Archive | March, 2016

ASA TELLS PADDOCK SPARES TO CHANGE WEBSITE

ASA TELLS PADDOCK SPARES TO CHANGE WEBSITE

~lg-asa-logo-580x358ADVERTISING watchdog, the ASA, has ruled that Land Rover parts specialist Paddock Spares has gone beyond the boundaries of fair representation by presenting ex-VAT prices as the main cost of an item with the inclusive price in small numbers underneath.

The ASA found this unacceptable. “Given its greater prominence, we considered that consumers were likely to understand that that was the price they would be able to achieve, whereas that was not the case,” said the ruling. “In addition, while the prices were labelled as ‘ex-VAT’ and ‘inc-VAT’, we considered that was not sufficient to make clear to whom each claim was addressed, and in particular that it did not constitute the VAT-exclusive price being clearly addressed to business customers.”

“We were also concerned that the VAT-exclusive prices were not accompanied by a prominent statement of the amount or rate of VAT payable, as required by the Code.”

The ASA has ordered that the site must be changed to give both prices equal prominence.

Posted in Latest News, News, UncategorisedComments (0)

CLOCKING STORY GETS INDUSTRY REACTION

CLOCKING STORY GETS INDUSTRY REACTION

Mileage correctionA newspaper has carried out an investigation into so-called ‘mileage correction’ companies. The Sun paid half a dozen companies around the country to reduce the mileage on vehicles. Each firm had a disclaimer that mileage correction could not be used for profit, but all agreed to change the odometer on an ‘ask no questions, tell no lies’ basis.

The investigation pleased Sue Robinson, Director of the National Franchised Dealers Association “We are encouraged to see that The Sun has carried out an investigation into companies offering odometer adjustment services” she said, adding that an EU proposal to outlaw such companies ‘does not do enough’ to combat the issue.

However, there is a fear that tight regulation will do noting to deter criminals and make work harder for technicians and could be used by VMs as a way for VMs to excuse ‘locking out’ the independent sector.

One commenter on the newspaper’s website observed: “A car’s dashboard reading should never be trusted. A buyer should always ask to see the service history, stamped service book, service, repairs and tyre invoices and all MOT certificates”.

Interestingly, it is franchised dealers that have the most to gain from a ban. It is believed that the fastest growing area for mileage fraud is nearly new vehicles on lease hire schemes, where the keeper can be fined up to 50p per mile over the agreed mileage.

Posted in Latest News, NewsComments (0)

RENT, LEASE OR BUY?

Adam Bernstein – What is the most efficient way of getting your hands on new kit? The answer might just surprise you

Adam Bernstein

Adam Bernstein is a freelance business writer, specialising in management, marketing and law

No matter the size of business or the sector you operate in, you will, from time to time, need to acquire assets or capital equipment such as vehicles, computers or other machinery just so that you can operate. The question is how you pay for them. Do you use cash to save on paying interest, but deplete your reserves? Or do you rent or lease the equipment but with, of course, the inbuilt charges added on by the supplier?

There are advantages and disadvantages to all three options. Part of the mental mathematics relates to the term of any lease or rental agreement and the expected life of the item being acquired. Too long a term and it’s entirely possible that an asset that needs replacing before the agreement is completed, the result being a dent in your cashflow as you need to finance two pieces of equipment at the same time.

BUYING OUTRIGHT

As with anything, buying outright is generally always the cheapest option, especially if you have cash on one side that can be spared or if you consider ownership important. However, capital expenditure of a significant value when compared to the size of your business will undoubtedly have an effect on your short term cashflow. Simply put, there may well be circumstances where the wiser move is to rent or lease rather than buy outright.

Another consideration is that you may need some form of bank borrowing – an overdraft or loan – to fund the purchase. While bank finance can be hard to obtain, an overdraft should be avoided if for no other reason that it may be withdrawn at short notice with early repayment of loans demanded – this can present a clear hazard to cashflow and even the continued existence of the firm.

