Archive | February, 2016

SAS AUTOPARTS ACQUIRED BY PARTS ALLIANCE

SAS AUTOPARTS ACQUIRED BY PARTS ALLIANCE

Peter Sephton

Parts Alliance Group CEO Peter Sephton

Business group The Parts Alliance has swelled its ranks with the acqusition of SAS Autoparts. Terms of the deal were not disclosed.

SAS was founded in 1960 and has branches in Harrogate, Otley, Skipton, Bradford, Castleford and Northallerton.

The Parts Alliance’s Chief Executive Peter Sephton said he was excited to be welcoming new colleagues from SAS to the HgCapital-backed group

‘’SAS Autoparts is a great business with outstanding customer and staff loyalty providing local service in the Yorkshire area and adds to our national strength’’ he said.

HgCapital continues to support The Parts Alliance with the acquisition of SAS, which will be a wholly owned business within The Parts Alliance Group but will continue to trade locally under its own brand name and will continue under Managing Director David Brooks and his current management team.

Peter Sephton added: “This is a great acquisition which strengthens our presence in the north while encouraging a common vision and culture, but retaining local brands, entrepreneurial spirit and customer focus.”

David Brooks said: “We are looking forward to working with Peter Sephton and the rest of the management team and developing and growing SAS into an even better business.”

 

 

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CAT AWARD WINNERS 2016

CAT AWARD WINNERS 2016

We would like to start off by saying a big congratulations to all our winners and nominees who took part at this 2016CATAwards005year’s CAT Awards. It was a great turn out with 150-strong aftermarket professionals attending the awards at Twickenham Stadium to support CAT and their businesses.

Greg Whitaker, Editor of CAT, commented: “It was great to see so many people take time away from their businesses to celebrate the best of the industry, although I had to cover my ears for some of Paddy’s racier stories!”.

We were luckily enough to have aftermarket legend Paddy Hopkirk drop in to share some funny anecdotes of his automotive career spanning over 60 years. As usual, Hopkirk always loves to leave a lasting impression and this time he left our aftermarket guests in fits of laughter.

Simon Albert, Event Director for Automechanika Birmingham, provided an exclusive update on the first Automechanika UK launch and the reasons for launching at the NEC in 2016.

Some of you may already know that Brake Engineering won ‘Supplier of the Year’, but we don’t want to give too much away on here. The rest of the winners along with the full coverage of the CAT Awards 2016 will be announced in the next issue.

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AP RACING WINS PATENT CASE

In a landmark legal case, brake caliper manufacturer AP Racing has been awarded £570,660 in damages, costs and interest following a ruling that rival firm Alcon Components Limited infringed the company’s patent protecting a concept for motorsport brake calipers.

As the highest ever level of damages awarded in the Intellectual Property Enterprise Court, the case centred on a range of brake calipers introduced and patented in 2007. This design was used by teams in Formula 3, NASCAR and subsequently Formula 1. However, rival Alcon Components introduced a similar design in 2009.

Following an initial trial in 2012, and a subsequent hearing in the Court of Appeal in 2013, a ruling was made in January 2014 confirming that the patent was valid and infringed, allowing the UK based company to pursue financial compensation and stop Alcon manufacturing more of the calipers.

Commenting on the award AP Racing managing director, Charles Bolton, said: ‘Innovation is vital for the development of new technology, and patent infringement is always an uncompetitive answer. The Court’s decision sends a clear message to the industry that the courts will not tolerate intellectual property infringement’.

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‘LEVEL PLAYING FIELD CLOSER THAN EVER’ SAY IGA

shutterimageA level playing field in the battle for access to information will leave franchised dealers vulnerable to losing more service business to the independent garages – which is no bad thing according to the RMI’s Independent Garage Association.

The IGA say that it has done surveys that shown independent garages taking an increasing market share of service work, despite the difficulty carrying out certain functions. This limitation will soon be removed, allowing independents to carry out every part of a service and repair for their customers.”

