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Daimler North America turns its attention to growing its truck parts business

  Stefan Kurschner, senior vice president of Daimler Trucks North America's Aftermarket division
Stefan Kurschner, senior vice president of Daimler Trucks North America’s Aftermarket division

Daimler Trucks North America has numerous leading brand names: Freightliner, Western Star, Thomasville buses. One of the smaller names—Alliance Truck Parts, and the company’s plans to lift its role—was the focus of this year’s DTNA summer trade press gathering near Napa, California.

The plan as outlined by a series of DTNA executives who are part of the company’s Aftermarket division involves a significantly increased retail presence for Alliance in conjunction with the dealership network for those aforementioned vehicle brands, a stronger commitment to a fast turnaround in repairs at the dealerships, and an enhanced offering of technology products that will help enable the more rapid service times.

The goal of the faster service will be to take the Elite Support designation held by most of the DTNA dealerships in its network and provide a 24-hour guarantee on service work. Stefan Kurschner, senior vice president of Aftermarket—the DTNA division that includes the dealership services and Alliance—said 75% of the DTNA work is now going through dealerships with the Elite Support designation. Having that classification bestowed on a dealership, Kurschner said, “is not just some sticker that is glued on the windshield. It’s something you have to work for.”

A 24-hour guarantee can’t be used on all work, Kurschner conceded. “If you have a big accident, we aren’t going to be able to rebuild the truck in 24 hours,” he said. DTNA said it is working on what constitutes the 24-hour guarantee. “There will be a clearly defined expectation of what will be in the 24 hours,” he added. “If you have a regular service event, we are going to make it happen.”

Currently, 56% of the work assignments now meet the 24-hour goal, Kurschner said, with some dealers meeting 80%. But though that may look like a significant gap, he said taking it higher was “a very feasible goal, but we need to make it nationwide.”

Kurschner said “communication, transparency and the right tools to fix it” are the three main components of the 24-hour guarantee. In line with that, Kurschner and other members of his team discussed a suite of software products to help make that happen. Some of them are in place already, like Uptime Pro, a desktop-based solution for customers to interact with the company, while others—such as a phone app—are in development.

All of this is aimed at meeting what Kurschner said is what drivers and fleet managers tell him all the time what they want out of a repair operation: “Tell me more, tell me sooner, and fix my truck faster.”

But that also involves standardization of the experience. “A customer in a customer experience expects a service of equality at all the places they go,” Kurschner said. “We can’t allow them to have a good experience and then a not so good experience. At Starbucks, you know what to expect. We are driving for exactly the same. Our challenges are a little bit bigger, fixing a truck is even more challenging.” (Though he quickly conceded that making a good cup of coffee over and over, in every place where it’s done, is no small challenge either.)

A step toward helping the 24-hour guarantee will be the opening of the company’s 10th parts distribution center. This one will be in Maricopa County, near Phoenix, and it will give the network an ability to put a part in about 90% of the company’s service centers within a day. Kurschner said that figure is about 80% now.

Another key step in the plan for Alliance is to make its presence far more visible with a retail strategy.  Alliance-themed retail sections will be established inside dealerships (a mock display of one of them was set up for the briefing, and can be seen below); and stand-alone retail stores will also be opened. Under either platform, it will be the current DTNA dealer that will be the owner and developer of the retail store or display. DTNA will have a role in setting it up, but everything will need to be done with full cooperation of the dealer.

  A mockup of an Alliance retail in-dealership display
A mockup of an Alliance retail in-dealership display

So far, there are five in-dealer retail sections set up, and three retail storefronts. “Alliance is not a new brand for us,” Kurschner said. “We’ve had it for quite awhile in our stores, but now we are making a concerted effort to post the brand, to get people to recognize the brand so you know what you’re getting.”

John Finn, director of Aftermarket Marketing, said Alliance has “played well in that (parts) field, but we see an opportunity to play better. We see an opportunity to go after the entire parts business. It’s not easy to do but the market has potential.”

Besides the enhanced retail efforts, Alliance plans on carrying far more parts offerings. Several years ago, Alliance had just 30 to 35 product lines in truck parts. (A product line would be described as a type of equipment, like a radiator or a belt, though there would be many different specs under the product line). That number is up to 52 with a goal of 55 by the end of the year. The ultimate goal is about 80 lines.

Finn and Kurschner both conceded that the company is not number one in the parts business, though the fragmented nature of the business makes defining market share difficult. But it isn’t just larger parts manufacturers that are involved in the battle for market share with Alliance. As Kurschner said, “We have a lot of disruptors coming in with a portfolio of five parts lines. They can set up a digital marketplace and start selling that.”

Where Alliance does believe it can be number one is in the value parts sector. What is a value part? Kurschner described it as a part where the longevity of the part is not necessarily of the same quality as that put in by an OEM, but one where the company guarantees the quality in the work but where its expected operating life is not going to be at the same level as an OEM-level part. The shorter time span of that will be reflected in the price.

“We will be number one in the value parts chain, and we will provide this as part of the overall customer experience,” Kurschner said.

There is a gap in sales technology, Finn said, but it exists through the entire parts ecosystem. Transactions are still heavily conducted over the phone, and a robust platform is going to be needed to be built in conjunction with other technological needs DTNA has.  

The added parts lines would also be a component to meeting the 24-hour goal.  Kurschner said that DTNA believes about 75% of their needed parts are now available through Alliance “so we have to provide a backbone infrastructure to fill exactly what is missing.”

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.