Bright Spots

Stalled Auto Market a Boon for Parts, Repair

Consumers Spend to Maintain Cars Instead of Buying New Ones

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DETROIT ( -- The bad news: Americans aren't buying many cars these days. The good news: They are keeping the ones they do own longer, and spending more on their upkeep.

According to researcher R.L. Polk & Co., the median age of passenger cars hit a record last year of 9.4 years, breaking the prior high of 9.2 years in 2007 and 2006. The median age for all trucks jumped to 7.6 years from 7.3 years in 2007.

That's a boon for marketers who sell mufflers, brakes and motor oil.

"Consumers are hanging onto their cars longer and doing the required maintenance to make sure they last longer," said a spokesman for AutoZone, which reported its best quarter in five years last week, with same-store sales jumping 6% for the 12 weeks ended Feb. 14.

The retailer saw all categories of maintenance parts, including motor oil, oil filters, wiper blades, spark plugs, belts and hoses, increase in the prior quarter, he said. AutoZone offers free services such as its Loan-A-Tool borrowing program and its year-old, in-store kiosks that let customers study parts options, along with how to perform jobs themselves.

Consistent messaging
Lisa Kranc, senior VP-marketing for the chain, said AutoZone ads from Sponge, Chicago, have remained disciplined by keeping the "Get in the Zone" tag consistent for seven years and by letting consumers know the retailer is there to help them. Radio spots "speak loudly to value," Ms. Kranc said.

Anthony Cristello, senior VP and analyst at BB&T Capital Markets, said repair chain Monro Muffler Brake and retailer Advance Auto Parts also posted good results for the fourth quarter of 2008.

An exception was Midas, he said, partly because that repair chain doesn't own its outlets, so it takes longer for franchisees to adopt new company policies. By Midas' admission, it also did not position its services right in the weakening economy.

When Chairman-CEO Alan Feldman reported the company's third-quarter results (the most recent available at press time) late last year, he said the chain had "been promoting brand awareness and quality services, while our competitors have been promoting extreme value." The strategy wasn't right for the times, so same-store sales declined in every U.S. region. "We are revamping our marketing plans to promote value on a local level," he said.

Last week, Midas broke a value-oriented ad campaign on radio offering special deals. Actor Martin Sheen narrates the ads, created by freelancers Matt McCutchin and Gary Alfredson with the brand's local agency, Moroch Marketing, Dallas.

Reaching beyond enthusiasts
Royal Dutch-Shell Group's Quaker State motor oil also changed strategies. The brand's ads had been aimed at auto enthusiasts and focused on performance, with the tag "Unleash all your horses."

But the company did online research with a couple of thousand consumers and found they were seeking value and ways to insure a vehicle "can run as good as it can as long as it can," said Troy Chapman, marketing manager.

Quaker State is now targeting a broader audience with a value and engine-durability repositioning, said Chris Hayek, global brand manager. A multimedia blitz from Doner, Southfield, Mich., broke a few weeks ago. Quaker State is also running a contest asking consumers to submit short videos to showing why they have the world's worst commute, said Rob Strasberg, chief creative officer at Doner.

Shell doesn't break out sales for its motor-oil business. But David Portalatink, director-industry analysis at NPD Group's automotive-aftermarket arm, said motor-oil marketers enjoyed an 8% jump in U.S. sales at auto-parts stores in 2008 vs. 2007. NPD tracks sales monthly at 18,000 auto-parts stores.

Goodyear Tire & Rubber Co. reported last month that it sold fewer tires in 2008. "The consumer tire business is down overall," a spokesman said; automakers bought fewer original tires as they slashed production.

The company's North American tire business posted a $156 million loss last year vs. income of $139 million in 2007. To boost U.S. sales, the marketer will start to focus its efforts on new, mid-price tires this spring to tap into the most popular price segment, the spokesman said, with ads from McCann Erickson, New York.

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