IGA Director Stuart James commented, “The IGA has worked tirelessly to see this legislation through, and RMISC is positioned to be the first certification body for this type of information in Europe.”

“This is the largest change to the current structure of the UK motor industry and professionally run, independent garages will flourish”

“It has been advantageous for independents that the franchised sector has not picked up the gauntlet of genuinely meeting consumer needs in terms of price and quality. This new change will allow independents to seize the opportunity, take the initiative and increase their share of service and repair work even further” he concluded.

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DENSO ESCAPE FINE IN CARTEL SCANDAL

DENSO ESCAPE FINE IN CARTEL SCANDAL

DensoThe European Commission has imposed fines of € 137 789 000 on Melco (Mitsubishi Electric) and
Hitachi for participating in a cartel for alternators and starters in breach of European antitrust rules.

Denso was also involved in the cartel, but not fined as it revealed the existence of the price fixing to the Commission. All companies acknowledged their involvement and agreed to settle the case.

For more than five years, the three Japanese car parts manufacturers coordinated prices and allocated customers or projects with regards to OE alternators and starters. Although contacts associated with forming and running the cartel took place outside the European Economic Area (EEA), it affected VMs in the UK and mainland Europe who brought directly from the companies.

Commissioner Margrethe Vestager in charge of competition policy said: “Breaking cartels remains a top priority for the Commission, in particular when they affect important consumer goods, such as cars. Today’s decision sanctions three car part producers whose collusion affected component costs for a number of car manufacturers selling cars in Europe, and ultimately European consumers buying them. If European consumers are affected by a cartel, the Commission will investigate it even if the cartel meetings took place outside Europe.”

The investigation revealed that between September 2004 and February 2010 the companies met at each other’s offices and in restaurants, and were in contact over the phone on a regular basis, in order to limit competition between them. In particular the three companies:

  • Coordinated their responses to certain calls for tenders issued by car manufacturers, in particular with respect to determining the price at which they would tender and who should win the specific business;
  • Shared out certain vehicle manufacturers and projects between themselves in terms of which of the three would supply alternators and starters;
  • Exchanged commercially sensitive information such as price elements and market strategies.

This is not the first time that the Commission has ruled on a cartel inside the automotive industry. In 2014 NTN, Schaeffler, NSK and JTEKT were found to be fixing the price of wheel bearings earning the companies a record fine. Prior to this, another group of companies were found to be fixing the price of wiring harnesses while a further cartel was exposed in among suppliers of seat materials.

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DON’T DIG A TRENCH, BUILD A RELATIONSHIP

Andy Savva There is a time and a place for promotions, but don’t let it be at the expense of your existing customers

Andy Savva

Andy Savva Savva has run various large independent garages and has been a troubleshooter for underperforming franchise workshops. comment@haymarketcom

One of the biggest mistakes I see regularly within the independent garage sector is the constant advertising specifically in local press with ‘come and get me’ offers in order to attract new business. Most of these already established business whether large or small will rarely measure the effectiveness of such campaigns or analyse the type of customers they are attracting and indeed very few of these business actually understand the gems that already exist within their database.

UNTHINKING DECISION

Lack of thought is given to how an existing customer may feel if he or she saw an offer that was never offered to them, after being a loyal customer for a number of years – a real kick in the teeth. We’ve all seen big corporations like Sky TV, Vodafone, and the utility companies offering far better terms for new customers than any existing customer can get. In my opinion this form of ‘transactional marketing’ does not work in the independent garage sector as it does not lead to long term loyalty and leads to these potential new customers hopping from one garage deal to the next one.

There is no point trying to attract vast numbers of new customers and provide them with a substandard service based on a cheap price that can cause severe damage to the reputation of the business. Another factor is that established customers tend to buy more and are less price-sensitive and might be less likely to defect due to price alone.

