The Auto Care Association’s new Auto Care Connect event experience kicked off Thursday with an executive briefing from association President and CEO Bill Hanvey. Hanvey touched on a number of topics, including the ongoing Right to Repair fight, AAPEX 2021 and the industry’s response to the Covid-19 pandemic. Here are selected excerpts from his talk, titled, “365 Days of Change: Adapting and Evolving for the Future Ahead.”
“We’re obviously disappointed that Auto Care Connect can’t take place in person,” Hanvey said. “But we’re committed to providing you those opportunities to network to learn and to improve our industry.”
Hanvey thanked outgoing board member Jim Dykstra, who has been instrumental in the Auto Care Association’s embrace of emerging technologies.
Hanvey also thanked Larry Pavey, “for being a mentor, a voice of reason and a steady presence as we navigated these uncharted waters.” Hanvey said Pavey has solidified the Auto Care Association’s relationship with AWDA and has been “an undying advocate for family-owned businesses.”
“My respect for these two gentlemen is immeasurable,” Hanvey said.
New board positions
Hanvey said he was pleased to announce that Cliff Hovis of Hovis Auto Supply and Duncan Gillis of BBB Industries have been elected to take Pavey and Dykstra’s places on the board.
“I also want to thank Brad Kraft, the Auto Care Association chairman of the board and the rest of the board for their support, guidance and teamwork,” Hanvey said. “Brad along with all of us had no idea what was in store a year and a half ago and worked tirelessly on your behalf to ensure that your association will be viable for generations to come.”
The pandemic: the situation is improving
About the pandemic, Hanvey said, “We’re starting to finally emerge after a year-and-a-half of challenges. While we experienced many lows, we also experienced some highs and there’s more highs to come.”
“We’re now experiencing vehicle miles traveled back to pre covid levels after experiencing historical lows in March and April of 2020,” Hanvey said. “Changes in driver behavior continue the positive trend towards recovery along with consumer confidence.”
“The hesitation to take public transportation is reflected here as well. Public transportation trips were down significantly, throughout the pandemic reinforcing the importance of personal vehicles as a safe place,” Hanvey said. “Again, riding in someone else’s vehicle is worrisome for Americans, and this is reflected in the sales of Uber and Lyft trips.”
“As we noted earlier vehicle miles traveled is down 13 percent from last year,” Hanvey said. “One of the $400 billion questions is how that’s going to impact our car parc. If people are driving less they may keep their cars longer but it’s hard to know exactly what will happen particularly regarding the total vehicle population and how it’s split by vehicle age. We’ve seen unprecedented demand and prices for used vehicles which is forcing the automakers to develop incentives for new cars.”
ICE is here to stay for now
“Regardless of what you hear about the electrification of the fleet and the Boogeyman — the electric vehicle — vehicles 12 years and older account for 44 percent of the total VIO in the United States in 2020,” Hanvey said. “We expect this segment along with the 8- to 11-year-old and 4- to 7-year-old segments to continue increasing as owners hold on to their vehicles longer.”
“We all know that for those of us that work in the office, the office environment will change forever and while this will have a direct impact on vehicle miles traveled,” Hanvey said, ‘the long-term effects on company, culture and collaboration are yet to be seen. Eighty percent of organizations will be allowing some type of remote work for at least part of the time when pandemic guidelines are lifted.”
“How has consumer behavior changed?” Hanvey asked. “I think the biggest surprise for me was the consumers’ willingness to try vehicle-related projects while self-isolating — the trifecta of warmer weather, stay-at-home practices and social distancing measures have contributed to U.S. sales growth for a number of product categories tied to DIY projects.”
On shipping challenges, Hanvey said, “A surge in shipping volumes and Covid-19 related challenges have overwhelmed capacity, causing severe congestion and supply chain bottlenecks at almost all of our ports.”
“At the start of 2020, we saw a steep decline in cargo as the impact of the pandemic in China and the U.S. took effect,” Hanvey said. “In the second half of 2020, and now, into 2021, we’re seeing a rapid shift in the market and strong consumer demand resulting in container shortages and stress on the shipping system.”
“While shipping issues are expected to continue in the near future, challenges at both origin and destination terminals will hopefully ease over the summer as more longshore workers and truckers are vaccinated, container shortages improve and cargo volumes return to a more sustainable level,” Hanvey said. “Looking forward, long-term shipping rates are expected to normalize, but a much higher rate than we have seen in the past 15-plus years.”
Hanvey invited participants to the Supply Chain Disruption and Challenges Webinar on Tuesday, May 11th from 2-3 p.m. eastern. More information is available at autocare.org/supply.
Right to Repair updates
Hanvey said Right to Repair continues to be a major focus, not only of the association, but other associations. In Massachusetts, consumers passed the Right to Repair Act in November 2020 with an astounding 75 percent margin of victory, Hanvey said.
“This effort was led by Care and Auto Care and widely supported by the industry,” Hanvey said. “Voters made their resounding decision despite a $25 million smear campaign from the automaker’s that sought to cast us as criminals.”
“Shortly thereafter, the automaker’s filed a lawsuit against the Commonwealth of Massachusetts, seeking to annul the will of the voters,” Havey said. “It claimed that the Right to Repair Act was preempted by federal law. We are supporting the Massachusetts attorney general in the defense of the Right to Repair Act by providing technical expertise, and are working diligently to implement the governance necessary to ensure that cyber secure standards are being met.”
“In addition, automakers, and dealers are now trying to introduce legislation in Massachusetts that would delay the implementation of the Right to Repair Act until the model year, 2025, instead of the 2022 that’s specified in the law,” Hanvey said. “This potentially leaves millions of Massachusetts, consumers, without future vehicle repair options. The Right to Repair Coalition is working to oppose this unnecessary delay.”
“As we previously communicated to you, AASA, Auto Care and The Car Coalition are also pursuing federal legislation to provide a long-term national solution protecting aftermarket access to vehicle repair and maintenance data,” Hanvey said. “This effort is making considerable progress on Capitol Hill, including legislators’ support, bill sponsors and Commerce Committee consideration of bill language.”
“What we’re seeking in a federal bill is something that we should all be proud of and we all can stand behind,” Hanvey said. “Our requests are principles based and balanced and address the concerns shared across the industry, including with automakers. And they include: safeguard consumers in cybersecurity; retain a free, competitive market that relies upon consumer choice; it protects intellectual property rights. We believe that this national effort and the principles of ensuring consumer choice, free competitive market principles and safe, satisfied consumers across the vehicle lifecycle is something the entire industry should rally behind.”
AAPEX 2021: ‘The buyers will be there’
“It’s time for a tune-up and it’s our industry’s homecoming. And after over a year of not being able to be together, there’s really no words for me to express how I feel about AAPEX being our homecoming this November,” Hanvey said. “This is the year that challenged us but it’s also the year that will always remember lessons of resilience and evolution that made us stronger. While our virtual world serves a purpose, it certainly doesn’t replace the face-to-face collaboration that takes place at AAPEX. The buyers will be there. And the question for the exhibitors is — are you ready? Are you thinking differently? Are you merchandizing your brands to meet the demands of your customers for today and tomorrow?”
“We’re continually reinventing AAPEX to ensure your downstream customers are aware of the opportunity within your product categories. AAPEX will be the place where we can finally, safely be together again and working hard to ensure that we deliver on this experience that you’ve waited so long for — that I’ve waited so long for. Show features and sessions will be announced in the months to come and we’re always open to hearing from you in terms of how we can improve that experience.”
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