Keystone News

New Industry Market Trends Prove to Be Game Changers for Fleet

Change is often as unpredictable as it is inevitable. Business models either adapt to emerging market trends and consumer demand or become crippled by stagnant business practices. Leaders across the professional fleet market segment have found successful ways to navigate the challenges of an ever- evolving commercial industry that is heavily influenced by a variety of dynamic factors, from pioneering vehicle platforms, remarkable technological advancements and innovative aftermarket potential to more intangible variables, such as fluctuating fuel costs, uncertain economic stability and broadening emissions regulations.

Yet commercial industry innovators, such as OEM and aftermarket manufacturers, continue to advance the automotive sector. Why? Because they embrace change, evolve and grow with the market, continuously reinventing themselves, thus achieving sustainable growth through effective R&D, strategic planning, proper forecasting and appropriate diversification.

Eric Fairchild, Director of Northeast Sales and US Customer Support, is a veteran Keystone employee for nearly two decades. He’s seen the professional fleet market segment evolve masterfully throughout the years, always finding innovative ways to remain relevant even during challenging economic times. New commercial vehicle models have given the industry a facelift, making both form and function important factors in the decision-making process for end users. “The industry continues to be resilient while diversifying. The ability of our customer base and the manufacturers to react to trends efficiently is somewhat remarkable and really is the core of why they stay relevant,” said Fairchild. Aftermarket manufacturers and distributors like Keystone have a significant role to play in the growth of the commercial industry.

As the leading and largest wholesale distributor of specialty automotive parts in North America, Keystone is well versed in the opportunities that change provides. Its business strategy has flexed over the years to embrace change where change brought growth, including logistics expansion, brand and inventory diversification, as well as market segment specialization.

Keystone category management and sales leadership recently teamed up with WEATHER GUARD® and some valued customers to educate retailers and restylers about the current state of commercial business, emerging market trends in the industry, new and improved vehicle platforms and the significant aftermarket potential for professional upfitters. The takeaway? It’s a growing and changing segment, so don’t leave any money on the table!

State of the Business

Business continues to grow, as US auto sales remain strong in 2016 with a forecast of 17.6-17.8 million vehicles sold by year end, an increase over a record-breaking 2015. “We now have greater confidence that record sales in 2015 will lead to yet another volume record in 2016,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive, a leading provider of automotive production, sales and powertrain forecasts and automotive industry market intelligence.

Commercial vehicle sales are part of the upward trend. According to the February 2016 edition of the NTEA OEM Monthly Chassis Report, “Commercial truck chassis sales rose 19.5 percent in the U.S./Mexico market in November 2015 as compared to the same month the previous year, with cumulative sales up about 9 percent. Canadian sales rose 25.5 percent in November and were up almost 15 percent for the year.”

The “Looking Ahead” section of the report paints a positive global growth outlook with projections at 3.4 percent in 2016 and 3.6 percent in 2017, corresponding with forecasts of 7.5 percent for India, 2.6 percent for the United States and about 1.8 percent for the European Union.

Scott Percival, Category Manager at Keystone, echoes that sentiment and adds there are a number of factors contributing to the growth potential of fleet business in 2016, including a rebounding US economy that finished strong at the end of 2015, as well as a decrease in fuel costs and low financing rates, which have supported the increase of new truck sales.

Mike Antich, Contributor, Editor and Associate Publisher of Automotive Fleet, reminds us that “fuel represents approximately 60 percent of a fleet’s total operating costs. Consequently, the stability of fuel pricing over the past 36 months has been the No. 1 factor contributing to keeping fleet operating costs flat.” Low fuel costs certainly enable businesses to further invest in their fleet and more vehicles on the road create additional professional upfitting opportunities for you!

Impressive year-over-year commercial growth last year will prove challenging to surpass in 2016. Antich, who authored 2016 Buying Forecast for Commercial Fleet, states fleet ordering for the 2016 model- year is forecast to be flat compared to the prior model-year, but “as the economy has improved in some economic sectors, these companies will in, crease their fleet buy due to growth in their businesses.”

But projections of a “flat” year still yield an impressive number of bid opportunities for professional upfitters...

