NAVIGATION GUIDE

BE EQUIPPED FOR THE ROAD AHEAD

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• Consumers’ mobile devices are changing the vehicle ownership experience

• B2B business processes are online, integrated and increasingly predictive

• “Connected car” technology will transform mobility and society

• These changes present opportunities for those positioned to capitalize on them>> We’re currently experiencing many positives in the North American automotive aftermarket …

• The entire automotive industry has enjoyed a strong last few years as the overall economy climbed out of the Great Recession.

• New car sales hit record levels and yet the aftermarket has pressed forward with steady annual growth.

• The aftermarket has enjoyed the benefit of a huge fleet of aging vehicles on the road, and record miles driven are being spurred by low gas prices.

Yet, there are challenges and uncertainties ahead. Near term, global economics are pressuring automotive parts suppliers’ profits, and aftermarket channels continue to consolidate and churn. Perhaps more profoundly, new technology is about to bring long-term disruptive change to the entire automotive sector, including the aftermarket.

Consumers and their smart phones are poised to disrupt existing vehicle maintenance behavior. Aftermarket businesses are striving to sharpen and enhance online B2B practices and develop new analytic capabilities. Silicon Valley and the automotive industry are converging before our eyes – new vehicle technologies and vehicle connectivity will revolutionize not just the car but our conceptions about personal mobility.

We are committed to providing suppliers the toolkit they need to address the challenges and embrace the opportunities that advanced technologies present, and prepare their businesses for The Road Ahead.

At the Automotive Aftermarket Suppliers Association (AASA), we are equipped to help aftermarket suppliers drive their business forward through …

• Experience based on a legacy of supplier innovation

• Industry analysis and strategic insights for business planning

• Unmatched expertise in government policies and regulations

• Networking and exchanging best practices through business conferences and peer councils

• Global outreach in opportunity markets

Our mission is to advance the supplier industry and the business interests of our supplier members. We are committed to our vision of a high-growth, profitable, innovative and influential aftermarket industry.

AASA is your valuable resource for navigating The Road Ahead. <<

“AASA IS EQUIPPED TO HELP SUPPLIERS DRIVE THEIR BUSINESS FORWARD.”

Bill Long, President and Chief Operating Officer, Automotive Aftermarket Suppliers Association (AASA)

THE ROAD AHEAD...

HOW WILL YOU

IN THEAFTER MARKET?

AHEAD WHEN YOU’RE

STAY

THE ROAD AHEAD

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LEGACY OF SUPPLIER INNOVATION AND IMPACT AN ASSOCIATION HISTORY OF LEADING CHANGE

>> AUTO SUPPLIERS DRIVE VEHICLE INNOVATION

1900s Auto Components

1970s / 80s1990s / 00s Fuel Economy &

Emissions

Passenger Safety

2016Driver Assist (ADAS)

>> PARTS MANUFACTURERS DRIVE THE U.S. ECONOMY

2.7%of U.S. Employment

2.6%of Total U.S. Wages

2.3%of U.S. GDP

VEHICLE PARTS SUPPLIERS

MANUFACTURE MORE THAN

2/3 OF THE VALUE IN TODAY’S CARS2/3

1904 Top industry companies form the Motor & Equipment Manufacturers Association (MEMA)

1933 Co-sponsors the first Automotive Service Industries Show

1960 Opens Washington, D.C. office

1970 Establishes first of many member councils

1983 Founds Heavy Duty Manufacturers Association (HDMA)

1987 Establishes the Japan Automotive Advisory Group (JAAG)

1998 Founds Original Equipment Suppliers Association (OESA)

2002 Forms Trilateral agreement with EU and Japanese associations

2003 Founds Automotive Aftermarket Supplier Association (AASA)

2008 Lobbies successfully for passage of anti-counterfeiting law

2011 Founds Motor & Equipment Remanufacturing Association (MERA)

2015 Spearheads memorandum of understanding with EPA prohibiting the use of copper in brake friction products

>> LEADING THE INDUSTRY

OUR VISION:A high-growth, high-profit, innovative and

influential supplier industry

R

est. 2003

est.1983

est. 2011

est. 1998734,000 direct jobs and 3.6 million total jobs. We are the largest U.S. manufacturing employer.

est. 1904

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OUR MISSION: SUPPLIER BUSINESS INTERESTS OUR MISSION: SUPPLIER BUSINESS INTERESTS

NAVIGATING NEW TECHNOLOGY NAVIGATING NEW TECHNOLOGY

ADVANCED TECHNOLOGIESBe a relevant force and resource on advanced vehicle technologies

Support the international business interests of suppliers by leveraging core competencies

Command a meaningful seat at the table of influence on behalf of the motor vehicle supplier

GLOBAL ROLE

ADVOCACY IN WASHINGTON, D.C.

