Aftermarket Parts: What's Your Perception?

The Quality and Preference Gap Is Closing Between OE and Aftermarket Parts

Aftermarket Business

Among Web forums and blogs it’s fairly common for someone to say, “Never trust aftermarket auto parts. Always go to the dealer.” These comments might come from anyone from an automotive enthusiast to a stay-at-home mom. But what can you say? There’s a lot of misinformation floating around online.

As the world goes more and more digital, it’s easy for misconceptions like these to spread. But what this means to the aftermarket is that it is more important than ever to distinguish between perception and reality. So how do aftermarket parts fare compared to OE? What are the differences? And is what you see when you look at the aftermarket the same image that is reflected in the eyes of the customer?

Of course, many manufacturers supply both OE and aftermarket channels. In those cases, most products are virtually the same. There may be some OE product technologies and innovations protected by patents, but even then the aftermarket alternatives are still engineered to the same quality of form, fit and function.

“Our OE is all on the commercial side — trucks, trailers, recreational vehicles — and we’re in the aftermarket for light automotive, but I can tell you that we follow the same standards, the same quality requirements for both,” says Richard Moss, national account manager for Gabriel. “The difference is that for the OE, you are making a lot of one part number, making it every day, with a forecast on exactly how many you need. In the aftermarket, you have to make literally thousands of different parts, with increasing complexity for every vehicle on the road.

“It’s a much more complex business model and you have to be a lot more flexible in your production facilities to get the job done right every time,” he adds.

For those manufacturers working on both the OE and aftermarket sides, this dual-market platform brings additional advantages. Back in the 1960s and 70s, auto manufacturers did their parts engineering in-house, so it could be said they truly knew what were the right parts for their vehicles. Now, it is companies like those in the aftermarket that have taken on much of the research and development in the auto industry, explaining why OEMs increasingly rely on their suppliers’ expertise in developing their latest vehicles.

“Working with the OEMs, you tend to get pushed to innovate even more,” says Duane Pekar, director of marketing and brand leader for Autolite. “For instance, with a new engine design, you are working together from the very first design phases, and you can help them design their engine to work with your product for optimal performance. And then in the aftermarket, you can take your expertise and innovations and bring that technology to market and give all consumers access to your products.”

Pekar also explains that the aftermarket company might make their products slightly different when working for the OEMs. “Working on the OE side, the components are all designed based on their image,” Pekar says. “With filters, for example, some engine manufacturers want long life. Others want you to design for greater protection, and you may compromise on lifespan a bit. In the aftermarket, you have the ability to define your brand yourself, and engineer to your own specifications.”

Safe Choice or Best Choice?

For aftermarket-only manufacturers, products generally are reverse-engineered from the OE part rather than engineered from scratch. This process includes obtaining multiple OE product samples, technical drawings and material specifications in order to produce an aftermarket version of the OE part.

Steve Handschuh, president of the Automotive Aftermarket Suppliers Association, notes that in a recent focus group, participants said aftermarket part quality has vastly improved over the past 10 years. Gone are the days when aftermarket parts didn’t even resemble their OE counterparts, taking on strange shapes that left technicians scratching their heads when faced with installing them. However, even now, not all aftermarket parts are created equal.

“Globally some manufacturers may only reverse-engineer fit and/or form,” Handschuh says. “These products may look the same and fit properly in the application but fall short on performance. While generally priced significantly less than OE or OE-quality products, some argue that these ‘value line’ products do not deliver value at all.”

“Certainly there are some sub-standard parts in the aftermarket,” says Kenneth Brom, director of Starting & Charging Systems, Robert Bosch LLC. “Ultimately, quality speaks for itself. We believe it is good business practice both in the short- and long-term to provide the best possible product at the most competitive price.”

The OE side gets an advantage due to its consistency and precise application. Whereas aftermarket products can be high-quality products with little or no difference from the OE part, from brand-name manufacturers, down to low quality, knock-off products in non-branded packaging, which frequently are quite inferior to the OE part.

