OEM and Aftermarket Duels: Woe to Foes
Friday, June 29th, 2007Back in the days before 1970, there was only one place for auto repair shops to acquire any and all of the repair replacement parts that they needed: from auto manufacturers themselves. These were the OEMs. This gave way to uneven market conditions, making the auto repair shops more and more reliant on the OEMs. Because there were no other possible source for replacement auto parts that the repair shops needed in growing numbers—since by this time, more and more people were finally financially able to purchase a car—one can very well imagine what eventually happened: a monopoly. And of course, since a monopoly of any kind never once made for an ideal situation, because it always places unfair advantage on one party often at the expense of the greater majority—lobbying for price adjustments became an iffy issue.
OEMs gained a good hammerlock on the industry. This placed the market directly into the hands of the OEMs. Some very happy OEM owners must have found themselves punching their fists in the air at that time, if they knew full what they had at that time. The arrangement gave the companies in question the wherewithal to set prices for their parts quite high in the queue. It came at a point that the prices were reaching mile-high but there was nothing to be done about it. The resulting circumstances gave full expression to the essence of capitalism: I have something you want. The only thing is, how much are you willing to pay for acquiring it? Or as the saying goes, a thing is worth only as much as one is willing to pay for it.
This continued until the arrival of the aftermarket part suppliers sometime in the year 1970. Finally, some new blood was pumped into the business. The aftermarket suppliers attracted immediate attention from several consumer markets. Soon, manufacturers independent of affiliations with auto manufacturers were springing up left and right in a considerable number of portions all over the world. Soon, competition was putting life back into the market that had remained stodgily dormant through the years.
Predictably enough, the OEMs weren’t too happy with the upstarts. But since each and every thing in the world changes—that ever constant notion of progress as a force that, by and far, proves itself unstoppable—all the OEMs could go on with was a gradual acceptance of the facts. This time, OEMs got a dose of their own medicine as they planned how best to proceed.
By the time the 1980s set in on the industry, independent suppliers were already generating parts designed to allow compatible performance with a number of vehicle models that were produced by all the auto manufacturers. From aftermarket performance parts to crash parts, these alternate providers gave the OEMs a run for their money. By offering quality aftermarket parts at a price that was a great deal more affordable, consumers who had their eye on saving a few dimes and nickels on the side were immediately hooked.
A reversal of fortune was forcing OEMs to implement major changes in their organizational structures. The relatively young aftermarket business was going off the ground faster than the established companies had predicted. The succes of the aftermarket providers though was due to more than mere mechanics. Aftermarket suppliers keyed in to the fact that consumers weren’t going to be too keen on payiung for parts at a price that’s a wee bit too rich fir their blood when there were other viable sources on the table. It was to this need that the aftermarket suppliers that made the aftermarkets industry into a strong and successful one.