OUR MISSION: SUPPLIER BUSINESS INTERESTS

>> THE DIGITAL REVOLUTION AND THE AFTERMARKET

Online Behavior B2C /B2B

Digital Business Models

Vehicle Diagnostic Data

Autonomous Vehicles

“THE SMART PHONE AND RELATED CONSUMER BEHAVIOR WILL BE THE FIRST DIGITAL IMPACT ON THE AFTERMARKET. AS CONNECTIVITY TECHNOLOGY COMES INTO THE VEHICLE, MORE PROFOUND IMPACTS ON THE AFTERMARKET ARE LIKELY DOWN THE ROAD.”

Jay Burkhart, Chief Strategy Officer, AASA

>> IN-VEHICLE TECHNOLOGY

“MUCH OF THE COMING WAVES OF VEHICLE TECHNOLOGY WERE DEVELOPED BY SUPPLIERS. NOW ALL THE SUPPLIERS NEED TO ENSURE THAT THEIR BUSINESS PLANS FACTOR IN OEM ADOPTION OF THE TECHNOLOGY IN VEHICLES.”

Brian Daugherty, Chief Technology Officer, MEMA

Telematics

Autonomous Car/Mobility Telematics

Driver Assistance

ADAS

Driver Assist (ADAS)

“Connected Car”

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OUR MISSION: SUPPLIER BUSINESS INTERESTS

NAVIGATING POLICY ISSUES

OUR MISSION: SUPPLIER BUSINESS INTERESTS

NAVIGATING POLICY ISSUES

>> ADVOCATING FOR SUPPLIERS’ BUSINESS INTERESTS

>> POLICY PRIORITIES FOR THE ROAD AHEAD

• Influence governmental policy that will shape the Connected Age• Drive vehicle safety including Driver Assist (ADAS)

• Push for Brand Protection & Intellectual Property Rights (IP)

• Support lawmakers who understand industry issues through the PAC• Commission studies on economic impact and special matters

• Track EPA and state regulations on materials used in our products

• Promote industry point of view on transportation bills and trade policy• Work with like-minded groups to shape manufacturing and business policy

1. Vehicle owners own the vehicle’s data. They are free to make use of the data and/or to grant access to it to other parties.

2. All players in the independent aftermarket need open, continuous “two-way” access to a vehicle with connected capability in order to receive information from the vehicle and to send messages to the vehicle, all with the vehicle owner’s permission.

3. Replacement product for vehicles on the road must be open to free competition. Suppliers of product to OEMs should not be unduly constrained from offering the parts to the independent aftermarket. Developers of product by suppliers in the independent aftermarket should not be unduly restrained from re-engineering suitable replacement parts.

“OUR INDUSTRY IS MULTI-FACETED AND OUR ADVOCACY TEAM MUST BE “ALWAYS ON.” RIGHT NOW, IT IS CRUCIAL THAT NEW POLICIES DO NOT CREATE UNINTENDED CONSEQUENCES FOR SUPPLIERS, AS ALL THIS NEW TECHNOLOGY RACES FORWARD.”

Ann Wilson, Senior Vice President, Government Affairs, MEMA

“THE INCREASED ADOPTION OF TELEMATICS AND RESPONSIBLE CYBERSECURITY ARE SUBSTANTIAL CHALLENGES. AASA/MEMA IS AT THE FOREFRONT OF ADDRESSING THE NEED TO PROTECT VEHICLES, VEHICLE DATA AND MOTORISTS WHILE ENSURING THE AFTERMARKET HAS ACCESS TO VEHICLES AND THE ABILITY TO SERVICE THE COUNTRY’S 258 MILLION PASSENGER VEHICLES.”

