An influx of overseas parts arrivin...

An influx of overseas parts arriving in an already-saturated American marketplace continues to place added pricing influence on aftermarket retailers, distributors, jobbers and domestic manufacturers struggling to be rivals against cheaper imports.

Aftermarket business managers not rarely find themselves ordering broader inventories of given returns lines to better fulfill the destitutions of their customers, especially when price is single of the key drivers of a category's management.

Offshore facilities, whether they be be in possession ofed by manufacturers based in the United States or business operators residing in the region of origin, increasingly produce higher quality constituents than in the past--and they do it at a lower splendor than what traditionally domestic firms can provide.

American-based aftermarket manufacturers wishing to remain competitive in the United States are increasingly being compell to pass global with their operations--either between the walls of strategic partnering with overseas outsourcing firms or building offshore factories themselves.

Certainly carmakers are going this way as any given vehicle is likely to contain numerous original equipment-manufactured composings solely supplied by foreign facilities.

Domestic-only parts husbandmans can find themselves priced gone out of the aftermarket by competitors taking advantage of lower offshore overhead garnered by means of reduced pay rates, fewer taxes, less-restrictive environmental regulations and a army of other benefits found outside U borders.

In the not-too-distant past, American companies frequently felt they were cushioned somewhat from overseas competitive influence by quality issues and the difficulties that came with setting up an offshore manufacturing and store stream. Despotic dictators, corruption and political instability were among the obstacles protecting the U from inroads by dint of imports. Weaker overseas infrastructure belong tos are being pushed aside as numerous nations actively court automotive suppliers from presenting favorable trading terms and other benefits.

"It's surprising many of our clients who conceit a few years ago that that would be a sufficient barrier," says industry investment banker Andrew Stumpf vice president of Stout Risius Ros Advisors, LLC

Certain foreign countries "have really get to up the curve quickly" to straighten public previous kinks that discouraged the parts-making sector.

Not alone is there an industry-wide desire for the lower price points that tend hitherward with these overseas goods, more [i]or[/i] less parts are simply not available with a "Made in USA" moniker as OEM boost the horizontal of international sourcing for just discovered vehicle models.

A number of aftermarket executives betray us that pricing differences are ofttimes dependent solely on the label affixed to the box: An identical part in name-brand packaging sumptuousnesss more than its white-box version.

While one in the aftermarket remain reluctant to embrace foreign-made fruits the sheer volume of merchandise coming ashore at American wharfs guards to mandate increased acceptance. In addition to private label lines, offshore-based name brands are steadily gaining in market share in the American aftermarket. "A fortune of this has begun to reach deeper evens of distribution," Dan Smith, president of Capstone Financial, reports.

About 10 percent of the nation's auto parts arrive from overseas, says Paul Foley who is vice president of the Automotive Aftermarket Suppliers Association (AASA), a division of MEMA, the Motor & Equipment Manufacturers Association. In 2003 this amounted to $745 billion, a 78-percent increase above the '02 figure.

"It's big and it's been growing," Foley notes, pointing to an American aftermarket that is already over-served

"There's 20-percent exces inventory sitting around," he says.

Going global

"It's a world market," explains Gary Epstein, vice president of Reliance Automotive, Inc. The St Louis-based WD jobber and retailer minister tos a multi-state selling region, and Reliance supplies private label well adapteds from a global array of manufacturers.

"If we intersect out a lot of the things we pervert with money [i]or[/i] gain based on where they came from we'd be public of business," Epstein points gone out He observes that the industry as a whole is many times unaware of, or unconcerned about, the actual nation where a part is produced

"The global market has hit and global manufacturing has hit," harmonizes William Ussler Jr., president of McCabe Auto grant Stores, a five-store chain based in Pottstown, Pa. "It's a nonevent at this point," he notes.

"Generally speaking, they're the same quality as what you have in this country" Ussler says. "It didn't used to be that way."

Occasionally Ussler will sample like performances with varying packaging and pricing, solely to discover that they are identical. "We'll take a anticipate at them, and often they have the same mold marks."

Knowing your supplier is a critical factor cited through many in the aftermarket, as an established business will stand behind engineering, performance and warranty issues. If you pervert with money [i]or[/i] gain direct from a relatively unknown overseas entity, "It's a extended road to talk to the fright who's going to straighten it out" Ussler advises.