Archive | September, 2012

Nominations for the 2013 CAT Awards are now open

CATlogo

Nominations for the 2013 CAT Awards are open!

This year there are more ways to get involved in the nominations process. Do you know a factor that goes above and beyond your expectations every time? Is one of your customers a garage that’s beating the franchises at their own game? Perhaps you know an independent retailer that’s staying strong on the high street? The CAT Awards is your chance to get them recognised by the industry.

And don’t forget, it only takes ONE nomination.

Email your nominations to cat.awards@haymarket.com before the deadline of 19th October.

Here are this year’s categories in full

*Large factor of the yearopen to factors with a turnover of more than £1 million

“Does your factor always go the extra mile, night or day? Are their vans always on time and carrying the right parts? If so you should nominate them for this category.”

Last year’s winner: GMF Motor Factors

*Small factor of the yearopen to factors with a turnover of less than £1 million

“Small factors are the backbone of the aftermarket, and you might know one of the best. If you think you do nominate them for this award.”

*Large garage of the yearopen to garages with a turnover of more than £750k

“Large garages have the space, the kit and the training to take on a whole variety of work. If your local garage sounds this good point them towards this category.”

Last year’s winner: ABP Motorsport

*Small garage of the yearopen to garages with a turnover of less than £750k

“Small garages are the ones we love to hear about – size is no problem and the job is never too big. If this sounds like one of your customers nominate them for this award.”

*Retailer of the yearopen to all independent aftermarket retailers

“Does your business combine slick professionalism with friendly customer service? If you can answer yes to both those questions, you could be in with a shot at this award.”

Last year’s winner: A1 Motabitz

*Supplier of the yearopen to all aftermarket suppliers

“Do you have a supplier who delivers the right part on time first time every time? If so, this is the award for them.”

Last year’s winner: NGK

*Person of the year

“Which one person in the aftermarket deserves to be held above all others in 2013? Perhaps for a special contribution to their business or for overcoming personal troubles? If you have someone in mind, let us know.”

Last year’s winner: Brian Childs, NGK

*Lifetime Achievement Award

“Our most prestigious award, the Lifetime Achievement is decided by a CAT panel of experts.”

Last year’s winner: Joe Elliott

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CAT AWARDS 2013 – NOMINATIONS NOW OPEN!

CAT AWARDS 2013 – NOMINATIONS NOW OPEN!

CATlogo

Nominations for the 2013 CAT Awards are open!

This year there are more ways to get involved in the nominations process. Do you know a factor that goes above and beyond your expectations every time? Is one of your customers a garage that’s beating the franchises at their own game? Perhaps you know an independent retailer that’s staying strong on the high street? The CAT Awards is your chance to get them recognised by the industry.

And don’t forget, it only takes ONE nomination.

Email your nominations to cat.awards@haymarket.com before the deadline of 19th October.

Here are this year’s categories in full

*Large factor of the yearopen to factors with a turnover of more than £1 million

“Does your factor always go the extra mile, night or day? Are their vans always on time and carrying the right parts? If so you should nominate them for this category.”

Last year’s winner: GMF Motor Factors

*Small factor of the yearopen to factors with a turnover of less than £1 million

“Small factors are the backbone of the aftermarket, and you might know one of the best. If you think you do nominate them for this award.”

*Large garage of the yearopen to garages with a turnover of more than £750k

“Large garages have the space, the kit and the training to take on a whole variety of work. If your local garage sounds this good point them towards this category.”

Last year’s winner: ABP Motorsport

*Small garage of the yearopen to garages with a turnover of less than £750k

“Small garages are the ones we love to hear about – size is no problem and the job is never too big. If this sounds like one of your customers nominate them for this award.”

*Retailer of the yearopen to all independent aftermarket retailers

“Does your business combine slick professionalism with friendly customer service? If you can answer yes to both those questions, you could be in with a shot at this award.”

