MONTEBELLO, Calif., Feb. 6, 2008 (PRIME NEWSWIRE) -- For automotive aftermarket companies like Katzkin Leather, it's been a long and hard-fought battle convincing OEMs that their products are on par with those coming out of Detroit. At a time when domestic auto sales are sagging, the aftermarket shows no signs of slowing, requiring manufacturers like Chrysler and Ford to look at this lucrative industry from a different perspective.
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According to figures compiled by the Specialty Equipment Market Association (SEMA), the automotive aftermarket has become a $36.7 billion industry. Adopting an "if-you-can't-beat-'em-join-'em" approach, some OEMs are finally getting a piece of that market which has grown steadily over the past 40 years.
A prominent member of this industry is Katzkin Leather, the aftermarket's leading manufacturer of leather interiors. Katzkin's growth reflects that of the industry as a whole: founded as a small 2-man operation in 1983 by Mitchell Katz, the company has, in 25 years, grown into a 475-man operation with annual revenues of more than $70 million. And the future is even brighter because of relationships developed recently with Chrysler and Ford.
WHY OEMs NEED THE AFTERMARKET
What makes the aftermarket industry so desirable is its ability to react quickly to consumer demand in a media-driven, retail world dominated by product personalization and customization. "The OEMs are piloting some very big ships and it can take a long time to turn those ships to meet short-lived trends," says Brooks Mayberry, president of Katzkin Leather. "What takes them months or even years to do, we can do in a matter of weeks."
Katzkin does not manufacture slip covers. What they offer are highly-engineered interiors that fit precisely over the factory foam of more than 2,000 vehicles. They're available in more than 100 colors and materials with various two-tone options and extras such as piping, perforation, contrasted stitching and more, resulting in billions of customizing options. What's most impressive is that Katzkin can manufacture and ship a completely customized interior in just 24 hours, in a sense bringing the Dell model to the automotive industry.
DaimlerChrysler and MOPAR recognized this in 2003 when they formed a ground-breaking, strategic relationship with Katzkin. Chrysler, Dodge and Jeep customers looking to upgrade their vehicles' seats from cloth to leather would order Katzkin interiors, by name, through MOPAR's own parts order system. This relationship was further enhanced in 2007 after extensive testing convinced Chrysler executives that Katzkin interiors were good enough and safe enough to be backed by Chrysler's own warranty and now Katzkin leather is available as an official Chrysler Accessory on all their vehicles, including those equipped with advanced airbag technology.
Kirk Scott, Vice President of OEM Sales for Katzkin said, "The most exciting aspect of the MOPAR-Katzkin relationship will be seen in 2008 and beyond." Wanting to appeal to regional and timely trends, Chrysler will upfit select vehicles both at the factory and at second-stage expediters such as Detroit-based Decoma, before they arrive at the dealers' lots, with consumer-driven options like specially-designed leather seats provided by Katzkin. "Chrysler sees this as the Holy Grail of OEM-provided vehicle personalization -- customized niche/buzz vehicles available straight from the factory," says Scott. "Katzkin Leather Package printed right on the window sticker means OEM validation of the brand's value and acceptance of an industry that Katzkin helped to build."
THE NEIGHBORS ARE WATCHING
Relationships like MOPAR-Katzkin can't go unnoticed in a town like Detroit. Executives at Ford had been watching the program develop for years and early in 2007 talks were underway to develop a similar initiative. Ford conducted their own testing of Katzkin's products to satisfy their Office of General Counsel and, once again, the quality and safety of this aftermarket product was validated.
Ford issued part numbers for Katzkin's leather interiors and in January 2008 a program was launched making Katzkin the exclusive supplier of aftermarket leather to Ford Motor Company. Consumers are now able to order Katzkin, by name, through any Ford Parts retailer. More importantly, further plans are being made to upfit Ford vehicles at the factory with Katzkin leather, just as they are at Chrysler.
Even before these developments with Ford, other members of the automotive community recognized the need for the aftermarket and, specifically, Katzkin Leather. Both AutoNation, the country's largest new-car retailer, and Carmax, the country's largest used-car retailer, have launched aftermarket accessory programs that require consumers to at least look at vehicle options before completing the buying process. They both chose Katzkin as their exclusive supplier of custom leather interiors.
THE EVOLVING INDUSTRY
Every year the SEMA Show is held at the Las Vegas Convention Center. The fact that every square foot of that massive complex, including the parking lot, is used by an ever-increasing number of exhibiting aftermarket companies demonstrates the vast influence of the aftermarket and its role in changing the face of the entire automotive industry.
With Chrysler and Ford forging partnerships with companies like Katzkin, the automotive machine is poised to take another evolutionary leap. Unlike the gradual evolution toward hybrid vehicles and eco-friendly manufacturing, it seems likely that the change to on-demand, consumer-driven vehicle personalization will prove to be swifter because the once adversarial relationship between OEMs and the aftermarket is giving way to one of cooperation and mutual benefit. Like the consumers they each serve, OEMs and the aftermarket are looking for instant gratification.
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