John Brassfield is the owner of two Trucksmart retail locations, one in Rocklin, CA, and the other in Aurburn, CA. Truck accessory sales have been the driving force of Brassfield’s business model the past 29 years and there’s no slowing down in sight. Sales are booming and the professional upfitting contracts keep rolling in. “We have reliable and consistent professional bids with the municipality and railroad, fire protection, security and pest control companies, landscapers and builders and electrical contractors,” said Brassfield. “We (retailers and restylers) thought that when the economy collapsed, this Bedslidewas going to be the new state of normal. But it’s come back even better, at least regionally. I see a lot of contractors investing in brand new vehicles and equipment.” Commercial professionals + New Vehicles + A Need for New Equipment = $ for Retailers and Restylers

Market Trends and Products

Jeff Kotz, Senior Product Manager for commercial vehicles at WEATHER GUARD®, says there has been a shift to lighter weight, more fuel efficient models that deliver what a user needs in a more economical way. But, he notes, “While many businesses are investing in upgraded vehicles with enhanced features, the average life of a commercial vehicle remains 10-11 years in comparison to the historic 7-8 years, so we still see a lot of replacement product sales.” WEATHER GUARD® top sellers continue to be the 127 series toolboxes, the 184 series side boxes and the 300 series headache racks. There remains a huge and positive response to matte, textured black finishes on aftermarket products, added Kotz.

What’s selling BIG at Keystone? “Brands like WEATHER GUARD®, Kargo Master, Cross Tread, Dee Zee, Bedslide and Fill-Rite continue to drive the trend with their toolboxes, tanks, van packages, racking systems, window screens, cargo slides and bulkheads. Jotto or RAM Mounting System laptop mounts and various track systems, hitches, wiring and tie downs are asked for frequently as well,” said Thomas Sabetta, a sales associate in the Exeter, PA, Keystone call center. WEATHER GUARD®, BackRack, Rigid LED Lighting, Samlex, Air Lift, Firestone, Bedslide and the Cequent family are some of the most popular brands Brassfield purchases from Keystone to service his professional customers.

While many new trends are impacting the professional market segment, three are revolutionizing the industry:

• The increase of light-duty trucks as vehicles of choice: The Wall Street Journal reported a 6.5 percent increase versus prior year in light duty truck sales during January 2016 and based on February 2016 sales data, the Ford F-series, Chevrolet Silverado, RAM and GMC Sierra all land in the Top 20 of overall vehicle sales, sending a very strong message that these pickup trucks are not only desirable everyday drivers, but also strong contenders in the professional space. “The ½-ton market has made so many strides in horsepower, fuel efficiency, towing capacity and overall price tag that these vehicles have become serious contenders for fleet bids. The Ford F-150, Chevy and RAM are some of the top vehicles being upfitted,” said Kelli Kenyon, a sales associate at the Greensboro, NC, Keystone call center. Brassfield agrees, “I’m used to seeing bids for ¾-ton trucks, but the ½-ton vehicles have improved in every single area.” Practicality is dominating the decision making of end users, added Brassfield.

Strong light-duty sales provide a positive outlook for truck accessory shops and professional upfitters alike, especially since the light-duty market has made enormous strides in quality performance, features and affordability.

• The form, function and rise in sales of commercial vans: According to the February 2016 edition of the NTEA OEM Monthly Chassis Report, “Through November (2015), total (US/Mexico commercial van) sales were up 21.8 percent, and shipments were just behind with a 21.4-percent growth rate.”

Kotz communicated a possible trend in work truck versus van, as data supports commercial work truck registrations have declined, while van registrations continue to increase. Could it be the start of a shift? Time will tell.Weather Guard Toolbox

Kenyon says aftermarket product sales for commercial van models continue to do very well at Keystone, stating the company has gone even deeper and broader on application coverage to accommodate the growing business. Form, function and an array of innovative aftermarket upgrades to choose from, such as the new WEATHER GUARD® EZGLIDE2 ladder rack system, continue to make commercial vans an attractive, affordable option.

• The groundbreaking Ford aluminum-alloy body: Simply put, “It’s a game changer. No doubt about it,” said Kenyon. The introduction of Ford’s groundbreaking aluminum-alloy body is not merely a phase, rather a new standard in the automotive industry. Ford encourages its brand loyalists to Go Further, and the aluminum-alloy body allows just that. “Class-exclusive* military-grade, aluminum alloy body— this is the same 5,000/6,000-series high-strength grade of aluminum that’s used in industries such as aerospace, commercial transportation and energy. Our objective: reduce weight while increasing strength. What’s more, aluminum-alloy is resistant to dents and corrosion.”

