The objectives of this survey were four-fold:
- Understand the perception of genuine parts vs. independent aftermarket (IAM) parts
- Understand the parts selection process and major factors influencing the parts buying decision
- Understand OEM discount and direct repair programs (DRP) and their impact on the body shops’ parts buying behavior
- Assess how OEM and IAM parts suppliers are currently communicating with body shops
We need to know four things about the dealer collision wholesale parts business:
- It is very important to dealers and OEMs.
- Everybody knows that the aftermarket is generally regarded as the low cost spread.
- Insurance companies exert a huge amount of control on parts sourcing.
- Hands down, body shops prefer to use genuine parts.
The good news is that roughly 70% of shops indicated that they participate in at least one OEM discount program. The bad news is that the actual OEM-specific penetration rate is still fairly low. If you look at the chart “Participation in Discount Programs by OEM” you can see huge variability, across OEMs, in program participation. I only show GM because it was the clear leader in the survey … and I did not want to embarrass any of the others with bars not so tall.