Chris Aiello Manufacturers and Dealers need to embrace a new set of opportunities in 2025
As another December has arrived and 2024 winds down, you may be reflecting on a year filled with growth, innovation, and evolving challenges that you are facing in the industry and your local market. The close of one year offers a unique opportunity to assess the past and set sights on the future. Looking ahead to 2025, it’s clear that the industry will continue to face rapid changes, from advancements in technology to shifts in customer expectations. With these changes comes a new set of opportunities and challenges, and both OEMs and dealers are poised to navigate them through stronger partnerships, strategic innovations, and a renewed focus on sustainability and digital transformation.
As we do each year in the December edition, we explore the critical dynamics of the manufacturer-dealer relationship. Let’s discuss how dealers can leverage their manufacturers’ strengths to drive revenue growth and foster innovation for the year ahead. This partnership, which was once primarily about sales and distribution, has evolved to encompass a broader, more strategic alliance that enables both OEMs and dealers to thrive in an increasingly complex marketplace.
At its core, the OEM-dealer relationship is a mutually beneficial arrangement. OEMs depend on their dealer networks not only to sell products but also to provide essential after-sales services like parts, maintenance, and technical support. Dealers, in turn, rely on OEMs for product innovation, training, and support to meet the changing needs of their local customer base. This dynamic ensures that end-users receive the high-quality service and equipment necessary to keep their operations running smoothly.
However, the nature of this relationship is changing. Technological advancements, shifts in customer expectations, and evolving market dynamics are pushing both OEMs and dealers to adopt new strategies and approaches. This includes deeper collaboration on everything from financing and warranty processes to addressing safety concerns and driving innovation in product development.
Key Trends Shaping the OEM-Dealer Relationship
As we look ahead to 2024 and beyond, several key trends are shaping the future of the OEM-dealer relationship. Understanding these trends is critical for both parties to stay competitive and continue providing value to their customers.
New Truck Inventory and Rental Utilization
Lift truck dealers face a significant cash flow challenge when OEMs demand new truck purchases for their rental fleets amid declining rental demand and rising interest rates on existing inventory. Increased depreciation expenses further aggravate these financial pressures, negatively impacting dealer profitability. As new equipment prices begin to fall, the dealer-OEM relationship becomes delicate. OEMs aim to keep production lines active, but dealers must balance managing high inventory costs with profitability. This highlights the fine line between keeping a strong partnership while facing market challenges and fluctuating demand.
Increased Focus on E-Commerce and Digital Platforms
I recently presented the importance of offering customers the option to purchase your products online at MHEDA’s Parts & Service Management Conference this past September. I discussed how dealerships can leverage e-commerce to enhance customer satisfaction and streamline the ordering process.
Customers today expect a seamless, user-friendly experience when researching, purchasing, and maintaining their equipment. This shift toward digital solutions transforms the traditional OEM-dealer model, forcing both parties to invest in new technologies that enhance the customer experience.
Dealers are increasingly adopting e-commerce platforms to streamline parts sales and service scheduling. Meanwhile, OEMs are developing digital tools that allow dealers to offer more personalized support to their customers. The result is a more efficient, customer-centric approach that meets the demands of a digital-first marketplace. The balance between the OEM and the dealer will be for those OEMs who already sell their products online and credit the dealer for the sale. How do those OEMs align with their dealers who already have their own stand-alone e-commerce platform?
Data-Driven Decision Making
Data is becoming an increasingly critical asset in the material handling industry, but dealers need better access to actionable insights from their OEMs to make informed, data-driven decisions. As the industry evolves, it’s not just about having data about having the right data in the hands of dealers to enhance decision-making and improve customer service.
Having access to data on customer preferences and buying trends allows dealers to tailor their products and services more precisely, providing a personalized experience that fosters stronger customer relationships. Collaboration between OEMs and dealers, built on sharing robust, actionable data, is key to unlocking new revenue streams and staying ahead of customer needs.
Sustainability and Environmental Responsibility
Sustainability is no longer just a buzzword; it’s a driving force in the material handling industry. OEMs and dealers are pressured to reduce their environmental impact and adopt more sustainable practices. This includes everything from developing energy-efficient equipment to implementing eco-friendly service and maintenance practices.
OEMs are increasingly designing products with sustainability in mind. Dealers are crucial in promoting these products and educating customers on the environmental and financial benefits of choosing more sustainable options. For example, by helping customers understand how the shift to electric can optimize fleet performance and sustainability, dealers are key drivers in accelerating the adoption of cleaner, more efficient technologies in the marketplace.
Aftermarket Support
Aftermarket support is becoming a more critical component of the OEM-dealer relationship. As equipment lifecycles lengthen and customers demand more reliable and cost-effective solutions, dealers are being called upon to provide a higher level of service and support throughout the equipment’s life.
This trend drives OEMs to invest more in training and support for their dealer networks. By equipping dealers with the tools and knowledge they need to offer comprehensive aftermarket services, OEMs can ensure that their products continue to perform at a high level long after the initial sale.
Rise of Direct Consumer Business
Strategic partnerships between OEMs and dealers are becoming increasingly important, driven by the rising demand for direct-to-consumer (D2C) business. As consumers expect more direct and personalized interactions with manufacturers, OEMs, and dealers must collaborate closely to meet these demands. Traditionally, OEMs relied on their dealer networks for customer interactions, but the shift to D2C models is changing the landscape. Customers now expect direct engagement with manufacturers for purchasing, support, and service, requiring OEMs and dealers to ensure a seamless experience across all touchpoints.
For dealers, this shift means becoming more integrated into the OEM’s overall business strategy. OEMs seek dealers who can act as true partners, helping them navigate the complexities of D2C while maintaining high service standards. Strategic partnerships allow both parties to leverage their strengths—OEMs excel at product innovation, while dealers bring local market knowledge and customer relationships. Together, they can offer a more comprehensive solution that benefits both the business and the customer.
Collaborating for the Future
Looking ahead to 2025 and beyond, the OEM-dealer relationship will continue to evolve in response to changing market conditions. Both parties must embrace new technologies, adopt more sustainable practices, and deepen their strategic partnerships to remain competitive.
For OEMs, this means investing in the tools and resources that enable dealers to succeed through training, financial support, or digital solutions. For dealers, it means becoming more agile and proactive in their approach, leveraging data and technology to meet their customers’ changing needs.
One thing is certain: the OEM-dealer relationship will remain a critical driver of success. As the marketplace continues to evolve, those who can adapt and collaborate effectively will be well-positioned to thrive in the years to come.
About the Author:
Chris Aiello is the Business Development Manager at TVH Parts Co. He has been in the equipment business for 17-plus years as a service manager, quality assurance manager, and business development manager. Chris now manages a national outside sales team that sells replacement parts and accessories in various equipment markets, such as material handling, equipment rental, and construction/earthmoving dealerships.