Tim Corcoran,2015 Chairman, AASA Board of GovernorsManaging Director, N America, ZF Services LLC

CYBERSECURITY

Shown at a recent media briefing are (left to right): Adrian Lund, Insurance Institute for Highway Safety; Xavier Mosquet, Boston Consulting Group; Nat Beuse, Vehicle Safety Research at U.S. Department of Transportation; and AASA President Bill Long.

Above: AASA Vice President Chris Gardner with U.S. Rep. Bill Johnson (R-N.C.)

Right: AASA President Bill Long confers with Tom Ward of Snap-on Inc. at the annual Legislative Summit.

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>> HUGE

U.S. AFTERMARKET INDUSTRY IS...

>> CONTINUOUSLY GROWING

>> INDISPENSABLE

$247,000,000,000Consumers spend $247B on auto care

COMPARED TO

$192B on air travel

$270B on personal care products

$300B on apparel

AFTERMARKET SALES VS.U.S. GDP

Aftermarket Sales

U.S. GDP

HOUSEHOLDS• 91% own a car

• 60% own more than one

VEHICLES• 258 million on the road

TRAVEL• 3.2 trillion miles in 2015

“INNOVATION AND TECHNOLOGY FROM MANUFACTURERS/SUPPLIERS ARE THE ENGINE DRIVING OUR INDUSTRY.”

David Barbeau, 2016 Chairman, AASA Board of GovernorsManaging Director of Global Aftermarket, TI Automotive

PARTS MANUFACTURERS SUPPLY THE REPLACEMENT PARTS THE MARKET REQUIRES

• Every vehicle Nearly 100,000 vehicle configurations

• All households 40 million used cars get a new owner each year

• Any model year Average age is 11.5; 80% of owners expect to keep car at least 10 years

PARTS MANUFACTURERS PRODUCE ONE TRILLION PART NUMBERS AND 160 MILLION ROWS OF PARTS DATA

QUALITY ASSURANCE FROM FACTORY

PRODUCT SUPPORT IN THE FIELD

FULL-SERVICE SUPPLIERS PROVIDE:

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OUR MISSION: SUPPLIER BUSINESS INTERESTS

NAVIGATING THE GLOBAL MARKETPLACE

OUR MISSION: SUPPLIER BUSINESS INTERESTS

NAVIGATING THE GLOBAL MARKETPLACE

>> INTERNATIONAL MARKETS

AASA provides its members with support for expanding their business around the world. Our strategy:

• Leverage the resources of our MEMA parent organization

• Maximize the global network of our member companies

• Utilize experienced global executives on staff

“THE OVERSEAS AUTOMOTIVE COUNCIL (OAC) HELPS OUR MEMBERS DEVELOP THEIR NETWORKING AND SALES OPPORTUNITIES IN EXPORT MARKETS.”

Ben Bruccato, Director of Membership and Sponsorship, AASA, and Executive Director, AASA Overseas Automotive Council (OAC)

“GLOBAL THINKING IS CORE TO AASA. MANY OF OUR MEMBERS ARE MULTINATIONAL COMPANIES WHO HAVE BEEN DOING BUSINESS OVERSEAS FOR A GENERATION. TODAY, VIRTUALLY ALL SUPPLIERS ARE EXPANDING THEIR PRODUCTION, SOURCINGAND SELLING AROUND THE WORLD.”

Jay Burkhart, Chief Strategy Officer, AASA

“OUR CHINA AFTERMARKET FORUM (CAF) HAS HOSTED LOCAL AFTERMARKET EXECUTIVES FOR MORE THAN A DECADE. NOW, WITH THE NEW MEMA CHINA CENTER, WE PROVIDE ON-THE-GROUND SUPPORT FOR BUSINESS DEVELOPMENT IN CHINA.”

Dr. Yilong Chen, Director, MEMA China Center, Shanghai, China

1 BILLION VEHICLES ON THE ROAD GLOBALLY

MORE THAN

70%Over

outside USA

VEHICLE PARC GROWTH RATES

3x HIGHEROUTSIDE OF US AND EU

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CHINA ALREADY HAS

120 MILLION CARS ON ROAD

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STRATEGIC INSIGHTSINDUSTRY ANALYSIS

>> INDUSTRY ANALYSISAASA has traditionally brought to its members the strongest suite of Industry Analysis reports in the aftermarket. Our members consistently rate Industry Analysis as their number one AASA offering.

