2019 Outlook: Aftermarket Automotive

by Kara Kuryllowicz
Minis adorn the walls of BMW Canada’s new regional DC in Mississauga, Ontario.

Uncertainty is in the Canadian air as 2018 comes to a close. Questions about trade deals, interest rates, housing values, oil prices and the GM plant closure are all weighing on the collective mind as we close out what has been a strong year.

Economists say we should expect further growth in 2019, in spite of an overall gloomy outlook for world economies. In fact, the OECD revised Canada’s GDP growth outlook for 2019 upwards in a November update.

Of course, a lot of our economic success is predicated on factors beyond the control of our own businesses, like politics south of the border, trade deals and wars, interest rates and oil prices. And with that knowledge business continues, dealing with many familiar challenges.

To get some insight into how several of Canada’s key sectors are faring, freelance writer Kara Kuryllowicz spoke with business leaders and asked them about the challenges they see for 2019. Here’s what she found out.

Vehicle owners have high expectations and OEMs like BMW know that location plays a significant role in giving drivers what they want.

“BMW recently relocated its Ontario warehouse from Whitby to Mississauga to enhance customer service and improve its supply chain logistics efficiencies, namely expediting parts delivery to 16 dealerships province-wide,” says Ian Sant, manager of the new Mississauga Regional Distribution Centre (RDC) for BMW Group Canada.

The Mississauga RDC opened in April 2018, after Sant and his colleagues had thoroughly assessed four contenders with proximity to rail hubs and airports and routes to markets such as Barrie, Hamilton, Kitchener-Waterloo and Burlington.

At 285,000 sq. ft, the Mississauga facility is 50 per cent larger than its predecessor and will handle more than 41,000 SKUs and over one million parts annually.

For more details on the DC see our Inside Logistics feature “Distribution Test Drive“.

“We will never be short a part because we can now increase our minimum on every part,” says Sant.

In late 2019/early 2020, BMW’s first continental distribution centre will open in Pennsylvania as part of a global parts supply chain decentralization, and in 2020 a second new Canadian DC will open in Vancouver.

As BMW prepares to launch its 2019 models, every single part required by each new model will be stocked, because as Sant sees it, new car owners want their vehicle back as soon as possible.

Parts availability is a challenge that can be addressed through network design, but finding a skilled, reliable workforce is a constant and growing problem.

BMW is tackling the challenge with a creative, forward-thinking strategy. “Do what you can to create an amazing workplace to help attract the people you need and keep them fully engaged,” says Sant.

Staff was top of mind in the design of the DC. While the location facilitates the commute, the workplace environment – with leather sofas, MINIs mounted on the walls and giant TVs – is fun and welcoming.

Last spring, employees at the Mississauga RDC discovered an i8 Roadster when they arrived at work and in October, employees were treated to a ride-and-drive event that let them experience the cars as more than the parts they pick. “Our DC employees are still talking about it,” Sant says.