“After-market parts supplier based in Memphis gets key endorsement by Insurance Institute” |
| After-market parts supplier based in Memphis gets key endorsement by Insurance Institute Posted: 20 Nov 2010 10:00 PM PST A Memphis-based maker of car and truck bumpers expects business to surge with growing acceptance of its after-market parts as equal to more costly factory-made. The Insurance Institute for Highway Safety, a leading authority on crash testing and auto safety, rated a Diamond Standard bumper equivalent to factory equipment in crash testing. It was the first time the institute had compared an after-market structural part to the factory version. The finding has the potential to help the $150 million-a-year company grab an even-larger chunk of the collision parts business controlled by the nation's insurance companies, company founder Mike O'Neal said. "It's huge for us, because it's never happened," added O'Neal. "The Insurance Institute certification has the potential to double our business in the next 24 months." Diamond Standard supplies companies that do about 15 percent of the insurance collision repair business. O'Neal believes that will increase to 30 percent. The total market for collision replacement parts is more than $16 billion a year. The company, which has about 200,000 square feet of warehouse and distribution space at Bellbrook Industrial Park, has leased an additional 80,000 square feet to accommodate growth. The Insurance Institute testing of a Diamond Standard bumper for a 2008 Dodge Ram capped more than a decade of effort to differentiate O'Neal's company in the after-market parts industry, said business development manager Geoff Crane. The company has pushed for testing and certification standards and lobbied insurance departments around the country. "That is definitely a huge catalyst," Crane said of the institute's status report, dated Nov. 3, that found Diamond Standard's bumper performed as well as original equipment in both high-speed and low-speed crash tests. Russ Rader, vice president of communications for the institute, said Diamond Standard's bumper met the Certified Automotive Parts Association standard. "This is the first time the institute tested after-market structural parts," Rader said. "They're the ultimate authority on safety," O'Neal said. "The fact that CAPA was able to get them to do the test itself is almost a miracle." O'Neal got into the business working with his father, the late John O'Neal, who opened a bumper re-chroming shop called National Bumper Exchange in West Memphis in 1960. O'Neal saw a demand for high-end, after-market bumpers in the 1990s and began packaging his product under the Diamond Standard brand four years ago. The company has production facilities in Columbus, Ohio, Troy, Mich., Lawton, Okla., and Taiwan and distribution warehouses outside Seattle, Scranton, Pa., and Phoenix. It employs about 439 employees in the U.S., including 65 in Memphis, and about 400 in Taiwan. About half of O'Neal's business is Diamond Standard. Affiliated companies also supply components for major appliances, lawnmowers and auto manufacturers. Diamond Standard replicates factory bumpers and components for top-selling domestic and Japanese vehicles. O'Neal estimated about six million vehicles have been repaired using its bumpers and supporting items such as impact-absorbing high-density foam and steel underpinnings. "They call it reverse engineering," Crane said. "We call it precision engineering." The company has spent about $2 million over the past 5-6 years on research and testing to prove its parts equivalent to factory-made. It has 170 parts certified by NSF International, a not-for-profit, non-governmental third-party accreditation company based in Ann Arbor, Mich. The Certified Automotive Parts Association has just begun to certify structural parts, Crane said. The crucial test is that replacement parts perform as well as the original in minimizing vehicle damage and, through proper functioning of systems such as airbags, assuring passenger safety. O'Neal said the firm's value proposition is that it saves insurance companies money, both on the replacement part, typically 27 percent less than factory-made, and in future damage if the repaired vehicle is crashed again. The competition helps keep down the cost of factory parts. Insurance Institute president Adrian Lund said its testing "shows that after-market parts can be reverse-engineered without compromising safety. An after-market bumper that meets CAPA's new standard should perform as well as the original." -- Wayne Risher: 529-2874 This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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