Last year’s winner: A1 Motabitz

*Supplier of the yearopen to all aftermarket suppliers

“Do you have a supplier who delivers the right part on time first time every time? If so, this is the award for them.”

Last year’s winner: NGK

*Person of the year

“Which one person in the aftermarket deserves to be held above all others in 2013? Perhaps for a special contribution to their business or for overcoming personal troubles? If you have someone in mind, let us know.”

Last year’s winner: Brian Childs, NGK

*Lifetime Achievement Award

“Our most prestigious award, the Lifetime Achievement is decided by a CAT panel of experts.”

Last year’s winner: Joe Elliott

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Klarius sells QH to Dutch Sator

Klarius sells QH to Dutch Sator

Klarius HQ

Klarius HQ

Klarius has sold QH Holland to Dutch holding company Sator.

Sator paid an undisclosed sum for the operation’s warehouse, vans and staff.

Many industry watchers at the recent Automechanika show suggested the sale could be the first of many by Klarius. Since Sator also owns H2 Equity, which bought a 49.9 percent share of Unipart Automotive last October, rumours were that the brand could change hands.

Wilson was quick to dash notions that Klarius would now divest itself of other QH operations across Europe, however, and repeated the commitment he made to the brand in the August issue of CAT.

He said the Dutch deal includes commitments from Sator to increase turnover in the Netherlands over the coming years and also guarantees at least ten years of supply from Klarius which acquired the Quinton Hazell Automotive Group in February 2010.

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Klarius’ Tony Wilson faces the critics

The aftermarket rumour mill can be damn accurate when it wants to be. Murmurs of ECP’s sale to LKQ surfaced long before the news was made public, and details coming through the grapevine were almost bang on the money.

What would QH think?

What would QH think?

Increasing market pressures have seen the mill turn its attention to a number of companies in recent months, but perhaps none more so than Klarius. It’s got six weeks to live and it’s trying to save the sinking ship of QH, we heard.

Thankfully, Klarius boss Tony Wilson is keen to put the rumours to bed. On the outside, at least, his thoughts are positive: “There are more rumours about us than is healthy,” he says. “But every one of them makes me smile because it means someone is spending a lot of time spreading gossip instead of getting on with their job.

“From the rumours I’ve seen so far I’ve been an arms dealer and Mafia front. I also never said we were opening a depot in the Middle East, so that one came out of the blue.”

Arms dealing aside, Wilson laughs when he hears his company has six weeks left to live: “At least I can book my holidays now. That’s handy,” he chuckles.

It’s not all rosy, however, and there are changes happening to Klarius. Wilson confirms the company is going through a period of restructuring, beginning with its banking procedure: “We are going through re-banking, and we’re changing our banking partners at the moment which is all going very well. So it’s hardly six weeks before we die, in fact it’s quite the opposite.

“In six weeks time we will have substantially stronger banking partners to help us with some of the acquisitions we want to do. That will give us a lot more financial flexibility, both in terms of business today and growth.”

Re-banking should be completed by the time CAT readers receive this issue. It should also put Klarius in a stronger position to tackle the changing market. Wilson admits the landscape is tough at the moment: “The UK market is down significantly as a total number. We’ve had a substantial shift as a result of fuel prices where we’ve seen people using their vehicles a lot less. We’ve seen a shift with people skipping service levels on their vehicles.

“On top of that we’ve had a very mild winter with upwards of 30 percent reduction in crash repair business. We are essentially a small island that is mature in this market; all of those influences have come to bear over the last twelve months.”

One of those influences must be the increasing influence of the buying groups and the superfactors. Wilson believes the days of the independent factor are drawing to a close: “If we look at the growth of the factor, the buying group and the strategic alliances that are taking place with factors, the independent parts supplier operating on its own is almost non-existent now.

“The buying groups are finding that they can spend their money in one lump, and they’re looking to do that in the East. A lot of those products are coming into the UK as a result of the buying groups.”

