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Letter to the Editor

Taiwan: Take Two

Technical clinics and panel discussions provide a wealth of automaker information and answers

When Chuck Sulkala told his wife he was making another 10-day trip to Taiwan to tour factories producing non-OEM parts, her response was just one word: Why?

"She wanted to know why I would do this again, after going to Taiwan on a similar trip in 1999," said Sulkala, a Massachusetts shop owner and past chairman of both the Society of Collision Repair Specialists (SCRS) and the Collision Industry Conference (CIC). "I told her because this time the Taiwanese government has asked us to come and speak, and maybe that interest and involvement of the government will help make a difference."

Indeed, Sulkala and four others from the U.S. collision repair market spoke at a September 4 conference in Taipei sponsored by the Corporate Synergy Develop-ment Center (CSDC) as part of that government agency's efforts to help the Taiwan automotive parts industry - collision and mechanical - expand internationally (See related article, page 14).

But the conference was just the start of a week that took the U.S. delegation - which also included a reporter for INSIGHT - to nine parts factories, a body shop and a Taiwanese vehicle proving grounds. Travel expenses for the U.S. visitors were paid by the CSDC and the nine non-OEM parts manufacturers the group visited.

While it was a first-time visit for most of the delegation, Sulkala and former shop owner turned industry consultant Lou DiLisio had a chance to see what had changed since their first visit to the island nation four years ago.

"Back in 1999 we gave you a list of things we felt needed to be improved upon in the factories," DiLisio told a gathering of representatives from the Taiwanese factories at the end of the week. "And we're very happy to see that many of those things have been improved. There are some things that still need to be improved, but as we've talked about, continuous improvement is a way of life."

While INSIGHT will have more coverage of the trip inside this issue and next month, the observations of the two second-time Taiwan visitors seemed of particular interest. Back in 1999, DiLisio had prepared a detailed report on the trip, including recommendations for changes and improvements, and although he and the other delegates pointed out problems with many of the parts looked at in the factories on this most recent trip, many of the problems were minor compared to those seen four years ago.

"They are small things, but they still can make a difference between whether I can use your part or will return it," Sulkala told the manufacturers.

Here are some of the key issues discussed:

Inner panels and hole punching

"As we explained to you in 1999 and again on this trip, one thing that is very, very important to the repair industry is that the inner panels, and where holes are punched out, be smooth," DiLisio said.

The sharp edges, U.S. delegates explained, can cut technicians when they are sanding or handling the parts, leading to costly injuries and lost time.

DiLisio and Sulkala agreed the non-OEM sheet metal parts makers had improved in this area, but some sharp or rough edges were still found on some parts.

Hemming

Back in 1999, U.S. delegates pointed out that non-OEM parts makers were hemming the flanges of outer skins over the inner differently than OEM hemming, resulting in a flatter rather than a rounded hemming. This can result in a difference in both the strength and appearance on the part.

"I noticed in many factories on this trip that the machines that hem the materials over have been changed so the edges of the parts look very similar to that of the OEM," DiLisio said.

Hood strikers

"When we were here four years ago, many manufacturers were welding hood strikers when the OEM strikers [were] peened over," DiLisio said. "This time we saw many of the factories…not only doing them differently, and making them the same as the OEM, but testing them as well. I don't think [they] were doing that four years ago."

Welding of inner panels and braces

Sulkala and DiLisio said that during their 1999 visit to Taiwan, they noted problems with the positioning of hinge braces and inner and outer panels.

"Last time we were here, there were no fixtures that held these parts firmly in place, and sometimes they moved when they got welded and got put in the wrong place," DiLisio said. "In every factory we went to this time, we saw fixtures changed to make sure those pieces were in the same place."

Tooling

"There were a lot of issues with the tooling the last time we were here that with little modifications or improved maintenance could become better," DiLisio said. "We saw many factories where the quality of the parts went way up because they spent more time on their tooling. I'm very happy to see that."

The news was not uniformly positive in this area, unfortunately. DiLisio and Sulkala said they were disappointed to learn that one of the factories - which they felt had been producing some of the better sheet metal parts back in 1999 - is now subletting out production of its non-OEM parts tooling to reduce costs. The quality of this factory's parts had declined, the two believe.

Measuring fixtures

DiLisio and Sulkala were also disappointed to see that each manufacturer still creates its own checking fixtures, and that some of the issues they noted with CAPA-approved fixtures back in 1999 still exist.

For example, CAPA-ap-proved checking fixtures for several hoods the group looked at last month had rounded corners while the hood itself has pointed corners. DiLisio and Sulkala said this is as much an issue CAPA needs to address as the manufacturers.

Packaging

Back in 1999, even good quality non-OEM parts were frequently unusable because of damage during shipping and handling.

"I'm very happy to say that the packaging we saw in the factories on this trip has improved significantly," DiLisio said. "We saw foam rubber pieces put on the edges so the edges don't get bent. We saw reinforced cardboard. We saw some new packaging with foam in it. A lot of enhancements in the packaging."

DiLisio and Sulkala also noted improvements in how parts are handled within the factories - such as foam spaces placed between hoods - to prevent damage.

Appearance issues

"Not only does the part have to work, but it has to be identical in appearance to the OEM part," DiLisio said the delegation told - or reminded - the non-OEM parts makers. The group explained that seemingly minor differences - even those only visible when the hood is opened or the car is put up on a lift - can have an impact on diminished value claims, on lease returns, etc.

