by MAURA KELLER
The automotive industry continues to see increased growth and demand for parts and accessories (P&A), especially online.
According to Frost & Sullivan’s The Future of Parts and Service Retailing in Automotive Aftermarket (May 2015), online B2C sales of automotive parts and accessories alone are expected to become a $20 billion business by 2020 in North America and Europe – an estimated 9 to 10 percent penetration rate within overall aftermarket.
According to Sree Menon, head of parts and accessories at eBay Motors, the automotive e-commerce aftermarket industry continues to grow, especially as the average age of automobiles climbs beyond its current record of 11.4 years. Online purchasing continues to increase, particularly consumer demand for P&A and repairs and the DIY (Do-it-Yourself) and DIFM (Do-it-For-Me) segments, especially among younger buyers.
The way consumers shop for cars and parts continues to evolve,” Menon said. “Consumers want automotive purchases online to be as easy as buying a pair of shoes: convenience, free shipping, warranties, easy returns, peace-of-mind, and the expectation a part will fit. eBay is one of the only destinations that offers consumers a wide spectrum of new and used vehicle inventory, as well as parts and accessories, at a great value.”
In fact, parts and accessories have been a bright part in eBay’s business, thanks in part to its loyal motors enthusiasts and eBay’s continued focus on selection and technology, specifically Fitment, also known as “Parts Compatibility.”
“Our new Fitment capabilities have been a huge advantage for shoppers looking for P&A,” Menon said. “With Fitment, shoppers can easily see which parts are compatible with their vehicles as they browse the eBay Motors marketplace. It also reduces returns or wrong part purchases.”
For sellers, eBay’s investment in structured data penetration, which enhances buyers’ search and discoverability, has also enhanced the Motors experience on eBay.
Henry Scrampton, owner of Scrampton Family LTD, a used car parts company based in Pennsylvania, attributes the boom in online resale and retail of used car parts to the increase in trust levels about buying online.
“People are just plain more comfortable with the Internet and dealing with strangers,” Scrampton said. “It’s almost like Uber and those types of apps. Just like people are getting into cars and trusting strangers for rides, people are more comfortable buying parts from people they’ve never met online. It’s almost like the trust in sales begets more trust. There are some highly reputable online resellers and these are guys I’ve never met, but I’d trust buying or trading parts with them purely because of the reputation they’ve built up with the volume of sales and happy customers.”
Increasing Demand
All sorts of replacement parts and accessories are in demand on eBay Motors; some of their most popular parts and accessories sold in 2015 included everything from engines to wheels and tires to LED lights.
“Enthusiast buyers often know the brand and part they want,” Menon said. “They also want to find the best price, and they want to buy the specific part from a reputable dealer. If someone buys many parts from the same seller and they always get great delivery and service, this can lead their purchase a little away from price and more toward a trusted seller.”
What’s more, many purchasers of aftermarket parts online are DIYers, which can include a more novice DIYer or an advanced automotive enthusiast. DIYers purchase parts such as filters, glass and lighting products, and electrical parts that are generally less technical and easier to install. For DIFMers, purchases include more complex parts such as full engines and emissions components to exhaust systems. In fact, as of Q2 2016, a wheel or tire part was sold every 7 seconds.
“We also see shoppers investing in new automotive-tech accessories, without having to buy a new car,” Menon said. “These purchases include accessories that can be incorporated into a more cost efficient upgrade and could be anything from infotainment technologies and heads-up display systems to keyless entry mechanisms.”
Certification Matters
When it comes to purchasing used auto parts, people want to know that they’re buying the item that they need.
For instance, eBay’s Fitment program ensures confidence and shopping ease for our consumers when it comes to searching for compatible auto parts and accessories.
According to Menon, Fitment allows a seller to identify their items so that buyers can shop based on a specific vehicle to find the parts they need. For sellers, this results in more satisfied buyers because it’s easier for sellers’ parts to be found, leading to increased sales. Sellers can add all the years, makes, models, trims, and engines that their part fits (up to 1,000 or 3,000 combinations, depending on the category), which makes it easy for buyers to discover the right parts for their vehicle.