Wilson is quick to point out that although there is some questionable product coming from the East, there is also a lot of good manufacturing. As always, quality control is paramount: “There’s the issue of looking at who you’re dealing with in the East. There’s a significant switch on the buying groups in the market only doing business with reputable manufacturers. The preference is with manufacturers who are European based who can spend a lot of time taking the cost out of the supply chain.”

Klarius itself manufacturers around 60 percent of its own product, though Wilson is keen to grow that figure: “I would like to see us getting to the
80 percent manufactured product mix by 2014, because a major acquisition can bump that number up substantially.

“There always will be a proportion of the product that we don’t manufacture. We have the distribution platform that means we can benefit almost by having free distribution for some of the factored product that we bring on board.”

Acquisitions could well be on the cards then, but losses are equally likely. “We stopped doing brake manufacturing recently,” says Wilson. “We had a manufacturing plant in Italy that really was not economically viable. That’s because it was purchasing its castings in from China and then it was precision machining the product in Italy before distribution. That doesn’t work in reality. It doesn’t mean we have exited brake disk manufacturing, we’ve mothballed the plant and we are distributing a factored product.”

A shrinking market?

Klarius' manufacturing facility

Klarius' manufacturing facility

For factors at all levels margins on commonly-sold products are decreasing. It’s something Wilson sees as being inevitable: “What the current economic market has shown is that there is a cost versus price scenario. That shows that once you start looking at carrying a full parade of parts and once you look at the cost of trade in terms of letters of credit and paying for product that is in progress or on the water, the price differential between those products is quite marginal.”

In terms of market growth, Klarius is keeping a keen eye on rotating electrics: “Our water pump output from the North Wales factory is four times the volume it was when we purchased the company,” says Wilson. “It’s been a massive success story for us.”

“Stop-start technology puts a great strain on starter motors. You used to start your engine and run it just once. The
reality is now that on a single journey your engine can start
50 times or more.”

Emissions, naturally, is where QH and Klarius is going to make its real money. With what Wilson estimates is a 55 percent market share, Klarius recently made the move to handling all of its emissions product directly. There can be no better way to ensure quality than doing it yourself.

Still, Wilson is already seeing the market shrinking substantially: “I don’t see every factor carrying emissions parts in the future, it takes a lot of shelf space and there’s a lot of parts. It’s difficult to stock, and it doesn’t give the margin that some other areas can do from having smaller shelf space.”

We’re increasingly seeing factors making those decisions, favouring one market over another in search for the greatest profit potential from the minimal investment.

However, Wilson reckons that for those emissions suppliers who can afford to stick around in the market, the sector will become one

of the profitable niches that sees suppliers – and their customers – do well.

For those worried about the supply of QH and Klarius products to the market, Wilson has a simple explanation: “Our banking position and our change in banking has put a significant strain on the company in terms of funding growth everywhere else. That in itself has led to some shortages in supply out to our customer base.

“Trying to get a perfect balance has caused us to cock up on a couple of occasions, and that has hurt some of our customers.

“I don’t want to paint a black picture of our supply chain because that’s just not the case. But say if we had ten product lines going out to a customer, I could guarantee that one or two of those lines would be under stretch and they won’t necessarily be the same product lines in every case.”

There is hope though – Wilson believes that re-banking will put Klarius in a stronger position for the rest of the year: “Our supply rate will vary, but if it was taken as an average we are probably in the high 80s, and I want to be in the high 90s.

Wilson is optimistic that even the UK market, given time and investment, can begin to recover: “The shape of the market is getting better. If we went back two and a half years ago when we acquired QH, there is less debt in the company now than before we made that purchase. The reality is that two years on our debt is down to single figures and it’s a very positive outlook. What we do is profitable.”

The dragon lives on

The dragon lives on

It may be profitable now, but the process has taken considerable effort: “QH has taken a lot of time and money in turning the business around, it needed significant investment in the infrastructure of the business, and it hadn’t developed any new products. It needed its ranges bringing up to speed which is always a costly exercise. We also needed to improve its European distribution.