RELATIONSHIP MARKETING

You have to focus on what I call ‘relationship marketing’ – a form of communication with your existing customers that comes in many guises. However your own database and the gems within must always be your starting point. It also builds a platform were the business and its customers are more likely to be able to adapt to each other’s needs and reach agreement quickly and easily. So by actively getting emotionally connected and regularly engage with your existing customers will only enhance the trust and loyalty you build with them.

Simply by reminding customers of when their vehicle’s MOT expires or of their next service due date is the minimum that any independent garage should be undertaking. Reminding them of specific campaigns such as winter checks or health checks if they are planning long journeys will reinforce that you care about them and keep them safe. By expanding this two-way communication with news of any success stories within the business, such as: charitable fund raising by the business or any employee, training & development that’s undertaken, new services/products introduced will reinforce to your customers that you want to build long term relationships with them.

This strategy will help you constantly create a small influx of new customers through recommendations as appose to constantly advertising for a field for new ones, you will also greatly improve the chances of providing and exceeding the high level of service they expect, because you will not be swapped with a high level of new customers rushing to take you up on those “come and get me offers”. Therefore, this promotes another selection of new clientele that hopefully continues the cycle and improves the long -term implications for continued growth. Your existing customers will become your advocates, your marketing angels.

Quite simply, customers are the organisations most important asset (along with staff too) without them, it cannot exist. To survive, prosper and possibly expand the business, the aftermarket business owner must continue to acquire new customers but more importantly must never neglect existing customers or take them for granted.

Constant database management will build-up trust and personal knowledge with your customers, which creates a far more effective customer retention tool, which in turn, will find you more gems in the form of customers that come back time after time.

You can find out about Savva’s consultancy services by visiting: savvaautomotive.com

USE REPEAT BUSINESS

Winning repeat or additional business from existing customers is far easier than constantly hunting for new business – although successful operations will do both.

Don’t think that contacting existing customers has to be an arduous or time-consuming exercise. These days there is software available to send a text message, email or even prepare a physical letter to send directly to your customer. Some garage management systems such as Motasoft or SWS GA3 provide a facility to send such reminders, so the reminders can be set up to be sent out in the future when the job is initially booked.

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KIA VERDICT ‘HUGE VICTORY FOR AFTERMARKET’ SAY IAAF

Kia logoThe Supreme Court in Stockholm has dismissed Kia Motor’s petition to appeal against their conviction in

December 2012 for breach of competition in the Swedish market on its seven-year new car warranty.

Under the EU Motor Vehicle Block Exemption Regulation 461/2010, manufacturers have a duty to honour the vehicle’s warranty when it is serviced outside of the dealership, and non-OE parts being fitted onto a vehicle is an insufficient reason for the warranty to be declared invalid.

Kia’s terms outline that it is a requirement that any service is performed by a brand authorised workshop. A Swedish trade body, SBF, reported the VM to the Swedish Competition Authority who agreed the terms were likely in breach of block exemption regulations.

Following this, SBF sued the VM in the Swedish Market Court which then convicted Kia Motors for breach of competition.

Understandably, UK trade bodies were delighted with the result. Wendy Williamson, IAAF Chief Executive said: “The Swedish verdict is fundamentally important; it’s the first of its kind within the EU, and is a huge victory for the aftermarket. It sets an important precedent for the independent aftermarket within Europe.

“The aftermarket has to educate ill-informed motorists about their rights, so it is essential the IAAF is made aware of any block exemption infringements as soon as possible so we can react quickly to resolve them.

“This case is a stark reminder to VMs and dealers to abide by the current legislation. Under these rules, everyone has a ‘Right2Choose’ and car owners are no longer obliged to go to their dealer during the vehicle’s warranty period. We are continuing to do everything we can to promote the regulations to vulnerable motorists.”

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WOODFORD GREEN OPENS A NEW PAGE

Ben Buchannan shows us around the latest branch in the Andrew Page network
Andrew Page Woodford Green

The newest branch of Andrew Page in Woodford Green has thrown up the shutters. In fact, on our visit the doors were wide open for business open in the most literal way as a motor fault meant they couldn’t be shut. Teething troubles aside, we were keen to take a look at the latest branch in Greater London.