By buying, rather than leasing, you may not be able to take advantage of the economies of scale that the lease or rental company can secure. In other words, the unit cost of the device will cost more even though you may pay no interest. But there is another potential pothole. Buying on your own initiative could involve missing out on any product knowledge and experience that a leasing or rental firm may have built up over time. They have no vested interest in what you buy (only in that you buy). The equipment seller, in comparison, would have an interest in what you buy and at what margin they can make.

There’s also the problem of matching the purchase with the timing of income (unless, as we’ve seen, you can buy from reserves) which may put cashflow at risk. Lastly, buying outright means that you will be responsible for the maintenance and repair of the asset. Your own views on risk will determine your attitudes to breakdown or replacement.

HIRE PURCHASE AND LEASE ARRANGEMENTS

As we’ve seen, paying cash for a purchase means depletion of cash which could be used elsewhere. The alternative is paying on installment. But with interest on any hire purchase and lease agreements as part of each payment you will pay more for the asset in the long run.

Also, with leasing you may never own the asset outright (although some lease arrangements, cars being a good example, let you buy the asset at the end of the agreement for an additional final amount). The key benefit of a lease is that you can replace equipment without the expense of buying newer models or having the later problem of disposal.

Hire purchase, on the other hand, allows for you to legally own the asset once all the payments have been made.

One important calculation in the ‘lease, rent or buy’ decision making process is a comparison of the interest rate applied by the finance company, the interest likely to be charged by a lender on a loan or overdraft arrangement, and the interest that can be earned by having cash on deposit. It’s also important to note any other additional fees which may be levied on an agreement as well as the costs of breaking an agreement early.

TYPES OF LEASE

Leases come in a number of variants and you need to consider which is most suited to your circumstances and the item that you are seeking to acquire. For our purposes we’ll consider finance leasing and operating leasing – the two main types.

Finance lease

With a finance lease you are effectively paying to use the item over its useful life – typically three years plus – after which you have the choice of selling or scrapping the item or paying a nominal rent for it. The leasing firm generally will not want it back. This is because the leasing company will recover the full cost of the equipment, plus charges, over the period of the lease through your payments (usually monthly). The benefit to you, the user, is that you do not have to worry about any of the maintenance and insurance issues relating to the item.

Operating lease

Some equipment can have high maintenance costs, become quickly outdated, or is only used occasionally – computers and other IT equipment for example. These items are prime candidates for an acquisition via an operating lease.

Operating leases can offer great benefits if asset is not required for the whole of its useful life. Lower costs follow because at the end of the lease the item will revert to the leasing company for re-lease elsewhere. Again, maintenance and insurance matters relating to the asset will not be your responsibility – these will belong to the leasing company.

Leasing or renting assets has a number of advantages that include improved cashflow because there’s no need to pay up front for an item; a higher level of equipment can be specified because the cost can be spread over time; budgeting is easier as costs and interest are fixed over a given period of time; income and payments can be matched over the lease agreement; the burden for breakdown risks belongs to the leasing company; and equipment can be upgraded for a small fee (whereas owning outright means a sale and purchase process).

But as there advantages of leasing and renting, so there are disadvantages to consider.

The first to note is that agreements usually demand a deposit and/or some payments being made in advance. As you will effectively be borrowing from a firm with a profit motive, renting or leasing will be more expensive than buying outright. Further, by taking on an agreement you will be locked into an  inflexible medium or long-term agreement, which may be difficult, or at least expensive to terminate. and of course, leasing means that you do not own the asset, although you may be able to buy it for a lump sum payment at the end of the term. Lastly, many leasing companies require their customers to be VAT registered.

TAX CONSIDERATIONS

VAT

Rent, Lease or Buy? HMRC has specific rules on how tax reliefs are applied when acquiring business assets and these vary depending on whether you buy them outright, or on the type and length of the lease. This also affects whether VAT will be charged upfront or periodically.

The first thing to note that the cost of renting or leasing an asset is deductible as a business expense so this can reduce your overall tax bill.

If you expect to own the asset at the end of the lease or hire purchase period, you will have to pay VAT on the whole value at the start of the contract. If you are VAT-registered and want to reclaim VAT and sell the asset, you may have to account for VAT on the selling price. You may also have to account for VAT on the value of the asset if you give it away for free.