“The UK operation needed a change in terms of the stock holding it was carrying. Overall we needed to work hard to get a synergy going between the two companies.”

When the same rumours keep coming round it is understandably frustrating. One of the big bones of contention with Klarius taking control of
QH was the contract with distribution company Caterpillar Logistics: “When we purchased QH the old owners had entered into a ten year contract with Caterpillar Logistics. I have to say it was a horrendously stupid contract. It was expensive and nobody in their right mind would have signed it.

“There is still five years to run on it. However, let’s be realistic. This wasn’t a surprise to us, and we factored it all in before we bought the company.

“We knew all the details, and there’s no surprises in it to us so why so many people keep quoting the figures to us like it’s something we weren’t aware of I don’t know.”

Wilson does lay one major aftermarket rumour to bed. Would he get rid of QH just to get out of the contract? “I wouldn’t,” he states. “I don’t think that would be right.”

recovery and the future

When the market does recover, Klarius won’t be standing still. Wilson has already set his sights on the next target. As with so many multi-national suppliers, the way to grow in the new aftermarket is to go European: “We’re currently running with 75 percent of our sales coming from outside the UK. We were down three percent in Q1 and when times are tough it forces you to look at everything in your company.

“In mainland Europe, where we have a very small market percentage, we’ve got an awful lot more to go at.”

Klarius might find itself scrapping for percentage points with so many other suppliers, however. Wilson isn’t the only one to have seen gold in the European hills.

If you needed proof that Klarius is ready to grow, look no further than a recent article in The Sunday Times placing Klarius sixth on a list of the top ten manufacturers with the fastest growing international sales. “It is wonderful for employees and people in the company to see recognition like this. Are we going to sell more exhausts this week because of this list? The answer is: no. But it’s lovely to see people recognised for what they are doing.”

“I’m not sure where the rumour mill will come out on this one,” jokes Wilson, “but we’ll probably find that I own The Sunday Times as well.”

You heard it here first, folks.

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UK vehicle production stalls in August

UK vehicle production stalls in August

Paul Everitt

Paul Everitt

Vehicle manufacturing numbers fell in August but are still up overall in 2012 according to new figures from the SMMT.

Car output fell by almost nine percent in August, but remains over 12 percent up over the year to date. Meanwhile CV output rose by 18 percent this month despite falling over five percent on the first eight months of 2012.

The figures also reveal that around 80 percent of all vehicle component types can be sourced from UK suppliers. In total the UK automotive supply chain generates £4.8 billion for the UK economy.

Interestingly too, more than 70 percent of UK suppliers manufacture their products in the UK.

SMMT Chief Executive Paul Everitt said: “Continued weak demand in Europe is a concern, although significant new investment and stronger demand from better performing global markets will ensure UK output continues on an upward trend.”

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CAT factor lives: A to Z Autoparts, Berkshire

Ian Wagstaff dons his overalls for a day at this factor.

The phones are already ringing at 7am

The phones are already ringing at 7am

It’s 7.10am and Michelle Windiate has arrived at the Thatcham branch of A to Z Autoparts to open up. Adi Howson is already waiting to be let in and is quickly upstairs to man the phones. “You can walk in and they will already be ringing.” Meanwhile, Michelle checks the board and starts to load her van, one of 14 operated by A to Z. By 7.40am she is ready to leave for her scheduled run to Hungerford. The remainder of her day will be reactive, taking her anywhere in A to Z’s catchment area. “It’s quite varied,” she says.

The rest of the staff arrive at various times until all are present by 9.00am. Dan Fisher has the front shop opened by then. Dan is normally one of the six that operate the phones, but the August holidays mean that there are only three today and he is filling in downstairs. Adi has been joined by call centre manager Paul Stout and by Rob Eley. Paul has been with the company for 17 of its 26 years. About five years ago its owner, and present managing director Shane Benzie joined Group Auto and now has two outlets, the other in Reading, both now displaying the group’s livery.