• Market Analytics To support business planning

• Five Year Industry Forecast (Joint Channel Forecast) Updated annually, this consensus industry aggregate forecast is built on a custom econometric model by IHS

• Annual Industry Status Report Key Data points from across industry landscape includes product Replacement Rate Report (also available separately)

• Supplier Reports Evaluate business performance

• Annual Supplier Benchmarking Study Aggregated supplier metrics for members only

• Quarterly Supplier Barometer Aggregated supplier view of business conditions

NEW IN 2016

• New Enhanced Monthly Dashboard Combines all up-to-date business indicators in one executive view

• Product Category Marketing Sizing Initiative

>> STRATEGIC INSIGHTS

RECENT STRATEGIC REPORTS• A Roadmap to Safer Driving

• DIFM Outlook 2025: A Dynamic Battleground

• Aftermarket Outlook 2020

ANNUAL MERGERS & ACQUISITIONS (M & A) STUDY REPORTING ON SUPPLIER STRATEGIES

• Value of Full Service Suppliers

• Changing Role of the Supplier

• Supplier Success Stories in e-Tailing

• Extended Terms Study & Suppliers Business Conditions

AASA works with world class partners to develop thought leadership reports for member executives. These studies are built on deep, integrated research and deliver strategic findings, business contextand recommendations for action.

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Objective: steering committee for industry marketing programs and projects

Members: marketing professionals in brand and product management, category analysis and market research, advertising and promotion

China Aftermarket Forum

Objective: engage external constituents to advance the development of a profitable independent aftermarket in China

Members: top execs for China Aftermarket at AASA member companies

Overseas Automotive Council

Objective: drive product standards and outreach with regulators on key issues impacting the category Members: product or engineering brake experts from suppliers who participate in the critical brake category

Objective: increase the shared knowledge and product development of the filtration sector Members: executives from supply companies that specialize in filtration

Objective: support council members to develop and expand business opportunities outside of the U.S

Members: manufacturers, exporters and those whose business overseas is critical to their enterprise

COUNCILSCOUNCILS

LEARN

NETWORK

AASA Board of Governors Objective: governing body for the association

Members: C-Suite executives from key suppliers

TECHNOLOGY

Objective: collaborate in learning about the fast moving trends in technology that could provide opportunity to the aftermarket

Members: data specialists and digital experts who work closely with information technology at their member companies

Industry-wide annual event that is the fastest growing program at AASA. ATC members, all other AASA members and channel partners are invited to hear from outside experts in each of the areas of new technology – digital business models, app development, connected vehicle, virtual reality, 3D printing, and Big Data.

“TECHNOLOGY IS MOVING FAST AND AT AASA WE BELIEVE IT IS OUR ROLE TO MAKE SURE ALL SUPPLIERS ARE CURRENT WITH TECH DEVELOPMENTS. WE BRING SUBJECT MATTER EXPERTS TO THE GROUP TO PROVIDE FAST-PACED LEARNING AND TO FACILITATE DISCUSSION ABOUT THE OPPORTUNITIES FOR IMPROVING THE INDUSTRY.”

Chris Gardner,Vice President, AASA Executive Director, ATC

WITH PEERSFROM EXPERTS

Objective: develop well-rounded industry professionals for the future

Members: high potential managers at member companies

MEMA Financial Services Group

Objective: provide stewardship to assist member credit planning

Members: finance executives at member companies with oversight of customer credit

Know Your Parts Program

Online and media campaign driving direct reach to technicians, communicating the premium quality choice and providing diagnostic tips direct from the manufacturer

>> AASA COUNCILS ENGAGE SUPPLIERS IN THE INDUSTRY

Marketing Executives Council

Technology Council

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>> INDUSTRY EVENTSBUILD BUSINESS RELATIONSHIPS WHILE CONDUCTING BUSINESS

EVENTS & SHOWS

As co-owner of the most important event in North America, AASA strives to continually enhance AAPEX to optimize member productivity and business benefits. AAPEX represents the $477 billion global aftermarket auto parts industry.

AASA partners with Messe-Frankfurt to drive the value of various international show venues in Shanghai, Frankfurt, Mexico City and other global trade events.

Industry conference for member networking, collaboration and learning.

OUR MISSION: To advance the automotive aftermarket supplier industry

and the business interests of our members

This industry-wide, annual event is the fastest growing program at AASA.