Kotz believes, “Making the decision to venture into aluminum has completely changed the industry and its impact is just starting. Other makers are following suit and the truck equipment industry must be ready for it, all the way down to the aluminum and steel plants.”

Erich Ross, Regional Sales Manager at Keystone, adds, “As the truck market continues to evolve, fuel economy will always be a major factor. Engine design technology has always played a huge role in that, but Ford has taken it a step further with its aluminum body. This has allowed it to reduce the F-150 by 700 pounds. That directly affects fuel economy and puts money back into the pocket of the business owner who relies on a fleet of trucks out on the road daily.”

Popular Vehicle Platforms

Impressive horsepower, torque and towing capabilities in combination with upgraded features, improved fuel economy and top rated safety features are now standard at a value price… allowing some extra wiggle room in the budget for upgraded LED lighting, towing accessories, cargo securement, toolboxes and racking systems. There is no shortage of quality choices in the work truck area, all of which have prime upfitting potential. Here are a few of the top models recognized as contenders in the professional fleet market segment:

• 2016 Ford F-150 named Kelley Blue Book’s Truck Best Buy
• 2016 Chevy Colorado was named Motor Trend’s 2016 Truck of the Year
• 2016 GMC Sierra 1500 Named the Texas Truck Showdown Towing Champion
• RAM 1500 named 2015 Fleet Truck of the Year
• 2015 Vincentric Best Fleet Value in America™ awards went to Toyota Tacoma Base Dbl Cab 2WD for mid-size pickup; the RAM 1500 Tradesman Reg Cab 2WD for full-size ½-ton pickup; the RAM 2500 Tradesman Reg Cab 2WD for Full-Size 3/4-ton heavy duty pickup; and the RAM 3500 Tradesman 6.4L V8 Reg Cab 2Wd for full-size 1- ton heavy duty pickup.
• Ford named Best Overall Truck Brand in 2015 Kelley Blue Book Brand Image Awards
• Ford F-150 named 2016 Green Truck of the Year Award

How Can You Get a BIGGER Piece of the Action?

As a retailer, if you’re interested in exploring the professional fleet market segment then strive to foster productive connections with local municipalities, reach out to vocational businesses and partner with a trusted name like Keystone to get you started with effective display programs, merchandising, stocking and spec’ing guidance, as well as product education.

Keystone offers its customers product from more than 800 suppliers and access to 165,000 unique SKUs. The sophisticated logistics system operates through a highly reliable and route-based fulfillment network. The eight warehouses and 47 non-inventory stocking cross dock locations are strategically positioned throughout the country to best meet the delivery demands of customers in North America.

Steve Hesson, owner of Steve’s Vans and Accessories in Marietta, Ohio, says, “Ninety-nine percent of the product we’re selling or upfitting comes from Keystone. The large offering of brands and products makes it possible for me to diversify and grow.” Brassfield adds, “A KAO truck is in both my stores every single day. I can order right now at 7 pm and have it here in the morning. It’s impressive.” That kind of service gives you a significant competitive advantage during any bidding process.

What’s Kenyon’s advice to professional upfitters? “Let us work with you to tap into the bidding potential for local municipalities. I encourage my customers to diversify the right way, through proper product education, so their business can become a viable option in the fleet bid process,” she said.

Enter 2016 with a fresh perspective—the professional fleet market segment continues to embrace change as a springboard for opportunity and so should you! Get a bigger piece of the action by optimizing the many resources available to you through your Keystone salesperson.

 

Recent Articles

LKQ finalized deal to acquire Warn Industries

Chicago, IL (November 1, 2017) - LKQ Corporation (Nasdaq: LKQ) today announced that it has finalized the acquisition of Warn Industries, Inc. (“Warn”) a leading designer, manufacturer and marketer of high performance aftermarket equipment and accessories. Warn was previously owned by Dover Corporation (NYSE: DOV). Warn will be a part of LKQ’s Specialty Segment, Keystone Automotive Operations, Inc. (‘Keystone”)

“Finding new and better ways to serve the needs of our customers is a priority for Keystone. We are excited about the value and capabilities Warn brings to our customer centric approach to service,” said Bill Rogers, Vice President and General Manager of Keystone. “Their leadership position in the market and premium iconic brand give us the ability to drive our long-term strategy of growing share in our core markets and developing viable points of entry into adjacent spaces that show promise.”