Shane started the day at the Reading branch for a chat with the Manager before driving to Thatcham, bringing with him the banking and paperwork. He checks in with Paul and Marie Wale, who normally works in the call centre but is today running the warehouse, before spending the rest of the morning out of sight speaking to suppliers. By 1.00pm he has left us to liaise with Andy Maloney from Bradbury Equipment. A to Z is installing an MOT bay in a garage at Hungerford and the pair are measuring this up. It’s all part of a one-stop-shop offer that Shane is eager to promote.

The phone calls to the centre are continuous. Rob reckons the last couple of weeks have seen an increase in business. “There seems to have been a turnaround.” Quite why this is nobody seems to know.

Downstairs there is also a small but steady stream of customers proving that the DIYer is not totally dead. However, this is a proverbial iceberg tip. Retail is a small part of A to Z’s mix and the prices naturally reflect the fact that the trade customer is the more important. “We make a big effort to show there is a difference,” says Shane. A to Z’s approximately 400 trade customers naturally vary in size and some of the smaller may call in to the retail area to pick up product. Two sets of coil spring are sold in quick succession, some KYBs to a casual without an account and then a regular collects an ordered set of Kilens for a Peugeot 306 diesel.

Dan observes that the retail counter has its fair share of old car enthusiasts, which is where his colleague, Retail Sales Manager Dave Kiely is in his element. Dave, on the vans today, rushes in at about lunch time, loads up and is off again.

The non-account customers not surprisingly include those buying components for “a mate in the trade” to fit. One of them comes in wanting a CV joint for a BMW M3. “Inner or outer?” asks Dan. “What do you mean?” responds the customer. Dan draws him a picture.

The real business, though, is being done on the phones in the call centre. The banter indicates the relationship Paul and his team have with their customers. Although on counter duty today, Dan also picks up the phone to make it easier for those upstairs. If it is not a contradiction, the call centre can go mad but there is a relative sense of calm. “A controlled environment,” observes Shane.

Following the almost continuous business of the day, perhaps there is going to be a let up in the final hour before 6.00pm. No chance, this is perhaps the busiest time of the day and you can see why. There are still the three of them left manning the phones. Last minute orders and requirements for the first runs of the following morning come flooding in. There will be plenty for Michelle to load on her van come the morning.

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Are you breeding loyal customers?

Make sure you're not turning customers away

Make sure you're not turning customers away

This is the time of year to quell any unrest and make sure your customers are staying loyal, says John Genge.

At this time of year any good business person will be considering the coming year and what might face their company.  Budgets, plans, forecasts, whatever you call them if you don’t do them, you’re in big trouble.

Last year I wrote about budget preparation for 2012. I’ve just re-read it and the content is still as relevant today as it was last year so I urge you to pull out last year’s CAT and read it again (you’ll also find it online at catmag.co.uk now).

This year, however, I want to concentrate on a specific area and that is your sales budget. This is not a difficult area, but it does need to be done thoroughly. Many managers that I have worked with prepare a sales budget like this:

Current year to date sales value + a forecast for the last remaining months + inflation prediction for next year = Next years budget.

Some might add a market growth or decline factor and even make adjustments for new customers gained and old ones lost – this process is called incremental budgeting. It’s OK, but I don’t think it’s scientific or searching enough.

Zero base budget method

I urge you to use the zero base budget method. It takes a little longer, and is a little more complex, but if you do it properly it will not only give you a better and more accurate budget, it will also identify areas where you have performed poorly and what you need to do to improve.

Each of you will have a sales ledger and some systems will have detailed sales history by customer. Whatever you’ve got, get out a report to cover the last 12 months and identify sales levels customer by customer. Do the same for the previous 12 months and straight away you can identify:

-            Your biggest customers

-            New ones that you have gained

-            Those that you have lost

-            Those with whom you have significantly increased sales

-            Those with whom you have significantly lost sales

the devil is in the detail

There are some that reckon they know this information off the top of their head, but I reject that. The devil is in the detail, and very often memory gives a distorted view of reality. Please, do the exercise and highlight the major changes both good and bad.