If you will not become the owner of the asset at the end of the agreement, you will find that VAT will be payable periodically. (For leased vehicles, the right to recover VAT is restricted).

Capital allowances

When you buy plant, machinery and IT equipment, you can apply capital allowances and effectively deduct a proportion of the cost from your taxable profits. For the first £200,000 of capital expenditure in a year the Annual Investment Allowance (AIA) allows a 100% writedown in the first year. Capital allowances can be claimed if you buy outright, through hire purchase or the item is acquired under a long funding lease (generally a lease of at least five years). In essence you can’t claim capital allowances with shorter leases, but because the lease is a trading expense, you can usually deduct the full rental costs from your taxable income.

TO CONCLUDE

There is no right or wrong answer as to whether buying, renting or leasing an item is the best option. The considerations can be personal and will depend on the likely use, lifespan, cashflow and interest and other charges. As the accounting body, the ACCA, notes: “Don’t let the tax tail wag the commercial dog. 100% relief for AIA may look appealing, but you must look at the wider picture, and whether owning the asset is really best for your long term plans.” Good advice from an accountant is essential.

EXAMPLE

A company wants to acquire equipment for £7500. It can buy it outright or lease it over three  years, paying quarterly. The company’s tax rate is 20%. The capital allowance rate is normally 18%, but in year one, the AIA allows 100% write-down for your first £200,000 of capital expenditure per annum. The example shows that outright purchase is still the lower cost but leasing can be less expensive than it appears and will ease cashflow.

Posted in CAT Know-How, Factor & Supplier News, NewsComments (0)

HALFORDS’ SALES DIP DUE TO WEATHER CONDITIONS

HalfordsHalfords has reported a year-on-year dip in car accessory sales, blaming the mild winter. Overall, figures were down 1.9 percent, however this was partially offset by a strong performance in sales of wiper blades and bulbs as well as continued growth in fitting services.

Bike sales increased by 0.9 percent after a flat couple of years, although there was a drop in the number of cycling accessories sold. Click-and-collect now represents 14 percent of retail purchases across the store.

Chief Exec Jill MacDonald said: “We are pleased with the Group’s performance, given the unprecedented weather conditions. Particularly pleasing was the strong growth in service-related sales and a return to like-for-like (LFL) growth in cycling. We achieved a record day online over the Black Friday weekend, our highest ever day for total sales on December 23 and further improvements in customer service metrics. In Autocentres we achieved a 9th consecutive quarter of LFL growth. I would like to thank our colleagues for all their hard work over the busy Christmas period.”

Posted in Blogs, News, Retailer News, UncategorisedComments (0)

eBay Car challenge

Here’s an interesting press release from eBay:

 

Any car enthusiast that has a restoration project sat in their garage or workshop is invited to enter the eBay Car Challenge.  Hopeful projects can range from a surprising barn find that’s gathering dust, to a prized family heirloom needing funds to get it back to its former glory.

 

The three projects will be chosen by eBay on 3 April 2016, with each restoration receiving £4,000 in funding to spend on over 270,000 live listings of car and motorbike parts and accessories available on ebay.co.uk. The restorers will then have until 3 July 2016 to complete their project.

 

“eBay is the first destination for any car restoration project. The eBay Car Challenge will bring to life the wide selection of car parts and accessories that can only be found in one place, that’s eBay. And in turn will showcase the passion and love of amateur mechanics from across the country,” says Murray Lambell director of retail car parts & accessories, eBay.

To get involved in the eBay Car Challenge, simply email a photo of the car in its current condition with 500 words outlining the restoration project including history of the vehicle and the work that needs completing:ebaycarchallenge@launchpr.co.uk.

 

For more information on how to get involved visit: www.ebay.co.uk/ ebay-car-carchallenge.

Posted in Greg Whitaker's diaryComments (0)

EXPAND YOUR HORIZONS OVER MULTIPLE SITES

Andy Savva: Everybody needs a plan to develop their staff and businesses, but is it wise to consider a franchise or multi-site model?

