OEM Variable Parts Pricing: Opportunities & Challenges

The following fragment of a strategic assessment for ‘OEM Variable Parts Pricing’ focuses on the first step: identifying the questions to pursue to uncover opportunities and challenges. With this partial sample, it is clear emerging solutions benefit from strategic assessments.

 

The use of online variable parts pricing by automakers is relatively new – the opportunities and challenges presented are not settled. The questions to ask are many and vary by stakeholder. For parts DSPs questions to explore include: (i) is there an opportunity to ‘own’ variable parts pricing implementation for some automakers? (ii) is participation at the dealer level (perhaps via integration) an appealing option? (iii) what are the risks of non-participation?

 

For DMS providers the questions include: (i) how the absence of parts prices residing in the DMS will likely impact dealership user experiences (and how can any shortcomings be mitigated by the DMS provider)? (ii) how can online variable pricing be re-envisioned to alter control? (iii) if the new GM MPL is successful, will this lead to other data now residing on the DMS to shift to online, granular access only?

 

For automakers the questions include: (i) which classes of firms could be the most effective partners to implement online access to parts prices for dealers, shops, insurers and other users? (ii) is the sourcing external or internal to your own IT (and if internal, will the market accept the disruption of unique solutions for individual automakers? (iii) how to best drive variable pricing ‘rules’ from your enterprise pricing solutions? (iv) what are the ways variable pricing be implemented and extended to maximize new OE parts sales? (v) what are the most effective ways to spend limited parts incentive funds? (vi) can additional information, such as repair procedures, be provided to participating shops and shop systems effectively?

 

There are also strategic considerations for other stakeholders including: AM parts suppliers, insurers, shop systems providers, MSOs and others – contact us to explore the strategic considerations for these stakeholders.

 

Above are a few issues and several questions – from select perspectives – to kick-off the process of identifying opportunities and challenges that may not be readily apparent. Engage with us to build out perspectives for other stakeholders, to identify additional questions, to clarify issues, undertake research and develop insights on mastering your challenges and opportunities.

 

 

 

 

September 2015