The name Steven Fry may not ring any bells, but one of his inventions is pretty familiar.
In the ’80s, Fry invented the cargo-net for use on pick-up trucks,initially for off-road racers, but they gradually made their way into mainstream on-road use. Fry is now taking his interest in the automotive aftermarket a bit further.
Fry is the chairman and CEO of Newport Beach-based Motor Vehicle ATmarket, which is setting up an online distribution system to sell automotive aftermarket products like bike racks, suspension kits and bedliners on dealers’ showroom floors. Before a customer receives the vehicle, the dealer will provide the labor for the accessories, making revenue on both parts and labor.
MVAT will be introduced at the California International Auto Show in November.
Fry hopes MVAT will provide some organization to the aftermarket industry.
“The aftermarket is like the Wild West,” Fry said. According to Fry, only about 10% of aftermarket products are available through dealerships, with most products sold through retailers like Pep Boys or Wal-Mart.
MVAT will connect the aftermarket manufacturers with the dealerships, so car accessories can be included in the financing and warranty of a car. MVAT will take a percentage of each transaction.
Fry is coordinating with dealerships and aftermarket manufacturers on which parts will be sold, and will work with the Society of Automotive Engineers on safety and quality assurance certifications. Fry said comically that floor mats don’t need certification, while parts like turbochargers typically do.
Due to his background, Fry already has relationships with the SAE and many of the parts manufacturers, easing the process. Avery-Dennison, Johnson Controls and Powerdyne are some of the companies that have expressed interest in using MVAT.
“It gives them another distribution point for their products,” said Kevin Allen, the executive director of the Orange County Auto Dealers Association. “MVAT should be of great interest to dealers.”
Fry said the National Automotive Dealers Association also has expressed approval of the program.
Dealers will be able to take a share of the $22 billion specialty auto parts industry, which Fry said has consistently doubled the annual growth of the auto industry.
Fry has been working on the system for seven years.
“It’s just killing me,waiting. If you’re going to do something great, you have to have patience,” Fry said.
Rockwell worked with Fry on the initial market research and provided capital for the venture. J.D. Power also participated in the research, polling dealers, manufacturers and 40,000 new-car buyers. Rockwell was interested in the automotive industry as a part of its defense conversion, and eventually used the data to put Global Positioning System devices in GM cars.
“It worked out pretty good for them,” Fry said.
Even though the system is based on the Internet, it originally caused a problem for Fry. MVAT’s original business plan called for a modem-driven model.
“When the Internet hit,” Fry said, “we had to put everything on hold and get the technology. … It has been a blessing, even though I have a few more gray hairs.”
MVAT already has gone through three private rounds of financing and had one round with Chrome Data, with a funding to date of just more than $1 million dollars. It employs seven people, but Fry expects its ranks to swell to about 50 after MVAT gets its next round of financing. It expects $25 million dollars in the next two to three months from a combination of VCs, dealers and suppliers.
“We have a big job to do,” Fry said.
Fry has been making specialty aftermarket parts for almost 20 years, with his start locally.
“The aftermarket strength is in Southern California. The aftermarketers have been here since day one,” Fry said.
He started in the aftermarket business as a participant in Baja offroad races, making straps and cargo nets for some of the racers. As the popularity of the accessories grew, Fry started getting orders from Kawasaki and Yamaha. He patented the cargo net and still gets royalties that, Fry says, “pay the bills.” Fry also manufactured other car accessories like pickup seats and bedliners.