Andy Savva

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

 

Over the years many people have asked me about the business models of the independent garages I’ve owned. Specifically, the business I get asked about the most is Brunswick Garage, which was conceived, marketed and branded as a main dealer alternative. The question that I was asked most often is: ‘why don’t you consider franchising the model?’

Well, it sounds good, expand the empire, grow the brand and of course hopefully get a better financial return. However, I believe it’s one of the most difficult industries to turn into a franchise. About three years ago a workshop in Coventry opened in a blaze of glory with the stated aim that there would soon be one similar in 25 major towns across the nation.

The originator of this idea was not from within industry but from the world of white-collar recruitment. I remember when the second site was opened I was asked my opinion and I was then as I am now very clear now that it’s practically impossible for it to succeed. To date I think I’ve been proved right as the business in question called in the administrators not long after a third site was opened.

There are too many processes, procedures, and interactions between customers and staff members that you can’t just franchise. We are dealing with emotions and behaviour that just can’t be accounted for. What works in one area of England may not necessarily work in another, there are so many variables and barriers to consider, customer and vehicle demographics, land and property costs differ up and down the country.

Having said that, there is no reason why your ambition should be to only run a single garage. There are a lot of examples of aftermarket business owners who do have garages over multiple sites, often in different towns. Of course there is a crucial difference between being an owner-operator of multiple businesses and developing a model for others to emulate.

However, no matter what your goals are as a business owner, it’s important to review the pros and cons of growing your business in order to hone your vision and assess potential stumbling blocks before they arise. Believe me, owning a multi-unit business is hard work. Below I have tried to highlight some of the key points to consider if you want to expand into multi-site independent garage operator.

MULTI-SITE PROS

  • Economies of scale: When purchasing parts of equipment, you should be in a position to achieve better prices.
  • Marketing activities can be combined: Wider message at a lower cost – increasing brand awareness.
  • Pool of talent: Staff can work between locations depending on need.
  • Reduced management: One manager could be spread over two or three sites.
  • Equipment sharing: There is the possibility of sharing specialist tools and diagnostic equipment – depending what services you offer at different locations.
  • Make money: More profit achieved with multiple sites.
  • Plan retirement: A successful multi-site can attract a larger corporate buyer if an exit strategy is the final objective.
  • Family institution: If family are involved could be easier to expand – families tend to form a grounded and loyal foundation. In built support system. It could bring long-term stability and trust. Having said that…

MULTI-SITE CONS

  • Dysfunctional families: Family businesses can create a lot of challenges too. Difficulties arise when it comes to succession planning, sibling relationships, promotion and leadership. This can result in dysfunctional behaviour affecting business decisions.
  • Increased capital investment: Opening a garage isn’t cheap.
  • Location is critical: Is it easy for customers to get to, and near transport links so they can leave the vehicle with you?
  • Local knowledge: What works in one area may not work in another. It is important to research and understand the customer type and vehicle demographics in that specific location.
  • Common policies: Multi-sites are difficult to manage if you don’t have rigid processes and procedures in place that are clear to all staff members.
  • Pay grade: It can be difficult to manage staffing levels and correct management structure with the right pay incentives.
  • Reputation spread: Poor customer service from one site can affect another site.
  • Cost control: Managing costs across several locations not easy. Controls need implemented. Cost can spiral out of control if other sites are not successful.
  • Personal touch: With attention divided amongst other locations there could be a distance created between stakeholders and staff.
  • Increasing difficult to attract competent, skilled staff – inherent with our industry.
  • Finding staff: It can be hard enough to get the right people for one site, let alone multiple locations.

Whichever way you may decide to take your garage – there are pitfalls and benefits in all camps – single site, multi-site and franchise. Ultimately it will come down to the desires and ambitions that you set yourself.