As we entered the reception area, staff seemed friendly and professional, dealing with customer queries face-to-face and over the phone. South Divisional Manager Ben Buchanan and Branch Manager Gareth Jones welcomed us, both of whom are old hands in the aftermarket. Buchanan joined AP from Allparts having previously worked for Bosch, Cosworth and even a spell in a Lamborghini franchise. Meanwhile, Jones worked for arch-rival ECP for 12 years before transitioning to Branch Manager for the AP store in December.

Once we ‘d been properly introduced, we were keen to find out how the store has taken off since the launch: “Within four weeks of service, daily rates are up and targets have been met already”, Jones said. “We are hitting between 80 – 100 deliveries a day and I’d expect to double this in the next five weeks”. The warehouse currently operates six agency scooters and four vans delivering auto-parts to independent garages and national businesses across the area.

Stockroom

Andrew Page WarehouseThe 5500 sq. ft stockroom has been reconfigured to include a large mezzanine giving it a holding capability equivalent to 11,000 ft. “We have five miles of shelving running down the warehouse. We have managed to do this because of how we packed the stock”, Buchanan explained, adding that the number of SKUs range between 26,000 and 50,000 as the branch adapted its stock profile for the local area.

However, the fringe between Essex and London is a highly competitive patch – and not one where this factor really had a toehold in the past. Explaining the decision to open there, Buchman said: “We came to the Woodford Green because the main factors are under represented here”. He added that ECP dominates the area and there was a feeling that local garages might buy into the added-value services offered by Page, such as IMI training. There are also a number of the national accounts covered by the firm nearby, including an F1 Autocentre in an adjacent unit and a Kwik-Fit a short dStockroomistance away.

Prior to starting, the Woodford Green staff had to undergo an intense six-week training programme provided by various managers from the company. The store’s training services for their team and external businesses is something thats helped the branch rank against the competition.

As our tour came to an end, we asked the team what they’d hope to achieve by the end of 2016: “The forecast so far is looking good and by the end of February, we hope all our sales guys will have met and established professional relationships with all our customers”, Jones responded.

“We are looking to engage with more independent and national businesses within a five mile radius of the branch. We are not focusing so heavily on products in the spring and summer, but more about releasing as much bandwidth within their business. The more the technicians can do and work on is how they will increase on how many parts they can buy, and therefore buy from us”, Buchanan concluded.

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ROLLS-ROYCE SILVER SPIRIT (1980-1999)

The Rolls-Royce Silver Spirit is the latest car to get the once over on our ramp

Rolls-Royce Silver Spirit

Originally launched in 1980 as the successor of the Rolls-Royce Silver Shadow II and the Silver Wraith II, this range of vehicles would be the flagship vehicles for Rolls-Royce and Bentleys. The Silver Spirit came in four marks over its 20 years in production with the series spawning the Rolls-Royce Silver Spur and Silver Dawn, as well as the Bentley Mulsanne and Eight, before being succeeded by the Silver Seraph.

The Silver Spirit was fitted with Rolls-Royce’s 6.75-litre V8 engine with either a three or four-speed automatic gearbox, depending on the age of the vehicle. Throughout the various marks new complex technology was added to each Silver Spirit, with gas-charged shock absorbers fitted on the Mark I, while automatic ride control was introduced from the Mark II onwards.

PASSIVE AUTOMATICS

The RMI says that issues with the automatic transmission is related to problems with the selection control unit. The gear position is electronic controlled by a transmission control position sensor transmitted by a wire. Higher mileage versions of the Rolls-Royce are the most likely to suffer from this issue.

SO SOLID RIDE

Rolls-Royce and Bentley parts specialist Flying Spares says that when the rear springs on the Silver Spirit lose their pressure, the suspension goes solid leading to a harsh and bumpy ride. The fix is by replacing the rear gas springs, and garages will need to fit the spheres, run the car and check the mineral oil, after which the Silver Spirit will jack itself up and self-bleed.

