Formalizing a High-Tech Aftermarket PresenceMon, 09/01/2014 - 10:37
Q: What has been DENSO’s strategy to develop its aftermarket business in Mexico?
A: Although DENSO historically has had a strong presence as an automotive parts manufacturer in Mexico, the decision to formalize our presence as an aftermarket supplier was driven mainly by the sheer evolution of the vehicle population in this country. DENSO is a global supplier to all major manufacturers in the world, so a large percentage of units in operation (UIOs) in the country already had our parts. However, this number has really increased in the last 15 years. The market had been evolving to include more and more light and heavy-duty UIOs with DENSO components, which established our aftermarket brand.
Q: How are you aiming to further consolidate your presence and expand your market share?
A: In looking at the most effective way to consolidate our presence, we established the importance of developing a strong distribution footprint for the Mexican market. Being a relatively new aftermarket brand in Mexico, we have the unique opportunity to build an aftermarket distribution network that provides us national coverage but is consciously selective in nature. The network is now growing as we seek to work with distributors who value the quality, technology, and future opportunities of our brand in this market. An important aspect of our strategy is to enter the market with as complete a product portfolio as possible. This means being able to provide a complete range of traditional maintenance products and repair components for both light and heavy duty vehicles, as well as specialized systems such as those for diesel vehicles and air conditioning systems for transit and interstate buses. DENSO differentiates itself as an automotive components and systems supplier that significantly invests in continuous R&D as this consistently improves the reliability and durability of our products.
Q: On what criteria have you been building up your distributor base?
A: Given that the vehicle population that requires DENSO products is present nationwide, we need to ensure that our distributor base can achieve national coverage. As we grow our distribution network, we have naturally achieved a presence in those areas that have the largest population f vehicles. However, we are continuing to look at important national distributors that can give us a broader presence. There are different profiles of UIOs in various regions of Mexico, and any aftermarket company entering Mexico really needs to understand these differences. For example, the border region is much like the US market. Therefore, products for that region need to have more of a US offering approach, while also including options for the traditional Mexican UIO.
Q: What trends are currently driving demand in the aftermarket segment?
A: The most important trend in terms of the demand for specific components is the increasing prevalence of new technology in both light and heavy-duty vehicles. That trend has caused a shift away from a traditional demand for lower technology products to a demand for higher technology components for increasingly complex cars and trucks. Although DENSO has excellent technology in regular maintenance products, like spark plugs and filters, we are particularly strong in the development and supply of repair components. These can provide the best service solutions for vehicles with systems that can only perform efficiently and reliably by having the best OE technology components, such as the ones that DENSO supplies.
Q: To what extent is DENSO innovating its business processes to stay ahead of the competition?
A: We have realized that increasing technology in the automotive industry has also led to increasing expectations being placed on suppliers. This holds true whether for a vehicle manufacturer or for a technician that has to provide the right service solution to the vehicle owner. Recognizing that, we are providing comprehensive technical training programs for the customer sales organizations and deeper technical training for technicians responsible for diagnosis and repair. We have to work with customers when we are dealing with complex equipment that requires a particular new application, as is the case for bus air conditioning systems. In such circumstances, we have to work with our customers to conduct detailed, specific application processes for the particular chassis and body of each type of vehicle, as well as conducting field testing to ensure the best fitting and performance of our products on the road.