You can find out about Andy’s consultancy services by contacting savvaautomotive.com

Posted in CAT Know-How, Factor & Supplier News, Garage News, NewsComments (0)

ANDREW PAGE ACQUIRES SOLID AUTO

ANDREW PAGE ACQUIRES SOLID AUTO

rsz_solid_auto_-_buildingAndrew Page is set to become Britain’s leading distributor of Japanese and Korean car parts after acquiring a specialist rival. The  Leeds-based business has bought Solid Auto  for an undisclosed sum.

The factor believes the acquisition will  strengthen its sourcing capability in China and the Far East. Chairman Jim Sumner said, “Birmingham-based Solid Auto has established a very good reputation as a specialist supplier over the last three decades”.

Mark Price, MD of Solid Auto said: “I am confident there will be significant benefits across the group given our expertise in Far East sourcing and detailed understanding of the market.”

“I believe there is a great cultural fit between Andrew Page and Solid Auto.”

Japanese and Korean cars make up around 20 per cent of the UK car market.  Sumner added: “We are actively pursuing a differentiation strategy. Our key brands are increasingly differentiated from what competitors are offering and acquiring Solid Auto drives that further. Our goal is to be the UK’s leading specialist Japanese and Korean car parts player.”

 

Posted in Factor & Supplier News, latest news, News, special news, UncategorisedComments (0)

NEXUS DISCUSSES UK AFTERMARKET

Around 200 aftermarket suppliers met buyersNexusUK at the Nexus Business Forum held in Montreux, Switzerland in February.

The Nexus organisation was founded a couple of years ago by 14 European car part distributors, including the UK’s Parts Alliance. Describing itself as a ‘value focussed alliance of aftermarket leaders’ it has already achieved a total consolidated turnover of €7.25 billion in 2015 and has plans to extend this to €9 billon by the end of the next accounting period.

With sums of money this large floating about, it is perhaps no wonder that suppliers were only to keen to get a plane to the magnificent Montreux Palace hotel to engage in complex ‘speed-dating’-style sessions with the buyers. The event left plenty of time for less pressured networking and discussions as well.

In addition to the business meetings a plenary session was held to discuss the nature of the aftermarket including threats and opportunities that would likely happen over the coming months.

The event was well attended by many well-known aftermarket faces. We spotted Peter Sephton and Stan West of The Parts Alliance and GSF respectively, while on the supply side we met Laurence Bleasdale of TMD Friction, Nigel Cole from Denso and Andreas Habeck from Hella among many others.

We were particularly interested to note that an Iranian company, Alborz Yadak Trading, were among the companies competing for the attention of the buying groups. Iran has had a large manufacturing base for decades, but has been unable to trade with Western companies for years due to sanctions. Now diplomatic relations are open again, it will be interesting to see how products from the country are received into the aftermarket over the coming years.

There was also a panel discussion on the threats and opportunities that the connected car can bring.

Gael Escribe, Chief Exec at Nexus described how the reach of the organisation was to cover parts trading over the whole world. “Our vision is for one aftermarket and for Nexus to be a leader and not just a challenger” he said, reminding the audience that since foundation the organisation had achieved 59 supplier contracts and that places such as China that have traditionally been thought of as simply places where parts are made are now starting to consume components from around the world for their domestic parc.

Posted in BlogsComments (0)

THE LAST UNDERSUPPLIED AREA

Jonathan Davies discusses the launch of the first CMF factor branch in Gwynedd

Stockroom ProductsIn these times where there seems to be a factor branch in every other industrial unit across the land, it comes as a surprise that that there are still parts of the UK that are undersupplied. However, this was the experience of Jonathan Davies, an entrepreneur from the Welsh village of Bontddu, Gwynedd.

With the closure of the local Unipart Automotive branch, the closest parts factor was 30 miles away. Davies decided enough was enough: “Once Unipart went that was it,” he said. “There was only CES but their prices were expensive. All the local garages and everybody was complaining because there was no competition within a 60-mile radius and that’s what made us go for it. As the old saying goes, if you can’t beat them join them”.

