WARREN, Mich. — General Motors may have slumped on the sales charts for much of the 1990s. But with a revived product planning corps in place and a new attitude toward speed burgeoning, GM is turning an eye to expanding sales of its aftermarket parts and accessories — and to tuning into the minds and wallets of the crowd gathering at this week’s Specialty Equipment Marketers’ Association (SEMA).
GM’s accessory sales have expanded nearly 50 percent since GM Service and Parts Operations’ (SPO) Accessories team was formed in January 2001, according to GM North America vice president and SPO general manager, Doug Herberger. SPO’s overall portfolio has grown some 60 percent in the same period, Herberger added, “and we’re planning about the same rate of growth for 2003. Our ‘engineering factory’ is operating at full capacity with 600 to 700 projects underway right now.”
Why all this growth in a generally down economy? At a recent press conference at the GM Technical Center, Herberger spoke briefly of GM’s recent momentum in rebuilding market share, earnings and relationships (with suppliers, dealers and employees) and re-stocking the pipeline with innovative, appealing, high-quality “gotta have” cars and trucks.
Then he got to the point: SPO’s fast-building momentum in designing, making and marketing “gotta-have” accessories.
Before and after
Before the new accessories group was formed last year, SPO and divisional brand teams worked separately, with little or no coordination. Accessories were mostly in dealership parts departments, there was little training in how to sell them, and they were not part of the core new-vehicle business. At best, the new-vehicle customer might be given an accessory catalog on his way out the door.
Today, in stark contrast, SPO’s accessory teams work closely with both engineering and brand teams. Design, development and validation of accessories is fully integrated into GM’s Vehicle Development Process (VDP) to ensure best fit and function. And the parts and pieces have been pulled up front – out of the parts department -- to the point of sale.
“We work with the vehicle divisions to ensure that our accessories complement the design, functionality and market for specific cars and trucks,” SPO general director of GM Accessories Bob Triulzi said. On the engineering side, they work with Vehicle Line Executive teams to design, develop and validate accessories from the beginning of each new-vehicle program, and the accessories are thoroughly tested to meet rigorous GM standards for performance, durability and safety. On the retail side, they work closely with GM dealers.
Mounting holes for hardware and wiring for lights and other electrical items are provided as part of the vehicle build, installation is quicker, easier and less expensive, and the resulting fit and appearance is much improved compared to accessories designed independently.
Too, accessories training is now targeted at vehicle sales people, not just parts departments, and SPO provides dealers with Accessories Merchandizing Personalization Systems (AMPS), which allow customers to graphically add accessories to the vehicles they are purchasing to see how they will look. New car and truck catalogues prominently feature accessories along with the vehicles, GM Accessory brochures fit conveniently in gloveboxes for easy storage and reference, and there are dealer and consumer versions of a new GM Accessories magazine.
As a result of all this, SPO has realized substantial growth of accessories sold along with new vehicles at the time of purchase.
“Customization is one of the hottest trends in the automotive industry today,” Herberger said. “We need to continue working with dealers to get people thinking accessories at the time of purchase.” Of the roughly $27 billion annual U. S. retail accessory sales, only about 10 percent today come directly from new-car dealers -- a tremendous growth opportunity.
Hummer leads the way
The Hummer H2 is an early indication of the parts saturation GM has in mind for more of its vehicles. More than 40 accessories were designed and launched with the new Hummer H2, including a unique flexible roof rack system, two types of wrap-around brush grille guards, roof-mounted light racks and spot lamps, removable “U” steps, soft and hard roof-mounted cargo holders, protective taillamp guards, laminated body armor and even foldable Hummer brand bicycles. Sales of these items are running some 40 percent ahead of predictions.
Similarly, SPO has developed a variety of accessories for the new Pontiac Vibe, Chevrolet Avalanche and TrailBlazer and GMC Envoy as well as for “carryover” models such as Pontiac Grand Prix and Chevy Cavalier and Silverado. Customers can order accessories with their vehicles and finance their cost in their monthly payments. They are installed prior to delivery and covered by the regular new-vehicle warranty, usually three years/36,000 miles. When purchased “over the counter” and added later, GM dealer-installed items are covered by a 12-month/12,000-mile warranty.
The Accessories group’s other three lines – GM Vehicle Care, GM Performance Parts and GM Licensed Accessories -- are growing as well. Vehicle Care markets products for keeping peoples’ vehicles looking and running well; Performance Parts sells go-fast and look-fast parts for the fast-growing “tuner” and “late model” performance markets and for customers who race GM cars and trucks. There is a brand new line of racing parts for GM’s excellent new Ecotec small-car engine and a new supercharger kit for Chevy Cavalier and Pontiac Sunbird with the former 2.4-liter twin-cam four-cylinder. In addition to engine, chassis and body hop-up parts, this group claims about 60 percent of the market for complete high performance engines, known as “crate” engines. There also are Licensed accessories, predominantly restoration parts for historic cars and trucks, also a fast-growing business and hobby. This area currently catalogs about 20,000 part numbers, has some 200 licenses in effect with manufacturers of GM collector car parts and has seen 67 percent recent growth.
“Our mission is simple,” Triulzi said. “Sell more of what we have and develop more to sell.”