complexity with aftermarket solutions into that same technology. It’ll be interesting to see how that plays out in terms of aftermarket solutions that are coming out. Are they certified? What do they do? How do they perform on a system that’s changed over time? That’s going to be another dynamic that will increase the complexity as we move forward.

Q: Do OEMs make the proprietary parts, tools, and software available to independents, and are they required to? Is there an issue or not an issue?

Rodriguez: I think there is an issue. I think quite frankly they are treading lightly, like, “I don’t really want to give it to you. I don’t really want to make it available to you, even if you pay for it. But I don’t want a whole bunch of backlash, so I’m going to make it difficult.”

Q: Given the increasing level of the number of ECMs on a vehicle, how does that impact you? You have customers coming to you and want the same turnaround time. What happens?

Rodriguez: That’s a real challenge to be able to get tools and software. When some dealerships understand the relationship, we get the tools and guidance and they get in turn that we buy parts from them. I think when they view that situation, it works OK, even though there are tools and the cost involved. It’s a significant issue but more so when you cannot get it at any price.

Q: Are you looking at fuels and better quality fuels as a way to handle emissions and fuel economy regulations?

Ryan: I think down the road there will be more alternative fuels, but right now we’re not changing course. One of the things you stop and think about is the DEF that’s going into these engines as well. That’s another added expense we get to talk about as well. I think down the road, you will see a change in that philosophy as well and then an alternative to that.

Eppes: From a Rush perspective, we have our own fuel system manufactured with fuel technologies and we continue to make those adjustments, and we continue to invest in our technicians and dealerships. Not so much because it’s a great buy at the moment but the fact is that the folks who have made those commitments with that technology are really staying with it, so we continue to support those trucks and those customers.

Q: As dealer groups consolidate and grow, which I think all of us agree is a current trend, do they feel more like an OE or an independent?

Eppes: I’d say a little of both. For us, we support OEs. We’re proud of the nameplates we support and are partnered with and want to continue to grow with them and make them healthy, and them to make us healthy at the same time. But everybody is looking for ways to grow their business. So for us, that’s where growth is possible. So we are going to continue to expand in non-nameplate markets as well. It’s a growth strategy.

Treadway: Dealers are watching what’s going on with the independent world. There’s a certain segment of the customer base that will never set foot within our doors because they have the perception we’re expensive and don’t have their best interests at heart. Dealers are well aware of that and watching that and are either taking lessons about having the right service and the agility with which you adapt to customer demands, or there are some dealers out there who are becoming independents. They’re buying independents out. ♦