The new Clogau Motor Factor’s (CMF) branch comprises five 20ft-shipping containers along with a 25ft office unit, stacked on top of one another. We were intrigued to find out where the inspiration for this eccentric design came from: “We were waiting for a property to become available but we couldn’t find any in the area” said Davies. “My friend Mike Webb from the Car Buying Group said he knew a guy from Bristol who trades out of shipping containers and is doing very well. That’s how we decided on the layout”. Apart from being a factor CMF is also a retail shop and as Clogau Motors, is also a garage with MOT bay.

Davies needed an extra pair of hands and bought in Paul Merrick as Branch Manager. Merrick is one of Clogau Motor’s experienced MOT Testers, carrying 10 years of service at the garage. “Paul was happy just cleaning and valeting cars at Clogau Motors, but I thought he was too clever for this. After some convincing, he has transitioned over to Branch Manager and is doing well – he’s been really nailing it”, responded Davies.

PRODUCTS AND SERVICES

Merrick and the rest of the staff were required to complete a four-day training programme, learning the new MAM software. Davies explained Products and servicesthat the system has played an important role in organising the stock within the shipping containers while increasing customer accounts: “It took us a while putting all the stock on the system, but it’s good system I have to praise it. We also have an alliance with the Car Buying Group and a website with them. The Click and Collect service with the CBG has slowly built up our private customer accounts and is growing organically”. The system also caters to the general public who want to purchase spare car parts, Davies elaborated: “A lot of people are coming in and buying bulbs and wipers. People are more and more trying to service their cars themselves to save the garage expenses”.

The branch has got off to a good start with the recent purchase of their second van and the opportunity to increase the fleet to as many as six vans later this year. CMF currently hold 46 trade accounts stocking products from brands including ALCO Filters, Varta Batteries, Juratec brake discs and others.

Since the doors opened for business, the branch has secured a great amount of support from local garages and agents along the coastline: “The business is growing more and more every week”, Davies explained: “We’re getting more people not just trade customers but also more private customers now as well. People are having to travel 30 miles away to Aberystwyth to their local car parts place, so we’re getting more and more of them as well”.

FUTURE PROOF

Stocked-up Shipping Containers Planning ahead, the factor chain discussed their future business goals: “As Paul says to me, we are growing organically. We’re not like the big
chains, but we’re starting slowly. We don’t get deliveries from FPS everyday whereas a lot of other factors do. If the business grows, what we hope to achieve next year is going from little containers to a purpose-built unit for the place”.

The distributor hopes to expand its delivery radius to 30 miles. However, Davies believes this could be an issue because of changes in the vehicle parc: “You’ve got to remember that we’re very rural. We’re in Snowdonia. The closest drive is half an hour to the supermarket, and an hour drive to your closest McDonalds. We’re being very careful building up our stock to suit the vehicles we’ve got in the area”, he concluded.

 

Jonathan Davies And Paul Merrick

VITAL STATS

CLOGAU MOTOR FACTORS

LOCATION:  Bontddu, Gwynedd

MANAGER:  Paul Merrick (Pictured right with Jonathan Davies)

STAFF:  4    VANS:  2

FASTEST MOVING LINES:  Oil filters, car batteries, braking

Posted in Factor & Supplier News, Garage News, News, Out and About with CAT, UncategorisedComments (0)

LEGISLATION LOOMS FOR SUPPLIERS

Neil Pattemore – The Spectre of type approval for many more aftermarket parts looms large but is it safety issues or the VMs lobbying politicians that drive this change?

Neil Battemore Business Analyst at XEN Consultancy and FIGEFA representative

Neil Battemore
Business Analyst at XEN Consultancy for the aftermarket

Let’s talk about Europe. Recently the aftermarket’s offer of replacement parts has come under threat from draft European vehicle type approval legislation in Brussels. This draft legislation contains proposals aimed at ensuring that vehicles continue to comply with their original type approval requirements throughout their life, by approving replacement parts to ensure that they function to the same standard as the original parts used when the car was originally manufactured.

You might argue that the MOT test is there to verify that a vehicle and its systems continue to work correctly, that it’s safe and secure, with acceptable emissions levels, but this is not how TA parts and components would be checked.