ABSORBING THE SHOCKS

The RMI says that the Rolls-Royce is prone to the electronic suspension ride control system or one or more of the suspension units failing, which is noticeable by noisy suspension. FPS adds that the heavy nature of the Silver Spirit and soft ride plays havoc with the suspension and shock absorbers. It says tell-tale signs include a soft bouncy ride, and that electronic ride control on early 1990 versions didn’t alleviate the problem.

BLOWING OUT ON FULL LOCK 

Forum RollsRoyceForums.com says that the Silver Spirit has a ‘notorious’ history of problems with its steering rack, which is prone to premature failure, so much so that owners are advised to avoid going to full lock position even if there is no sign of tyre rubbing or clunking. It says that these racks when at full lock are known to suffer from the pressure maxing out and blowing the seals.

NOT AN OTTER ONE

Flying Spares warns that Rolls-Royce Silver Spirits that fail their emission tests due to overheating, will be linked to the black otter switches, which affects the functioning of the fans, clock, windowns, interior lighting and central locking. It suggests trying the otter reset switches located in the glove box.

RUNNING OUT OF BRAKES

The brakes on the Rolls-Royce Silver Spirit are prone to common problems. FPS says that it is common to get marks on the brake discs where the pad is in contact while the car is left standing for long periods. Eventually these marks will lead to brake judder, and it will lead to a four-to-six hour replacement job, with the rear brakes requring a specialist Rolls-Royce hub tool. The RMI says if the brake judder persists after the discs are replaced, this could be down to the soft suspension bushes exaggerating any minor disc runout.

CLUNKING BUSHINGS

FPS adds that clunks heard at the front of Rolls-Royces and Bentleys are linked to front shock bushings and compliance mounts. It adds that the job will take all-day and will require a special Rolls-Royce tool.

WHINGING DIFFS

Flying Spares advises that Rolls-Royces and Bentleys built between 1988 and 1992 are prone to a whining noise being generated from the differentials. It adds that these sounds can affect any vehicle in this production period regardless of mileage covered, and could mean either replacing the differential or requesting the owner puts up with it.

FUEL GAUGE BLOCKAGES

Flying Spares says that if the fuel gauge fails, the way to access and replace the fuel tank sender is via the boot facing panel, which is a drop down screw or plastic clip depending on the age of
the vehicle.

PUMPING UP THE VIBE

RollsRoyceForums.com says that a whine from behind the rear tyre is linked to the fuel pump, and when jacked up it will become apparent quickly whether the pump is vibrating.

BLOCK WEAKNESS

FPS advises technicians to be wary of the Rolls-Royce Silver Spirit’s pressure regulation systems, referred to BRAKE 1 and BRAKE 2, both with their own sensors. On start up the lights should go out after 30 seconds and if they don’t the fault could be linked to a weak accumulator valve block.

UNEARTHING THE ISSUE

Flying Spares says that earthing problems with cars built between 1988 and 1993 are common. The issue relates to the earthing strap between the driver’s side rear engine mount and the chassis leg. The remedy is simple, and involves cleaning the contacts, or alternatively adding a second strap to the nearside engine mount.

ALARM SYSTEMS

RollsRoyceForum.com says that owners complaining about their fob not unlocking their car, therefore having to use the key to unlock it. However, with the car self-locking itself unlocking the car again means the alarm goes off. This problem is linked to the battery leaking onto the alarm’s ECU PCB, which is known to cause the problem. This fault can affect the Silver Spirit and the Bentley Arnage.

ENGINE ANXIETIES

Cambiare warns that the Rolls-Royce Silver Spirits are prone to hard starting and misfires under load due to a faulty ignition coil. While FPS adds that roughness on idle even with the air conditioning and accessories are turned off, and the car is fully warmed up, could be linked to clogged injectors or other engine management related issues.