These bad apples on the low-end of the spectrum could tarnish the reputation of the entire aftermarket. But those manufacturers that can legitimately substantiate claims of fit, form and function can level the playing field with OE parts. Or in many cases, elevate it. “Aftermarket products exceed OE in one or more product attributes in some cases,” Handschuh says. “For example, OE parts production may be constrained due to weight, costs or proprietary innovation. Since the aftermarket is not constrained in these ways, manufacturers may produce a superior product with respect to performance, durability or ‘green-ness’ when compared to the OE product.”

Pekar agrees, saying the OE part is the part the car was built with — not the latest part. “The aftermarket has the opportunity to take the latest technology and offer it in a retroactive way to every car in the car parc,” Pekar says. “The safe choice is the OE part, but it’s not always the best choice.”

The aftermarket also offers the opportunity for greater customization.

“Our challenge and opportunity in the aftermarket is that different vehicles have different uses,” says Moss. “In the ride control business, you have customers doing their everyday driving on paved roads, and you have landscapers or other heavy-duty users taking their trucks off-road. You have to be able to adapt to both. Although we do design our products to meet or exceed OE specifications, we also design for specific uses to meet our customers’ needs.”

“At Moog, we learn from the OEs,” says Kim Plante, product manager, chassis for Federal-Mogul. “When there is a problem in the market, we are able to design parts that solve the problem. Our parts are engineered to out-warrant, out-perform and outlast OE parts.”

Real Value

In actuality, the end user typically doesn’t decide between OE and aftermarket parts. Consumers rely on their repair shops to make the best decision for their vehicles. This leaves techs to decide between cost and quality.

“Installers are always looking to use the highest quality parts, and as a whole, installers typically rank OE parts as the highest in quality,” says Mary-Beth Kellenberger, senior consulting analyst for Frost & Sullivan North American Automotive, referencing “Frost & Sullivan Speaks Candidly with U.S. Automotive Shop Owners,” the firm’s recent report. “Having said that, many of them use aftermarket parts because of price and availability through aftermarket distributors. They simply can’t be going to an OE for every part, every day.”

For repair shops, experience with a brand dictates what they’ll buy in the future. While they may rely on a few key aftermarket suppliers for the bulk of their purchases, they will go to the OE for specific vehicle models or parts they’ve had problems with in the past, Kellenberger explains. “Issues with specific parts or brands can spread like wildfire now because of sites such as Identifix and other installer Web sites,” Kellenberger adds. “The issues are becoming far more evident faster than ever because of these installer information exchange sites.”

Dan DeCaro of CarSmart Auto Service, in St. Louis, says that with high-tech pieces like computer sensors, he’ll continue to rely on dealer direct parts. “But in most cases, the aftermarket part can be just as good if not better than the OE,” he says. “And especially with our customers looking to save money in this economy, you can negotiate better pricing in the aftermarket.”

Pam Oakes, owner of Pam’s Motor City Automotive, in Fort Myers, Fla., says that before she uses a new brand for a customer, she’ll try it out on her own car. “What I put in my customers’ cars, it’s quality or nothing,” Oakes says. “To the customer, these parts are a reflection on us. My only disappointment is that parts now are being so cheaply made across the board. It’s all about cutting costs: How thin can we make the steel, how cheaply can we make the part?”

A bad experience at an independent repair shop due to a faulty part will shake a consumer’s confidence in independent shops as a reliable place for automotive service — and drive them back to the OE dealer as the only reliable source for service.

Because of the struggles of the auto manufacturers, which has ricocheted down the line to their suppliers, there is abundant opportunity for the aftermarket to prosper. Suppliers have cut their production, making OE parts availability a question mark.

In the end, technicians will use what their experience tells them, and what value they can provide to the customers. “If the OE brands were really considered the best by the public and professional installers, they would have the largest percentage of sales, which they do not. The vast majority of the market is with aftermarket products,” says SOMS COO Steve Kirchner. “And secondly, all of these parts are being made by the same companies, they are not being made by the OEs.”

“Our challenge in the aftermarket is to maintain a level of quality, level of performance, level of coverage, level of service to the end user,” says Bob Nossal of Gabriel. “It’s not about developing perceived value, but offering real value.”