"That means the materials the parts are made from have to be exactly the same, the colors of the materials on plastic parts have to be exactly the same, and the markings and stampings need to be put on in a way that they don't take away from the integrity and the value of that vehicle," DiLisio told the manufacturers.

The delegation, for example, was disappointed to see that some of the non-OEM headlamps they saw that qualified to be certified under the Manufacturer's Qualification and Validation Program (MQVP) had at least a dozen easily-seen appearance differences from their OEM counterparts.

They also pointed out grinding marks on some sheet metal parts that, if not sanded by the shop, could show when the part is painted.

DiLisio and Sulkala said the most recent delegation to Taiwan felt there was a wide range in response to such concerns from the manufacturers visited on this trip; some seemed much more receptive to suggested changes than others.

So was the return visit to Taiwan worthwhile? Both DiLisio and Sulkala agreed that it was. In addition to being able to see some positive results from their 1999 visit and recommendations, they were able to push for more improvements, they said. And they came away with a better understanding that the non-OEM parts makers need to hear more directly from repairers - not just from insurers, parts distributors and certifying organizations that might not always know or convey the repairers' needs adequately.

"It's important that you understand who your customer is," DiLisio told the manufacturers. "Repairers are the people who purchase your parts. We need to tell you what we need, and you need to deliver to us what we need."

"Part of the problem was that after the 1999 trip, we didn't participate enough in the process to help make it better," Sulkala told the manufacturers at the end of the trip. "I thought it was just your problem. I leave here this time realizing that it's our problem, and if this is going to be fixed, we together as a team will be the ones to fix it."

Collision Repairers Tell Taiwan Parts Makers: Understand Your Customer’s Needs

The percentage of non-OEM parts use in the United States will likely increase only if parts manufacturers recognize that collision repairers are their customer and if they meet that customer's needs.

That was the message a delegation of U.S. shop owners and association leaders delivered to parts makers at a conference in Taipei, Taiwan, in early September. About 100 representatives of Taiwanese parts manufacturers attended the conference, which was sponsored by Taiwan's Corporate Synergy Development Center (CSDC) as part of that government agency's efforts to help the country's automotive parts industry - collision and mechanical - expand internationally.

Geralynn Kottschade, a Minnesota shop owner and national chairman-elect of the Automotive Service Association (ASA), opened the seminar with a historic overview of the U.S. collision repair market from the 1970s through the 1990s. She said that during that time, efforts to increase the use of non-OEM parts were thwarted:

• by the inconsistency in the quality of the parts, which disrupted shop's production, required additional labor and hurt profits;
• by distributors and certification programs that didn't adequately address or communicate shop concerns with the parts;
• by increased regulation about consumer awareness and consent about parts usage; and,
• by the 1999 Consumer Reports article blasting the parts, and the court ruling that same year against State Farm over its use of non-OEM parts.

Chuck Sulkala, a Massachusetts shop owner and past chairman of both the Society of Collision Repair Specialists (SCRS) and the Collision Industry Conference (CIC), then provided an overview of the $26 billion U.S. collision repair market as it stands today. He said shops nationwide spend about $9.6 billion on parts annually, of which about 10 percent or $1 billion is for non-OEM parts. As the number of shops and shop profits decline, and as the percentage of vehicles being totaled rises, more shops see the value non-OEM parts offer - if the consistency of the parts quality improves, Sulkala said.

He said a key concern is that shops are unable to readily identify and order non-OEM parts by brand once they find quality parts. A shop may order a non-OEM fender for a particular vehicle and find that it works, for example, Sulkala said. But the next time the shop orders another fender for that same type of vehicle, it won't work, quite possibly because the two non-OEM fenders were made by different companies. This lack of branding results in shops viewing all non-OEM parts as equally bad and inconsistent.

Anecdotal evidence also suggest that shops often receive non-certified parts when certified parts have been ordered, further hurting the credibility of quality parts, Sulkala said. SCRS recently launched a study of this issue.

In the third segment of the day-long seminar in Taiwan, Illinois-based industry consultant Lou DiLisio, a former shop owner and past CIC chairman, asked parts makers to consider who their real customers are. In a show of hands, more of the non-OEM parts manufacturers viewed insurers, parts distributors or certifier as their customer rather than shops. (In later discussion, the U.S. delegation learned that insurers in Taiwan choose and purchase the parts used by collision repairers in that country.)

While these other entities can influence parts usage, repairers are "your real customer, the ones who purchase, install and sell your parts to the consumer," DiLisio told the manufacturers. Non-OEM parts makers will only sell more parts if "you know who your customer is and what they need," he said.

The fourth segment of the seminar, a discussion of what shops look for in parts and part distributors, also included two other members of the U.S. delegation to Taiwan: Dan Risley, executive director of SCRS, and Bob Pearson, a Minnesota shop owner and a representative of the Alliance of Automotive Service Providers (AASP).

In the week following the seminar, the U.S. delegation toured the nine non-OEM parts factories that, along with the CSDC, funded the group's travel expenses. The participating companies were Auto Parts Industrial (API), Da Juane Industrial Co., Depo Auto Parts, Gordon Auto Body Parts Co., Jui Li Enterprise Co., Pro Fortune Industry, Taiwan Kai Yih Industrial Co. (TKY), Tong Yang Group (TYG), and TYC Brother Industrial Co.   o

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