Automotive Parts and Heavy Equiptment


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Automotive Parts and Heavy Equiptment

  1. 1. INDUSTRY BRIEF: AUTOMOTIVE PARTS AND HEAVY EQUIPMENT MARKET Although the automotive and heavy equipment manufacturers are industrial and economic forces, competition, changing auto buying behaviors, a shrinking supply base and reductions in production volume and capacity put pressure on margins. In order to effectively manage price, these manufacturers must keep an eye on: • Market share. • Alternative sources for parts or vehicles (i.e., gray markets, exchange parts, will-fitters, and scrap dealers). • Regulation in the US (versus global pricing flexibility). • The accumulation of copious amounts of warranty information. • Significant total cost of ownership of original equipment manufacturer (OEM) equipment. • The proliferation of data (alternate parts, collision share, industry data, and supersession chains). To improve margin, manufacturers must equip themselves with tools to manage prices and costs. PROS has experience helping companies of all sizes meet these challenges and achieve sustained business improvements. CHALLENGES The game has changed, requiring a new approach to business on many levels, including pricing. Although accurate pricing decisions must be made quickly, there is less time available to gather internal and external data from multiple locations, analyze it thoroughly, review market trends, and make the right decision. And because access to some information such as market and competitive data is also available to competitors, companies with the ability to react quickly will have an advantage. An equally difficult task is identifying the profitability of customer prices, since this information may be scattered amongst several electronic and paper sources or may not exist at all. This makes it nearly impossible to answer simple pricing questions such as: • Will quoted prices meet the organization’s profitability targets? • What are the root causes of profitability problems? • How are pricing decisions disseminated to and adopted by dealers? • Are dealers passing pricing changes to the end market? • How can organizations quickly react to change? • How do companies manage pricing strategies across geographies? PROFIT MANAGEMENT AND OPTIMIZATION FOR SERVICE PARTSPROFIT MANAGEMENT AND OPTIMIZATION FOR SERVICE PARTS
  2. 2. Also, manufacturers are under increased pressure to improve profits while protecting the interest of their dealers, yet they may not have access to the information, market trends, or insight into dealer profitability needed to establish prices with confidence. SOFTWARE SOLUTION With PROS, all the information needed to make pricing decisions is integrated—market price trends, competitive sources trends in costs and transactions, target prices, and margin. Dealer profitability (including dealer cost-to-serve) is also integrated to help companies understand the root cause of low margins by customer, while scientific analyses show which customer prices to target for improvement. By indentifying and monitoring profitability and key trends such as destructive price erosion at product levels, manufacturers can take definitive action now, instead of waiting for quarterly financial results. With greater price guidance targeted to the segment, an automotive and heavy equipment manufacturer can target parts that may drive a higher margin. PROS offers pricing best practices embedded in software, ready to implement. Our more than 100 customers have received significant improvement in margin and revenue after adopting this powerful set of tools. By utilizing PROS Pricing analysis software, customers gain insight into pricing strategies, identify detrimental pricing practices, optimize pricing decisions, and improve business processes as well as financial performance. Scientific Analytics Deal Optimizer Price Optimizer Rebate Optimizer PROFIT MANAGEMENT AND OPTIMIZATION FOR SERVICE PARTSPROFIT MANAGEMENT AND OPTIMIZATION FOR SERVICE PARTS
  3. 3. BUSINESS RESULTS One automotive parts and heavy equipment company had a pricing strategy that reflected its position as a leader in its industry. The company implemented PROS Scientific Analytics in an effort to look at its competitive position in the marketplace. The tool, populated with robust internal and competitive data, showed the company that it was not effectively executing its strategy. Once the company’s product line manager adjusted pricing appropriately, the company realized millions of additional dollars in profits. “Where PROS stood out relative to the competition was in the flexibility of the solution and the speed of implementation. Total cost of ownership was another key driving factor.” Sanjay Seth Partner at Carlisle & Company BIG DATA: Transaction Market Cost Product Customer Competitor PROS BIG DATA SCIENCE & ANALYTICS - Price Effectiveness - Sales Effectiveness - Rebate Management - Revenue Management OutSell OutMarket OutPerform
  4. 4. PROS Corporate Headquarters 3100 Main Street, Suite 900, Houston, TX 77002 Phone: +1 713-335-5151 | Sales: +1 855-846-0641 | Fax: +1 713-335-8144 ABOUT PROS PROS Holdings, Inc. (NYSE: PRO) is a big data software company that helps customers outperform in their markets by using big data to sell more effectively. We apply 27 years of data science experience to unlock buying patterns and preferences within transaction data to reveal which opportunities are most likely to close, which offers are most likely to sell and which prices are most likely to win. PROS offers big data solutions to optimize sales, pricing, quoting, rebates and revenue management across more than 30 industries. PROS has implemented more than 500 solutions in more than 55 countries. The PROS team comprises more than 650 professionals around the world. To learn more, visit