The extent to which each of the five brand types integrates with eCommerce will play a significant role in determining their success
Fort Wayne, Ind.—As the mix of vehicle nameplates and age groups changes and eCommerce generates a larger share of auto parts volume, product brands must adapt to new challenges and opportunities in the evolving light vehicle aftermarket.
The thousands of product brands active in today’s U.S. aftermarket can be grouped into five major categories. These five brand types range from OE (Original Equipment) Brands to four groups of aftermarket brands: Domestic Aftermarket Brands, Foreign Aftermarket Brands, Private Label Brands, and OE-Supplier Brands.
Each type of brand has unique product attributes and market patterns, according to a report by Lang Marketing. Here’s the breakdown of the types followed by their distinct challenges and opportunities.
Defining the Five Brand Types
Domestic Aftermarket Brands
Domestic companies market these brands, which are almost exclusively supplied to the aftermarket. Although most of these brands have broad application to foreign nameplates, this is generally not considered their strong suit, states Lang, since several other types of brands are often perceived as providing superior foreign nameplate coverage, product fit, and quality. Despite the category label, Domestic Aftermarket Brands can include products from overseas sources, particularly for foreign-nameplate coverage.
Foreign Aftermarket Brands
This group of brands represents products from foreign manufacturers (some with U.S. facilities) that usually supply only the aftermarket. While some of these brands can be used for domestic nameplates, many focus on providing exceptional coverage of foreign nameplates (sometimes limited to certain countries). Many Foreign Aftermarket Brands are perceived as offering high-quality products with an excellent fit, especially for specific foreign nameplates.
Private Label Brands
Private Labels are exclusively marketed by specific distributors and/or retailers. These brands are sometimes positioned as price-competitive, although some have evolved into “good, better, and best” offerings. Private Label products are sourced from both domestic and foreign manufacturers, which can vary by vehicle nameplate.
OE (Original Equipment) Supplier Brands
OE-Supplier Brands are products distributed to the aftermarket by companies that supply OE components to automakers. Many OE-Supplier Brands are strong in the foreign nameplate aftermarket, especially for the nameplates to which they supply OE parts. Many OE-Supplier Brands offer expanded aftermarket product coverage across a broad range of car and light truck nameplates, in addition to the nameplates for which they supply OE parts.
OE (Original Equipment) Brands
OE Brands supply aftermarket products that are usually identical to components used in the manufacture of new vehicles. End-users generally perceive them as superior in quality and fit compared to most other brands.OE Brand aftermarket products are intended to be sold almost exclusively by dealerships.
Challenges and Opportunities
The mix of vehicle nameplates on U.S. roads is changing dramatically. Foreign nameplates comprise a rapidly growing portion of cars and light trucks in operation. In addition, the vehicle age mix is evolving, with cars and light trucks aged 14 and older among the fastest-growing age segments.
Domestic Aftermarket Brands
Although Domestic Aftermarket Brands are among the most recognized by end-users, the expanding share of foreign nameplates in the aftermarket poses a challenge for them. Domestic Aftermarket Brands must strive to be perceived by installers as providing quality, fit, and performance equal to their competitors, especially for foreign nameplates.
Foreign Aftermarket Brands
Although recognized for their exceptional product quality, fit, and performance for foreign nameplates, Foreign Aftermarket Brands must expand their aftermarket distribution to provide product coverage for domestic nameplates, which still generate a significant portion of the aftermarket volume in many product categories, especially for older vehicles.
Private Label Brands
Private Labels are offered by some of the largest distributors and retailers in the aftermarket. Private Labels must work to increase their acceptance among installers by improving quality, fit, and performance, especially for foreign nameplates.
OE (Original Equipment) Supplier Brands
Although OE-Supplier Brands are often rated superior to aftermarket brands by installers for the vehicles on which they are OE components, these brands need to extend this perception to a broader range of vehicle applications. Similarly, OE-Supplier Brands would benefit from expanding the array of channels through which their products are distributed.
OE (Original Equipment) Brands
Although installers highly regard OE (Original Equipment) Brands for their quality, fit, and performance, their distribution is performed chiefly by dealerships. In many cases, dealerships do not provide the same level of parts delivery and customer service to installers as other distribution channels supplying aftermarket brands. In addition, OE Brands are often priced higher than other brands.
eCommerce Opportunities for Brands
eCommerce is generating a growing share of auto parts volume in the U.S. However, many platforms and e-sellers do not inventory auto parts and must rely on manufacturers, warehouses, and other auto parts distributors to fulfill their orders.
This fulfillment need provides excellent opportunities for certain types of brands and the manufacturers, warehouses, and other auto parts distributors who can supply them, especially Domestic Aftermarket Brands, Foreign Aftermarket Brands, and OE-Supplier Brands.
Private Labels and Original Equipment Brands are generally less suited to platform sales, but some types of e-sellers can successfully handle them. The extent to which each of the five brand types integrates with eCommerce sales will play a significant role in determining their success in the rapidly evolving aftermarket.
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