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Parts supplier looks to cabin filters for growth
Car cabin filters to help GUD Automotive offset stagnant local engine filter market
1 Oct 2013
By IAN PORTER
THE sensitive noses of Australian drivers and the high rate of asthma in this country are expected to help filter market leader GUD Automotive continue to grow despite a stagnant engine oil filter market.
The advent of cabin filters in new vehicles and their spread across model ranges has opened up a new market for the filtration specialist and its Ryco brand, according to chief executive Bob Pattison.
“Unfortunately, the engine filtration market is very mature and there is no growth,” Mr Pattison told GoAuto.
“But cabin filters is a whole new ballgame from our point of view and it’s exciting.
“We are putting in more effort to broaden our range, number one and, number two, making people aware that cabin filters exist.”
Mr Pattison was speaking at the company’s new headquarters and warehouse operation at Altona North in Melbourne recently after launching a new range of 4WD filter kits, each of which includes air, oil, fuel and cabin filters, suitable for 800,000 4WD vehicles already on the roads.
Mr Pattison said cabin filters first appeared on luxury cars a few years ago but were now found on around 850,000 of the one million new vehicles sold each year.
“On our last count, of the 17 million cars in the national carpark, there are now six million that can take a cabin filter,” he said.
“It is going to be a big category. It will be as big as engine air filters down the track because you change a cabin filter at about 15,000km. So, in fact, it should be a bigger market.
“And of course, the important thing is it is actually protecting people’s lungs and we’d like to think people take it very seriously.”
Because cabin filters are a relatively recent arrival in vehicles, there is a low awareness about them among the driving public.
Left: Ryco chief executive, Bob Pattison.
Mr Pattison said GUD, through its market-leading Ryco brand, was set to start a marketing campaign to raise awareness of cabin filters.
“We have been quite active in recent years in radio advertising, so our plan this year will be to consistently promote the message of cabin filters in our radio campaign. That will be a start,” he said.
“Obviously, the other thing is we will use our field sales team, which calls on 20,000 workshops a year.”
Mr Pattison said Ryco had developed a lot of point of sale material that showed the difference between a used cabin filter and a new one, and the field sales team would be distributing this material.
Eventually, Mr Pattison expects the cabin filter market to be as big as the engine oil filter market.
At present, a car uses three oil filters for every engine air filter but the ratio for cabin filters is very different.
“With cabin filters, we think it’s potentially one to one with oil filters or maybe one and a half for every oil filter,” he said. “Down the track, the market is potentially going to be not that much smaller than oil filters.”
The rise of cabin filters has come at a good time for GUD Automotive, because improved manufacturing standards and material technology has seen car-makers push out oil filter changes to 15,000km.
Back when the Holden 48-215 or FX ruled the roads, the oil service interval was closer to 5000km.
However, there are factors working to offset this trend. Sales of one million new vehicles a year has seen the total national carpark increase by around 500,000 vehicles a year. There are now 17 million vehicles in Australia for 23 million people.
In addition, drivers are covering more ground these days, which means they get to the next service a bit sooner.
“What we finding is that the oil filter market is not growing. It is declining by 2 or 3 per cent a year,” Mr Pattison said. “Fortunately, our sales have been going up in good numbers, in units. That means our market share is growing.”
He also said that the company had to adapt to an increase in DIY servicing at home as buyers swing away from franchised dealers and even car service chains.
“In the current economy, disposable income has been down. There has been a growth in do-it-yourself according to some of our distributors who are focused in that segment. Their growth has been greater than our trade distributors.
“It shows they have more people, in tougher, flatter economic times that are prepared to change their own oil and filter to save some money.”
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