Warn offers a broad product line of premium winches, hoists, locking hubs and bumpers and serve specialty retailers and distributors globally. Warn has a long history and reputation of developing the highest quality most technologically advanced products in the industry. The red W logo is omnipresent where rugged dependable products are required. From mountaintops to worksites and deserts to disaster areas, Warn is the product enthusiasts and professionals depend on.

“The team at Warn is very excited to be part of LKQ / Keystone,” said Eric Banks, Warn Vice President of Operations. “Our approach to customers and market opportunities are very similar. We believe that by serving our customers best we serve the needs of the entire supply chain better. They know our market space and have been leaders in it for many years. Being supported by a company that can bring new and critical resources to us means that our customers and all of our channel partners will benefit,” added Banks.

Warn will be run in an autonomous way within LKQ’s Specialty Products Group and maintain its operational presence in Oregon. “It is fantastic to have a very capable management team and experienced workforce in place there. Their infusion of talent to our organization will contribute significantly to all our working groups,” said Kyle Shiminski, Vice President of Keystone’s Specialty Products Group. “Their passion for their products and customers will help ensure that we continue to provide the highest quality products and service experiences people have come to expect,” he concluded.

“The collective team will be focused on maintaining the highest level of customer focus and driving the growth initiatives the organization has already developed,” said Rogers.

About LKQ Corporation
LKQ Corporation (www.lkqcorp.com) is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. LKQ has operations in North America, Europe and Taiwan. LKQ offers its customers a broad range of replacement systems, components, equipment and parts to repair and accessorize automobiles, trucks, and recreational and performance vehicles.

About Keystone Automotive Operations
Keystone is the leading distributor and marketer of aftermarket automotive products and services, uniquely positioned to offer customers and suppliers substantial scale, the most comprehensive inventory selection in the industry, high levels of customer service, and innovative marketing support. Keystone is committed to expanding its offerings to meet the ever-growing needs of its customer base, providing them what they need, when they need it most.

Keystone Automotive Operations Showcases Parts VIA at SEMA

EXETER, PA (October 23, 1017) – Parts Via is a new jobber friendly eCommerce solution developed by Keystone Automotive Operations that connects brands, through a unique network, to retail outlets and consumers. It is a web-based solution which creates a seamless transaction environment built over a supply chain network and infrastructure that can deliver anything from light bulbs and exhaust systems to tow bars and truck bed products to just about anywhere in North America next day.

According to Eric Fairchild, at Keystone. “Parts Via gives consumers the convenience of purchasing authentic branded products online with the choice to have them shipped to one of Keystone’s many qualified network retailers and installers. Parts Via provides consumers with unparalleled access to local services, technical expertise and installation support that traditional online purchases do not provide.”

Parts Via creates a strategic alliance between brands, retail outlets and consumers using Keystone’s technology, inventory, warehouses and fleet to enhance the shopping experience for consumers while growing sales for the Parts Via partner and dealer network. It enables and helps businesses capture sales where and how consumers shop in the fastest growing sales channel, always pulling the local retail outlet into the transaction.

“How we make it work is simple,” says Fairchild. “A consumer purchases an authentic branded product from their favorite branded website. We give them the choice to ship their purchase to their home or pick it up at a local network dealer’s location, gaining access to installation and service.” In either case the local establishment participates.

Keystone’s supplier partner’s website serves as the point of consumer engagement and Parts Via coordinates efforts to secure the sale and channel post-transaction activity (pick up in store and installation) with local merchants (network dealers). Parts Via bridges the customer engagement gap that leaves local brick and mortar retail outlets disconnected in most e-commerce transactions.

On behalf of the supplier partner and the retailer (network dealer), Parts Via develops the eCommerce components, runs transactions, manages distribution and oversees customer support. “This type of coordinated network partnership is unique and made possible only through Parts Via,” says Fairchild. “After a year’s worth of testing with very positive results and a ton of data and testimonials, we look forward to expanding our network with new suppliers and network dealers in the coming months,” he concludes.

