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Value of the Automotive Aftermarket

OEM, OES, P&A, IAM are all acronyms that are bandied about when discussing the automotive parts market, and they need to be understood when deciding where they fit into the giant jigsaw puzzle of parts supply.

It is the common belief that OES (Original Equipment Supplier) parts have to be purchased directly from the franchise dealer. OES parts are manufactured on the same assembly lines of the component manufacturers as the OEM (Original Equipment Manufacturer) parts that they manufacture for the OE assemblers, except it goes through a couple of added cosmetic steps, such as branding of the part or stamping with the manufacturer’s logo, and then it gets packaged in an OEM box. This entails a small extra cost, but more expensive to the consumer because of middlemen taking a significant cut.

It is also the common belief that the IAM (Independent Automotive Aftermarket) consists of manufacturers and retailers of aftermarket parts that are copies of the OEM part, and that these parts are made to be a more economically feasible replacement parts than an OEM part.

This is true in the lower segment of the market, but the reality is that quality branded aftermarket parts are in most cases manufactured by the very same manufacturers who are supplying the OEM and OES markets, and these parts are manufactured on the very same assembly lines. But this is just half the story.

Because of the specifications that have to be adhered to by the component manufacturers when manufacturing OEM and OES parts, it is becoming increasingly more common for aftermarket manufacturers to take OEM parts to the next level of quality. They basically take an OEM part and reverse engineer the part and then recreate a replacement part that is of a higher quality. And the really good news is that these products are usually supplied at a price equivalent to an OES part, and in many cases even at a lower price, whilst carrying an even better warranty.

These aftermarket manufacturers play a significant role in the mobility and safety of motorists, a role that has been vastly underestimated and grossly underappreciated, according to Giel Steyn, South Africa’s guru on quality and standards in the automotive industry. To truly appreciate this point of view, we need to have a good look at the South African car parc, by age.

When driving on the highways and byways one tends to notice the latest and greatest vehicles, giving admiring looks at the gleaming SUV, or that sleek sports car. And wow, did you see that amazing roadster? But take a closer look, and you will see that the majority of cars sharing the road with you are older vehicles. South Africa’s car parc is in actual fact quite old, with more than half of the cars on the road over seven years of age, and over a third 13 years and older! These are the cars that rely on the automotive aftermarket manufacturers, and their extensive supply chain, to keep them in a roadworthy and safe condition.