TYPE APPROVAL

To be fair, there are some key replacement parts that already need to be type approved. You’ll know most of them: windscreens, tyres, headlamps, catalysts, DPF’s and brake parts. These are all marked with an ‘E’ mark to show that they meet type approved requirements (the number after the ‘E’ denotes the EU Member State where the type approval was conducted – e.g. 11 is the UK). However, the legitimacy of the ‘E’ marking is the responsibility of the workshop that fits the part – who if challenged, needs to be able to show an audit trail from their parts supplier back to the original manufacturer’s certificate to prove that the part is legitimately type approved.

For just about every other part or component of the vehicle, many of which are not so easy to inspect, there is no current requirement for ‘E’ marking or any form of direct assessment. If a part is replaced and the vehicle remains safe, secure and roadworthy, it is perfectly acceptable.

It is not that the aftermarket has stopped offering quality parts and components – in fact it is just the opposite – there is probably more competition and choice of quality parts than ever before, but that simply being able to offer various parts and components is now coming under threat, even when some parts or components are of a higher specification than the vehicle manufacturer’s original parts. OEM parts and components are made to a price, not necessarily the highest possible specification.

The background to this issue is partly coming from the vehicle manufacturers who consider that although they are subject to type approval, aftermarket parts are not and this is deemed unfair. It is also emanating from ‘L-Category’ legislation – which is motorbikes, where there is a wish to control the (unregulated) replacement performance parts but in doing so can also impact the emissions, noise or safety of the bikes.

REAL THREAT

Meanwhile, VMs conduct ‘whole vehicle type approval’ which includes all parts and components fitted to the original vehicle, for the aftermarket this is much more difficult and expensive – each replacement part would have to be tested for each of its applications, meaning not only finding examples of the actual vehicles, but also the test centres that can conduct the type approval testing.

This creates a real threat to the aftermarket parts suppliers, who at best will have to comply with significant and burdensome type approval test requirements, but there is also a significant cost attached to this process. The result will be fewer and more expensive parts.

Critically, there is a huge question over the ‘proportionality’ of this proposal – there is little evidence that aftermarket replacement parts and components create any significant safety or emission issues. Additionally, if they did not fit and work correctly, then the vehicle would not function or perform correctly and may fail an MOT.

TILTED FIELD

The claim is that by type approving aftermarket replacement parts it creates a level playing field between the vehicle manufacturers and the aftermarket parts and components suppliers, but I don’t see it that way – the European legislators seem to have been swayed by arguments from the VMs that the type approval of replacement parts is necessary – but this seems to ignore the point that the vehicle manufacturers have the most to gain and that it will ultimately be the consumer who suffers through having a reduced choice of more expensive replacement parts.

To enforce this type approval requirement, there is a proposal to conduct ‘market surveillance’ on replacement parts and components, although it is not yet clear exactly how this may be conducted, there have already been ‘dawn raids’ on parts distributors in some European countries.

These proposals in the revised type approval legislation have been vigorously challenged by FIGIEFA (the European association of spare parts distributors), who have claimed that these proposals are both unnecessary and disproportionate. Additionally, they will create unfair competition, rather than resolve it and will raise costs with little proven benefit. At worst, it will increase costs for legitimate European manufacturers, whilst obliging repair workshops to buy original parts from their local dealer – undermining the competitive choice of the aftermarket and increasing consumer costs. Just remind me – who will benefit from all of this?

So supporting one of the aftermarket organisations that help FIGIEFA fight this challenge is more important than ever – your future choices are worth fighting for.

You can find more about Neil’s aftermarket consultancy at: xenconsultancy.com 

Posted in CAT Know-How, Factor & Supplier News, Garage News, NewsComments (1)

Advertisement
  • What do connected cars have in store for the aftermarket?
  • Battery Store: What are suppliers planning this winter?
  • Suspension, spark plug and charger plants visited

more info

    • 'Electric vehicles will disrupt the aftermarket as we know it' Agree?

      View Results

      Loading ... Loading ...
    • Popular
    • Latest
    • Comments
    • Tags
    • Subscribe