Suppliers and retailers, dealers, installers and jobbers interested in learning more about Parts Via can visit www.partsvia.com.

LKQ Corporation to Acquire Aftermarket Business of Warn Industries, Inc.

Chicago, IL (October 23, 2017) - LKQ Corporation (Nasdaq: LKQ) today announced that its Specialty Segment, Keystone Automotive Operations, Inc. (‘Keystone”), agreed to acquire the aftermarket business of Warn Industries, Inc., a leading designer, manufacturer and marketer of high performance vehicle equipment and accessories. Warn is a wholly owned subsidiary of Dover Corporation (NYSE: DOV).

Established in 1948, Warn’s aftermarket business offers a broad product line of winches, hoists, locking hubs and bumpers, with over 350 employees serving specialty retailers and distributors globally. Holding over 130 patents, Warn has a long history of developing the highest quality, most technologically advanced products in the industry.

“Warn’s leadership position and premium iconic brand offer our Specialty Products Group the ability to drive our long-term strategy of growing our core markets and developing viable points of entry into adjacent markets,” said Bill Rogers, Vice President and General Manager of Keystone. “LKQ and Warn will be committed to continuing delivery of great value to our customers and to growing our combined businesses to higher levels.”

The transaction is expected to close in the fourth quarter, subject to customary closing conditions.

About LKQ Corporation

LKQ Corporation (www.lkqcorp.com) is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. LKQ has operations in North America, Europe and Taiwan. LKQ offers its customers a broad range of replacement systems, components, equipment and parts to repair and accessorize automobiles, trucks, and recreational and performance vehicles.

Keystone Automotive Operations acquires Topline Systems, Inc.

 

Exeter, PA. Keystone Automotive Operations has announced the acquisition of Topline Systems, Inc., a dealer and retail software development company that specializes in dealership/shop management and point of sales products that include comprehensive sales, service and parts management modules. “Our interest in looking at software as a solution for our customers began when we tried to think of new and improved customer support strategies and ways we could help our customers grow. What are the challenges our customers face that we can help them overcome?” states Keystone Business Leader, Bill Rogers.

“After hundreds of customer visits in the markets we serve we determined that inventory management, procurement, sales processes, and fundamental reporting and analytics were areas that many of our customers struggle with. The options available to them are either complicated and expensive, or too simplistic and ineffective. We felt a robust and easy to use alternative was needed and found Topline’s suite of products a perfect fit,” adds Rogers.

Keystone and Topline have a long history of working together, collaborating on a variety of projects. “We are excited about continuing our work with Keystone in a much more significant way,” comments Topline president, Steve Karafas. “The availability of capital and other resources they bring to the relationship will result in expanded features and benefits for existing users and help our emerging presence supporting customers in new markets as well.”

The foundation of Topline’s software is firmly rooted in the owner-manager-doer mindset. It was developed at a dealership with a retail store and a service/installation shop - for that business, by that owner. The same daily decision making process used to run the business was engineered into the software and has application well beyond the market it was initially intended to serve. This thoughtful - “I’ve actually done this work before” - approach has resulted in a feature-rich software solution that is affordable, easy to install, and easy to use.

“There are hundreds of dealers in North America using the Topline program today and we intend to keep things business as usual for them. They will experience no interruption in services or be required to work any differently than they have in the past. In fact, our intention is to operate Topline independently to maintain the existing securities and confidentiality that all of Topline’s customers and business partners have enjoyed,” commented Rogers. “We are looking forward to expanding on the foundational programming solutions that Topline has developed and applying them to businesses in other markets with similar needs, including the automotive aftermarket where we see a significant opportunity.”

Keystone intends to infuse capital and resources into the company to help it continue developing customer satisfaction solutions in the markets they serve. “For over 50 years, Keystone / NTP-STAG has been committed to partnering with our customers to not only provide them the broadest and deepest inventory selection and world class fulfillment capability, but also helping them continue to grow and succeed by offering end-to-end marketing solutions and innovative e-commerce solutions,” says Rogers. He adds, “The addition of Topline allows us to continue to offer new ways to help our customers grow and succeed by providing value based, high quality, state of the art business solutions, including Dealership Management, Point of Sale, Service, and Parts Management.”

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