Next month we’ll be looking at the Fiat 500, so wherever you work in the aftermarket and have some insight to share, we would be delighted to hear
from you.

To get your advice included contact hemal.mistry@haymarket.com

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SUCCESSION PLANNING: WHO SHOULD TAKE THE REIGNS?

SUCCESSION PLANNING: WHO SHOULD TAKE THE REIGNS?

Perhaps you’ve got one eye on retirement – but is handing over your business to a family member the best plan?

Family businessFor those of you who can still remember being a teenager, you may recall thinking that you would never get old, or if you were going to, it was so far off your radar. However, for those of us who are now of a certain age and can’t remember what being a teenager was like, then we are probably also at a point in our lives where planning for some form of retirement has become a consideration.

Time passes and at some point there is the need to consider succession planning. So that the whole unfamiliar process doesn’t come as too much of a shock, I suggest you take an hour or so today to create a time-based action plan that you can come back to at a later point.

To Explain in More Detail

From your current position, look ahead to decide what you want from the rest of your working life, when you would like to step down from running the business and most critically, if there is anyone who you would like to take the business over from you. This may be a family member, or an existing employee, but whoever you may have in mind, it is absolutely critical that you consider their character traits and business expertise as a potential business owner and their ability to address the changing face of the aftermarket.

  • Do not overlook loyal employees who may be able to take on the running of the business. If they are ignored in favour of an outsider, it may cause damage to your business from within.
  • In most cases, it is likely that you will need to realise some value from your business, either as a direct sale to provide a ‘pension pot’, or as an on-going income stream as part of your retirement income. This is where it becomes much more critical to think things through. If you decide to sell the business (which is the ‘cleanest’ option), then there are two scenarios – firstly, sell on the open market where you will simply want to ensure the best price. In this case, work with your accountant to optimise your balance sheet, profitability and good will value at the time you plan to sell to ensure that the business looks as attractive as possible to a potential purchaser.
  • Secondly, if it is sold to a family member, then there are many other considerations. The most critical is their motivation to take over the business, closely followed by their personal characteristics, experience and ability to actually run the business successfully to pay you the purchase price, particularly if this is over a period of time.

I have experienced a successful business being sold to the founder’s son, only to fail through a combination of naivety, incompetence and the burden of trying to pay back the purchase price over the following years – a very real risk in many cases. This is especially important if you expect them to fund your retirement plans as an on-going concern.

Plan and Minimise Risk

If you decide to let a member of your family run the business, then the first and most critical decision is to ensure that this person supports your future plans and if so, that they are capable of taking over being the business manager. I choose my words carefully, in the same way that you must also choose carefully who to consider. You need a ‘businessman, not a just man who works in a business.’

Choose Wisely

If a family member is going to run the business and pay you from future profits, then choose carefully, as unlike an employee, they would be harder to dismiss if they don’t perform. I would propose assessing against the 16 core competencies of the IMI’s Automotive Management Accreditation (AMA) scheme. In the likely event that some areas of their competencies are weak then help is available to support their development needs. This scheme is based on three increasing levels of management competency, providing the platform to support development as their experience levels grow. An initial on-line assessment is available from MIC Ltd, called AMA Trait that includes a one-to-one feedback session to provide a better understanding of the best development strategy.

Finally, there are two other critical aspects to consider. Firstly, even for a family member, ensure that a formal contract is in place which details exactly what the transfer entails and when it will come into effect. This is necessary for complete clarity and to avoid future disputes. Secondly, there are capital gains tax liabilities on any profit you may generate on the sale. Although there is information on the HRMC website (the tax rate varies depending on the level of profit, so it is vital to discuss this with a specialist tax advisor).

Overall, family succession can be a great solution for all concerned, but you may have to live with the consequences – possibly in the most literal sense ­– ensure that you plan carefully and take the necessary legal advice.

You can find more about Neil’s aftermarket consultancy at: xenconsultancy.com and links to topics mentioned in this article: catmag.co.uk/this-issue

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