Achieving Professionalization Through DiversificationFri, 09/01/2017 - 16:19
Many repair shops operating outside dealership networks are still reluctant to incorporate advanced equipment but Andreas Schmid, Director General of MAHLE Aftermarket México, says this could lead to a more professional industry.
“In small repair shops, oil changes are usually done manually,” says Schmid. “Not only is this inefficient but it also compromises the employee’s safety.” MAHLE detected a need for specialized fluid-exchange equipment in Mexico and although the company is mostly known in the aftermarket for its engine components, a new opportunity arose after the company’s acquisition of RTI Technologies in 2012. This company specialized in maintenance equipment for fluid exchange, nitrogen tire-inflation systems and air-conditioning services. MAHLE incorporated these machines into its portfolio and is now penetrating a previously unexplored market.
“Our first client is an Asian automaker and we are currently looking for other partners in the distribution and repairshop segment,” says Schmid. “It is still a green segment for MAHLE but we have detected that companies are now more willing to invest between US$5,000 and US$8,000 in professional equipment, resulting in better quality, cleaner and more efficient services for the client.” Thanks to RTI Technologies’ portfolio, which is now part of MAHLE’s new Service Solutions division, the company has also identified an opportunity to collaborate with tire maintenance and repair shops, especially because of the benefits nitrogen can offer to clients in Mexico.
Service Solutions is still a growing segment in Mexico but the company has positive expectations for its development. Schmid says repair shops must understand that this new offering presents further opportunity for professionalization. “Incorporating advanced technology can help repair shops become a one-stop solution for clients,” he says. Outside the OEM shop segment, service points are normally specialized either on engine or tire maintenance, which means clients are forced to find several shops that can offer a complete service for their vehicles. “Diversification can help tire maintenance shops become full-service points, creating customer satisfaction by delivering timely services.”
Schmid will not wait for Service Solutions to take off to grow the company’s position in Mexico, however. As one of the leading suppliers in the original-equipment segment, MAHLE can translate its innovation efforts to the aftermarket in its engine component, filter and peripherals and coolant divisions. The challenge the company faces is that it is not always easy to convince the client about the advantages new products can bring, an obstacle Schmid will also have to overcome while marketing the company’s Service Solutions line. “Particularly with the final users in repair shops, we need to make sure they understand how the new technology works, not only the moment we show it to them but afterward, when they are planning their next purchase,” he says.
Looking to remain competitive amid economic uncertainty spurred by a weak peso, the company has implemented specific strategies to combat exchange-rate fluctuations. “Many of our products have suffered, either because they are imported or because the raw materials are priced in dollars,” says Schmid. MAHLE is negotiating with its suppliers to establish better costs for raw materials without impacting the final quality of its products. At the same time, Schmid has made sure to understand the requirements of the aftermarket, which in most cases are not as strict as those in the originalequipment segment. Other companies such as Schunk Electro Carbón have also identified the difference between original equipment and aftermarket standards as a potential opportunity to reduce costs. “Standards are different in the aftermarket, so companies cannot justify the investment in manufacturing components with the same materials as original equipment,” says Daniel Romero, Americas Automotive Division Manager of Schunk Electro Carbón.
Schmid says MAHLE can “meet industry standards without incurring in added expenses that could potentially affect our clients.” He also highlights the importance of keeping an adequate balance between cost-reduction strategies and the incorporation of new trends and technologies in the development of new products. “We are incorporating new materials in our product-development process, with the goal of achieving better performance at a lower cost,” he says.