As far as TRW is concerned, we are still in a strong position. The aftermarket business made a profit in 2008 and our strong position across Europe still leaves us room to grow – despite the economic slowdown.
“During the second half of 2009, we will see a return to normality. Repair and maintenance needs can no longer be put off having seen the extension of service intervals from mid 2008. We will also see manufacturer networks look to increase their market share in service and repair, with a particular focus on customer loyalty.” Francois Augnet, Vice President TRW Automotive Aftermarket, Europe – May 2009
Further to Francois Augnet’s predictions, we spoke to Jochen Leuthold, TRW’s General Manager Sales & Distribution and International Key Account Director, to understand his opinion of market conditions……….
"There is no doubt that the first half of 2009 was difficult – not only for consumers, with drivers only carrying out the most essential maintenance and repair work, but also for our customers, the distributors.
As far as TRW is concerned, we are still in a strong position. The aftermarket business made a profit in 2008 and our strong position across Europe still leaves us room to grow – despite the economic slowdown. The TRW offer means we have a hold – but not a monopoly – so we can play to our strengths, as the market isn’t saturated.
Because TRW’s core products are safety critical – braking and steering and suspension – parts that are covered by the MOT test in every country, even during a slow-down there is still a demand. Now, in the second half of the year with drivers not able to put off essential maintenance any longer, those parts are in much greater demand than comfort, non essential items.
We also have access to a huge car parc. The life we lead today involves travel – to work, with our families – travel and therefore car usage is a big part of who we are in 2009. Although the cost of fuel has an impact on the amount of miles we drive, we still do drive.
The Vehicle Manufacturer (VM) networks will increase activities, I am certain. But at the end of the day, general stimulation of the market is good for everyone. Stimulation of the OE business and vehicle manufacturer market will drive the market and eventually filter through to the independent aftermarket."
It’s simply a question of planning….
1. How does TRW maintain stock availability, and how is the business working with customers to ensure they can hold the correct stock in the right amounts during this difficult time?
……It comes down to sensible planning and forecasting and increased communication
Making sure we have the correct stock, in the correct amounts – is of prime importance to us. But, once again we are in a fortunate position. We are now truly reaping the rewards of decisions taken some years ago – leaving us in a favorable position to serve our customers.
We make clever use market intelligence – both internally and externally and have seriously worked on improving our communication.
We own - and therefore have control of – many of our own aftermarket manufacturing sites. This means we are not reliant on others for stock.
We have extremely close contact with our customers; this means we can sensibly forecast required amounts of stock. Our philosophy is to put the customer at the very heart of our business – and because we understand their requirements, we will meet their needs.
We are moving ever closer to a culture of complete automated ordering. We are working hard to obtain data from the market and from our distributors to enable us to continuously improve the quality of our processes.
2. How can TRW work WITH the government initiatives being put in place to improve new car sales?
First of all let me reiterate my earlier statement that general stimulation of the OE and vehicle manufacturer markets – will be good for everyone.
Before the aftermarket begins to worry that an influx of new cars into the European car parc may be detrimental to aftermarket sales and repair, we must take a step back. There are two points to consider here – the first is that we don’t yet know what segment of the market this will most affect. It is true that vehicles in the region of 10 years old are a prime market for us, but we must not forget that there are many, many vehicles on the roads which are much older than this – which are not a target market for us.
The aftermarket must also realize that there are opportunities for expanding into different product groups…and once again, it comes back to planning. And of course there are big opportunities in the developing markets.
3. What impact has the economic downturn had so far on TRW's relationships with the Buying Groups?
Buying Groups are no different to any other sensible business – they also want to form strategic, working partnerships with strong, stable companies. Across Europe things are changing – Buying Groups have traditionally had numerous nominated suppliers – now they want to have a smaller number of quality partners. Once again it comes back to forming trusting, lasting working relationships.
4. What new requirements do the Buying Groups have and how has TRW been able to address them?
Where the Buying Groups have got the upper hand is in stipulating what they want from a partner. They want strong, secure partners with OE quality product, a good range, working knowledge of new technologies, materials and manufacturing processes – as well as complementary garage concept support and products. But of course, this is all good news for TRW as the above encapsulates our offer.
We no longer need to worry so much about cheaper competition with a weaker offer.
And again, this brings me back to the fact that our business is ‘customer centric’. As Francois Augnet said: “To meet the needs of the customer is to understand them.”
For the past few years, we have been putting in place processes to allow us to get closer to our customer in order to better serve his needs.
We have also been working hard to increase efficiency – moving more towards a fully automated way of working with our stock, orders, invoicing etc. Being a major shareholder in TecCom, has allowed us to drive this forward.
We know that with cars becoming more and more complex, it is getting harder for the customer to identify the part they need – so have been investing heavily in improving our catalogue data and working more closely with Tecdoc. If we are clearer in our documentation, it allows the customer to be more precise and to avoid him ordering three or four parts to find the one that fits.
With the opening of our state of the art warehouse in Überherrn, Germany, we have dramatically improved the logistics of the business
And last, but certainly not least – the streamlined processes we have implemented – such as the whole company working with the same IT, finance and business information packages, are now proving their weight in gold. Having global access to information saves time and increases efficiency. As I said, it all comes full circle….and success is down to sensible planning………