Thursday, 21 July 2005 22:25
Spare Part Sales to Unauthorized Services Makes Authorized Services Happy
Over seven millions of motor vehicles are in operative state in Turkey. For maintenance and repairment of those vehicles, an amount over three billion USD for spare parts is spent. This spare part market attracts many entrepreneurs due to its large volume.
According to researches, the vehicles usually stop visiting the authorized dealers after the expiry date of warranty period and start to visit private services and repair-shops since:
According to researches, the vehicles usually stop visiting the authorized dealers after the expiry date of warranty period and start to visit private services and repair-shops since:
1.) Less repairment and labour costs are paid within private services and repair-shops,
2.) Private services and repair-shops and spare part suppliers around them can supply cheaper alternative spare parts,
3.) There are too much red tape in authorized services and those formalities take too much time. It is nearly impossible to have direct contact the mechanic/serviceman or the owner of the service or repair-shop.
4.) Maintenance and repairment are performed in shorter time in private services and repair-shops,
5.) Private services and repair-shops are more successful in troubleshooting and repairment performances. The first owners of the vehicles usually change their vehicles after expiry of warranty period. Most of the vehicles, which are sold as second-hand, are usually taken to little cities from larger cities. Those, who buy the vehicles as second-hand, third-hand, think that spare part and labour costs of authorized services are too expensive. For this reason, they prefer private services and repair-shops without trying authorized services in case of a requirement. As the vehicles gets older, for example after its tenth age, drivers take their vehicles to services for maintenance less frequently. Nevertheless, more defects and malfunctions appear when the vehicle gets older. And the cost of repairments shall be much more higher. Drivers prefer alternative products instead of genuine parts in order to reduce repairment costs. As a result of this, spare part revenues of vehicle manufacturers, distributors and authorized dealers are influenced negatively.
Companies, which aim to eliminate such negative conditions to increase spare part sales volumes, launch some compaigns including discount for spare part and labour fees in order to bring the vehicles, whose warranty period are over, to authorized services and sell more spare parts to unauthorized services or repair-shops for the vehicles, which do not visit authorized services and prefer private services and repair-shops, in order to expand their market shares and sales volumes. An example for the strategy stated above is Direct Distribution System (DDS) which we have been currently implementing within Temsa:
We support and encourage our authorized services to sell spare parts to the private services and repair-shops, sub-customers as we call, for the last one year. We also give bonus to the owners of authorized dealers and their staff in the field on the basis of both their sales volume performance and each new customer.
In addition to this, we deliver the orders of our authorized dealers, which are received by private services and repair-shops, to the private services and repair-shops in the same day by DDS free of charge.
Thus, both authorized services and private services and repair-shops shall be able to suppy Temsa originated genuine parts in very short time without raising their stock levels and also provide rapid service to their customers without employing capital to stock. Temsa, in the meantime, shall not only increase its market share and profit by supplying spare parts to the old vehicles, which do not visit to its authotized services, but also customer satisfaction.
2.) Private services and repair-shops and spare part suppliers around them can supply cheaper alternative spare parts,
3.) There are too much red tape in authorized services and those formalities take too much time. It is nearly impossible to have direct contact the mechanic/serviceman or the owner of the service or repair-shop.
4.) Maintenance and repairment are performed in shorter time in private services and repair-shops,
5.) Private services and repair-shops are more successful in troubleshooting and repairment performances. The first owners of the vehicles usually change their vehicles after expiry of warranty period. Most of the vehicles, which are sold as second-hand, are usually taken to little cities from larger cities. Those, who buy the vehicles as second-hand, third-hand, think that spare part and labour costs of authorized services are too expensive. For this reason, they prefer private services and repair-shops without trying authorized services in case of a requirement. As the vehicles gets older, for example after its tenth age, drivers take their vehicles to services for maintenance less frequently. Nevertheless, more defects and malfunctions appear when the vehicle gets older. And the cost of repairments shall be much more higher. Drivers prefer alternative products instead of genuine parts in order to reduce repairment costs. As a result of this, spare part revenues of vehicle manufacturers, distributors and authorized dealers are influenced negatively.
Companies, which aim to eliminate such negative conditions to increase spare part sales volumes, launch some compaigns including discount for spare part and labour fees in order to bring the vehicles, whose warranty period are over, to authorized services and sell more spare parts to unauthorized services or repair-shops for the vehicles, which do not visit authorized services and prefer private services and repair-shops, in order to expand their market shares and sales volumes. An example for the strategy stated above is Direct Distribution System (DDS) which we have been currently implementing within Temsa:
We support and encourage our authorized services to sell spare parts to the private services and repair-shops, sub-customers as we call, for the last one year. We also give bonus to the owners of authorized dealers and their staff in the field on the basis of both their sales volume performance and each new customer.
In addition to this, we deliver the orders of our authorized dealers, which are received by private services and repair-shops, to the private services and repair-shops in the same day by DDS free of charge.
Thus, both authorized services and private services and repair-shops shall be able to suppy Temsa originated genuine parts in very short time without raising their stock levels and also provide rapid service to their customers without employing capital to stock. Temsa, in the meantime, shall not only increase its market share and profit by supplying spare parts to the old vehicles, which do not visit to its authotized services, but also customer satisfaction.
Direct Distribution System, accepted both by authorized services and also over two hundred private services and repair-shops, seems easily applicable for other vehicle manufacturers and distributors.
