Ford Taps Into $500 Billion Auto Parts Market With New Aftermarket Line

Industry News

You can now service your Toyota, Mercedes, or Chevy at a Ford dealership.

Despite the fact that many automakers sold more new cars in 2016 than they ever had before, the average age of vehicles in the US is still increasing as reliability goes up. What this means, though, is that the auto parts segment is just as red hot as the new car market, amounting to what Reuters claims is a $500 billion market worldwide. As of now, it’s only expected to grow, and to capitalize on this booming market, Ford has just announced that it’s now in the business of selling car parts.

In a bold move to reinforce its new position of a purveyor of mobility and not just an automaker, Ford launched auto parts brand Omnicraft, which will help the company edge out the competition and sweep up profits from other automakers by stealing their auto parts and service business. Omnicraft parts and service caters to both Ford and non Ford customers, meaning that Chevy or Toyota owners can now go into Ford and Lincoln dealerships to have service done on their cars, helping to steal a dealership’s most profitable venture and make money on marked up car parts in the process. Currently, 1,500 of the most requested auto parts are available and include oil filters, brake pads and rotors, loaded struts, and starters and alternators.

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Ford hopes to expand this selection to over 30 parts categories consisting of 10,000 parts in order to secure even more business that would traditionally go to outside competitors. As one might suspect, Ford won’t actually manufacture these parts themselves but instead buy the parts from its many suppliers and sell them at a markup for profit. It’s a wise strategy since the automaker hopes to debut an electric SUV by 2020, and as Tesla and Chevy Bolt owners have been finding out, electric cars need much less servicing than regular cars since oil changes, fluid flushes, and even brake pad and rotor replacements are either irrelevant or can be performed at longer intervals (thanks to features like regenerative braking).

With Omnicraft, Ford’s customer service division will reap the extra cash while the internal combustion engine still reigns, tapping into what Frederiek Toney, president of the Global Ford Customer Service Division, claims will be a 70 percent expansion in the automotive parts and service industry. Big bucks seem to be coming Ford’s way. “As the average age of vehicles increases, especially in mature markets like the United States and Europe, there is more of a need for auto parts,” said Toney, "which is no secret. It behooves us to try to compete for the life cycle of ownership.” Is Ford clever for engaging in these sorts of business practices or is this a low blow to the competition?

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