Why do Automotive Markets Fail?
Plenty of research has looked at what makes companies successful, but what makes good Automotive Aftermarket Manufactures fail?
“Online research, It identifies 5 main points that bring about a change. They are:
1. Globalization: (Too Many Dealers)
- Causes other dealers to stop selling your product because of flooding of the market.
- Dealers will be competitive with each other rather then making money they sell it to beat out the competition (FAIL!)
- Dealers lose sales and don’t push the manufactures products as much. (manufacture notices loss in sales)
2. Regulation: (Selling to Retail Customers)
- Manufacture sells retail when they are only suppose to sell wholesale (lose dealers respect)
- Dealers lose money competing agenst manufacture(FAIL!)
3. Competition: (Loosing customers to competitors)
- Manufactures lose dealers because of no support and they go elsewhere
- Dealer moves from one manufacture to another to sell the product that will make the most money.
- Dealer leaves Manufacture because too many dealers selling the same product causes a flood in market which create loss in sales.
4. Technology: (Having Online Shops as Dealers)
- Having online only shops sell products kills the sales of the physical shops because of over head cost(Dealer stops selling your product)
- Online sellers tend to give product away because they have no overhead and everything is dropped shipped(FAIL!)
5. Customer Service:
- Manufactures tend to forget that when they first started to make more money that it was the dealers that were there in the beginning.
- Manufactures forget who brought them into a trend or scene all they care about is the fast money
- Manufactures tend to treat older customers with no respect and push them aside. FAIL!
- Dealers tend to be left out the loop so they turn to something else and this causes loss in manufactures which goes back to the top 4 of this list.
When any of these external contexts changes radically and the company is either unable or unwilling to change, it often results in failure.”
This makes the point that the Automotive aftermarket is declining. No company has ever managed to dominate for more than a few years, which is why we don’t worry about the Manufactures or Wholesale Distributors of the world. The market will take care of them in its own time, insuring that they do not get too powerful and eventually fail until these Manufacturers and Wholesale Distributors do something about how they do business.
10 responses so far ↓
Real talk!
The good guys gotta hang in there while hopefully the bad ones get weeded out
Great write up and so true.
Couldn’t have agreed more…
Very insightful knowledge being spoken here. Many issues must be addressed. However I feel it might be a little too late.
The above is true. This is what drives so many shops to the brink of frustration and eventual loss of interest in the industry as a whole. This also is the reason why “you’ll never get rich doing it honestly”. You gotta do it because you love it. Good write up. Author needs to use spell check though.
Every point above is very true to how it is right now. Manufacturers tend to forget who’ve helped them since the beginning and eventually lose the respect of dealers. It’s a sad thought that i don’t think will ever change sadly
Unfortunately, society is often too focused on the present and fails to recognize the consequences of decisions we make today. Too many people are constantly trying to increase profit margins unaware that sometimes they shoot themselves in the foot. Like VIPETE says, it’s too late. Globalization is now in full swing, it’s a sink or swim world now and business will become more and more cut throat as the years progress.
I dont think its too late. Thats why they got this thing called “Restructure” hahaha. I think if they wanted to open up shop they should of just did that instead of doing distribution or manufacturing. Alot of people complain about how retail sucks then why do they do it? If we were wholesale only thats all we would do. They need to motivate their dealers and get them to sell more to make them more money. Incentives or discounts or even just call backs to say “hey you guys doing all right? Not much sales, what can we do to help?” It is the now and if they want to be around longer I think they need to do something about it! CHANGE – OMABA. Hey we got a black president in the white house and I think this can be fixed, but it has to be done within their own. =)
Nice write up Fred
I believe most automotive aftermarket manufacturers fail because of poor management internally. It takes money to make money, products have life cycles, and I do agree that the majority of manufacturers for 90’s and newer aftermarket performance or restyling parts do not take care of their dealers. The product life cycles would last longer if the US legal system wasn’t so horribly slow, however from a consumers stand point this is a good thing short term, but not so much long term. This is still a very immature industry and probably always will be because car modifying goes through many trends and is very fast paced. It’s only a matter of time before a VIP Lexus with pulled fenders, negative camber, and low offset wheels is looked at as a Civic with a Black Widow body kit is now. What will be the next trend, the small installation shops, distributors, and ultimately the consumers will decide that. I prefer that it’s something we create on our own and not copy from another country… or at least compile on our own. Maybe the Civic w/ the Black Widow kit will cycle back in style, who knows. I think in Japan the gaudy Civic body kit style w/ 19’s was in after it was out here in the states. Good article BTW.