At TRW, we have always been in favour of the structured development of services and we provide our experience and expertise as active members of industry bodies and automotive organisations
This month we interview François Augnet, Vice President of TRW Automotive Aftermarket Europe and Asia Pacific, to explore why he believes the globalisation of service providers is beneficial to the automotive industry as a whole.
- How has the market changed in recent years?
- Why is the globalisation of service providers a growing trend?
- How is this beneficial to the automotive industry, as a whole?
- What does this mean for TRW?
How has the market changed in recent years?
Over the last few years, we have witnessed the globalisation of service providers, and the grouping together of companies and alliances between operatives, with the aim of offering ever more complete and more professional services.
At the same time, many service providers have undergone significant developments for example:
- TecCom, a B2B interaction platform for the independent European spare parts market;
- TecDoc, one of the main suppliers of electronic data on spare parts;
- Exponentia, an umbrella organisation for several major players in the component supply industry, which sets up advanced training for independent aftermarket companies;
- Datamonitor, Polk, Jato, and Gipa, - statistical data suppliers and data analysts.
Why is the globalisation of service providers a growing trend?
The increased complexity of the automotive industry, whether in terms of the market, the product, the technology or increased regulations, has given rise to a need for re-organisation and restructuring. Service providers, supported by a number of companies in the automotive sector, have taken responsibility for these roles, strengthened their strategic partnerships and increased market penetration.
Several factors have served to accelerate the development of service providers, resulting in some of them combining forces:
- The globalisation of the automotive industry;
- The greater complexity of legislation, regulations and processes;
- The increase in the number of spare part references;
- The complexity of vehicles and their repair;
- The need to reach a critical threshold.
How does the globalisation of service providers benefit the automotive industry, as a whole?
The development, grouping together and globalisation of service providers brings a number of benefits to the automotive industry as a whole, for component suppliers, groups, distributors and repairers in equal measure, resulting in:
- A higher level of standardisation, especially of tools, facilitates, parts identification etc.;
- A pooling of skills which leads to lower costs, especially for electronic catalogues and training;
- Greater efficiency and optimisation of processes, such as electronic invoicing, online order taking, etc.;
- The ability to alter operating systems to fit new markets.
- Speeds up the professionalism of the automotive industry, and the independent industry in particular which, when faced with an unfavourable economic situation, would struggle to move with the times through isolated, limited initiatives.
What does this mean for TRW?
Combining forces
At TRW, we have always been in favour of the structured development of services and we provide our experience and expertise as active members of industry bodies and automotive organisations, such as TecCom and TecDoc. The active membership and involvement of component suppliers in these organisations is already proving essential in providing parts to European purchasing and distribution groups. TRW has always led the way for example, as a founder member of Exponentia and we offer our support to any organisation with the potential to ensure the long term success of their clients throughout the world.
Global service with world-class standards
TRW sets standards in automotive safety and champions the need to improve legislation for the automotive industry. For example, we are working closely with CLEPA to promote new aftermarket safety standards. Our expertise and portfolio of affordable aftermarket safety products are well suited to help meet EU targets for improved road safety and environmental protection.
Service providers – the future is global
Our customers are rapidly becoming global players and through mergers and acquisitions are becoming stronger and more powerful. We are seeing businesses making strong, strategic partnerships across the entire industry and this trend continues through the aftermarket. More mergers will reduce the number of distributors and drive further geographical expansion. The trading groups are already operating on a global basis – and they will continue to get stronger and stronger. Customers are becoming more and more price conscious and expect higher levels of service. This will influence the available margin for each level of the spare parts distribution chain, which will drive players to seek efficiency through market concentration.
Customer first
With increasing market and customer consolidation, TRW’s ability to sustain and further develop our customer relationships is critical. Our customers are our priority. Their requirements are continuously evolving. We will continue to invest in our own organisation to ensure we are equipped with the knowledge and tools and are best placed to support the changing needs of our customers. For example, we are adopting a customer experience management model, whereby each individual customer group’s requirements are assessed in detail to better satisfy their needs and define the scope and scale of TRW’s support. To meet our customers’ needs, we have to understand our customers, their businesses and recognise that they will continue to change, develop and evolve. As we know, change is the only constant!