GM Accessories
The accessory market is part of the overall automotive aftermarket that is primarily dominated by service repair market. However, accessory business has grown vigorously, with far higher profit margins than service repair as well as vehicle markets. SEMA 2001 Market Study indicates $24.86 billion retail accessory sales for the year 2000. This is a tremendous increase (99.8%) over the year 1990 when manufacturing sales were $4.35 billion.
Although the opportunities in accessory business are great, OEMs, which roughly evenly share the value chain for accessories with distributors and retailers, have the lowest profit margin of 6% compared to 7.9% (distributors) and 6.9% (retailers), according to 1999 data. Based on the SEMA 2001 Market Study, new vehicle dealers have 11.1% of the market share in retail sales. However, dealers failed to successfully pursue the profitable accessory market due to the compartmentalization of sales, service and parts organizations at each dealership. In particular, GM dealerships, considered as a major sales channel of GM accessories, sell the lowest amount of accessories per vehicle among the big three automotive companies. According to Carlisle & Company 2002, GM retail accessory spent per vehicle is $38, while other domestic OEMs such as Ford and Daimler Chrysler exceed GM with $73 and $78 per vehicle, respectively. With the objectives of identifying key opportunities to enhancing General Motors (GM) vehicle accessorization business, an accessory business initiative was launched in 2001. The key findings, along with the recommendation of a decision-based strategic framework, are documented in the R&D MSR-020 research report entitled A Strategic Framework for Vehicle Accessorization. It is recognized that "significant dealer commitment, communication, and involvement is critical to a successful accessorization strategy". According to this report, assuming a 29% market share, General Motors’ potential accessory revenues would range from $147 million to $1.03 billion, under the most pessimistic and optimistic scenarios.
One of the strategic decisions was to leverage the current leadership of GM Service & Parts Operations (GMSPO) in the service parts markets to enhance GM’s revenue from accessories. Following upon the customer-focused accessory strategy, the goal is to provide customers with multiple choices in multiple flavors and to help GM dealers sell more vehicles by offering "Gotta Have" accessories tailored for their customers’ vehicle. Consequently, GMSPO launched a new Accessory Distribution Installer (ADI) model to make GM Accessories available to GM Dealers along with quality installation opportunity. The ADI stocks, sells, and installs accessories on vehicles for GM Dealers within designated areas of primary responsibility. This is aimed at hitting most important targets on availability, quality and order-to-delivery timing to increase customer satisfaction.
GM accessories offer great advantages to GM customers in the aspects of quality, convenience, affordability, and peace of mind. GM accessories are designed for best fit and function on GM vehicles. They are tested to GM standards for performance, durability, and safety. GM accessories are readily available from a GM Dealer at the time of new vehicle delivery, which means they can be included in the new vehicle GMAC finance contract and are fully backed by GM warranty. In fact, many accessory packages can be purchased and installed for $20/month or less with peace of mind.