“We’ve always had to answer to Certified Auto Parts Association (CAPA),” Scrampton said. “They’re the number one thing you’ve got to look for when shopping for used auto parts. I repeat to everyone I know what they say, ‘If it isn’t CAPA certified, it isn’t a genuine replacement part.’ They’ve been around the longest and they’re definitely the foremost certification to look for.”
Scrampton is interested to see what CAPA does for the burgeoning electric/hybrid car market.
“They’ve done a good job on hybrids thus far with the Prius having been around since 1997,” Scrampton said. “But with regard to Tesla, CAPA might have some trouble with those parts since Tesla isn’t part of the traditional market and they’re constantly innovating. I’ve seen some government agencies built to deal with autos falter in dealing with change. And I think the certification process will definitely change with 3D printing.”
It’s important to note that a certification program that aims to help buyers purchase remanufactured products with like-new quality and warranty coverage was announced by Motor & Equipment Manufacturers Association (MERA), a remanufacturing association. With the program, companies can now certify that their remanufacturing processes meet quality management standards more generally associated with new manufacturing. This certification also allows all buyers to confidently identify and purchase remanufactured products. Cardone Industries, Inc., a remanufacturer of automotive parts, will be among the first companies to use the Manufactured Again certification seal on their product packaging.
As John Chalifoux, the president of MERA explained, MERA represents vehicle suppliers that manufacture and remanufacture components, technologies, and systems for use in passenger cars and heavy trucks. The organization serves as a critical bridge between high-tech capabilities in new vehicles such as autonomous vehicles and vehicle connectivity and the “nuts and bolts” of vehicle manufacturing.
“Remanufacturing has gained bipartisan support and simply makes sense as buyers can save money on high-quality parts while also being green,” Chalifoux said. “With all these pieces falling into place over the last couple of years, the future of remanufacturing is bright, to say the least. With the new certification program, buyers can now buy certified remanufactured parts with confidence. This is a critical milestone in the ability for remanufacturers to grow their businesses.”
Future Status
Industry experts believe consumers will continue to look for online experiences of purchasing used auto parts that are simple and easy.
“As the P&A industry online continues to evolve, shoppers and sellers can expect an even more simplified, enhanced online automotive experience,” Menon said. “eBay will continue to have more choice and competitive pricing, as well as the integration of service aggregators, which is currently limited. For sellers, the available technology will continue to become more efficient with buyer discoverability at the forefront. Additionally, the incorporation of more relevant content, community feedback such as reviews, and services in one destination as the consumer is browsing, will also be crucial. Mobile will also continue to be significant. This especially rings true with DIYers; as well as Millennial buyers.”
Scrampton stressed that car parts and cars themselves are some of the most frequently recycled parts in any industry. “Some might even tell you this industry is recession proof, and I’m someone who supports that statement,” Scrampton said. “If the economy is down and fewer people are buying new cars at dealerships, I’ll be doing good business reselling parts for more contemporary cars. If the economy is up and discretionary spending is through the roof, I’ll see a lot of sales for vintage autos and so on.”
Scrampton’s business has only ever grown, but Scrampton said it’s all about being responsive to trends.
“I like to pay close attention to behavioral trends. You know how everybody is doing Uber and those type of taxi apps? What kind of cars do you think people will be buying more of and getting more use out of? The Camrys, the Accords, those types of cars you see when using those apps,” Scrampton said. “Now, I know they’re very common cars, but I’ll look at how those cars are used, the specific years and models in use, and hedge against those parts being needed at some point.”
Scrampton says the used auto parts industry is always changing and will always adapt.
“People will always appreciate the design characteristics of a Jaguar E type, for instance, so there will always be a market for those parts,” Scrampton said. “With 3D printers, I think there will be more quality replacement parts on the market. CAPA will have to account for 3D printed parts in the future. I don’t know if they’re totally ready to deal with it, but it’s certainly something they have to consider. I know I’m looking into 3D printers and the capabilities they have for replicating auto parts. And remember, change is good. Look at the change that happened with online sales. Now I’m doing huge numbers online. Ten years ago, if you told me that would be the case, I would’ve called you crazy.”
Published in the December 2016 Edition of American Recycler News