Then you need to ask some questions. Why did you gain that business? Is the growth just short term or will it be long term? Why did that customer defect from you? What else can you sell that customer? And so on. You must ask searching questions and be prepared to be self-critical. Don’t kid yourself, don’t blame others and don’t just curse the economy. There are still people out there making money and growing their business.

set targets for each client

For the top 80 percent of customers, at least, look at their business, their buying profile and their likely supplier needs. From that information work out a detailed plan of what they should reasonably expect to buy from you. Then set out a strategy to determine what actions you need to take to

achieve this. Do you visit them, offer them better terms or walk away? You will need to do something dynamic, otherwise little will change for the better. You might need to ask them what they like or dislike about dealing with you. Don’t be frightened. Of course they will tell you that you’re too expensive, they always do, but there will be other reasons why they choose to come to you or not.

For the remainder, don’t just ignore them. I would still ask, why are they peripheral customers? Why do they buy so little? Is it because of what we are, what we do or in spiteof all of that?

There will always be a reason. You will never get all of the business because, frankly, other good operators will be out there. If you take this approach, you will know the reasons you are succeeding or failing, however, and be able to make decisions on how to overcome the failures.

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Automechanika – Showing off the best of the aftermarket

The show attracted thousands of visitors

The show attracted thousands of visitors

So that was our first Automechanika.

Apart from our Publisher David Harris the CAT team had never visited the aftermarket show before, and truth be told we didn’t know what to expect.

Now we’re back and, blisters aside, we’ve had a great time. Walking through hall after hall we talked to aftermarket representatives from all over Europe, and while there were a few murmurs of discontent from some stands the overall mood was very positive.

We heard about plenty of major deals being done at the show. One national UK distributor, for example, signed a new distribution agreement with an Italian firm on the third day of the show. If you needed proof that events like Automechanika are worth attending, there it is.

The next issue of CAT will be packed full of information and news from the show, so look out for it landing on your doorsteps soon.

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IAAF takes over Right 2 Choose campaign

IAAF takes over Right 2 Choose campaign

The campaign's website will be re-designed

The campaign's website will be re-designed

The IAAF is taking over management of the Right 2 Choose campaign, having previously only provided administrative support to the group.

The move is the result of campaign supporters asking the IAAF to take over. A statement from the group says the move addresses several concerns raised by members which together have led to a dilution of activities.

As part of its increased support the IAAF will help the campaign with increased consumer awareness and a re-designed website. The campaign has also announced its intentions to actively support those garages which can help to bring the message of Right 2 Choose to consumers.

IAAF Chief Executive Brian Spratt said: “IAAF is convinced that the independent marked needs R2C as a tool to help attract and educate motorists to their rights to have vehicles serviced wherever they choose, and not to be misled by dealers’ scare tactics.

“We are happy to assume the management role, but this is a campaign for the whole of the aftermarket and we welcome support and assistance from all in the IAM.”

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Andrew Page announces £3 million investment in CAF

Andrew Page announces £3 million investment in CAF

CAF branches benefit from refurbishment

CAF branches benefit from refurbishment

Andrew Page has announced a £3 million investment in its latest acquisition, Camberley Auto Factors.

Since taking over the factor chain in July, Andrew Page has announced a number of changes geared at improving customer service and stock availability.

Plan for the investment centre around refurbishment, with CAF benefiting from new systems and processes. Branches within the chain will be upgraded with new racking systems and similar investments in IT systems and equipment hope to improve efficiency and enhance customer service.

Andrew Page Managing Director Mark Roberts said: “The investment confirms yet again our desire to become one of the UK’s leading parts distributors. The investment is proof of the commitment to customers that Andrew Page will deliver quality replacement parts together with an enhanced added value service”.

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