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AUTOELECTRO AND CAAR SIGN DEAL

AUTOELECTRO AND CAAR SIGN DEAL

A supply deal has been struck between Autoelectro and accessory parts retailer CAAR.

The partnership will see the latter take advantage of Autoelectro’s extensive portfolio of remanufactured starter motors and alternators including its surcharge-free non-exchange (NEX) units. In addition, the former will be rolling out its recently-launched Active Inventory Management System (AIMS) to CAAR’s supplier base; allowing them to maximise their chances of returning old core as well as keeping close tabs on any outstanding surcharges owed,  following the company’s new pricing strategy.

Tony Bhogal, Managing Director of Autoelectro commented: “Having held discussions with senior staff at CAAR, we have agreed a competitive package for its members, to ensure they and their workshop customers receive the best value-for-money but premium quality product available”, he continued: “CAAR members will have access to the best range and availability of rotating electrics, along with a free next working-day AM delivery.”

Adding to his sentiment, CAAR MD David Owen said: “We are delighted to welcome Autoelectro on-board as an approved CAAR supplier, and the appointment has been warmly welcomed by CAAR members, many of whom were already using them for their rotating electrics.”

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EPIC ACCESSORIES GETS TRICO VAN

EPIC ACCESSORIES GETS TRICO VAN

New sporty van for Epic Accessories

Wiper blade brand Trico has presented Epic Accessories with a Trico liveried Ford Fiesta van, after the latter achieved its target during the former’s three-month promotion last year.

The vehicle was handed over to Epic Accessories owner Samantha Gutteridge at the A1 buying group’s spring trade show, which took place at the Whittlebury Hall in Towcester last month.

Speaking of her firm’s new addition, Gutteridge said: “The new vehicle will help us on both a promotional and practical level in getting the message out to potential customers that we fit wiper blades in our designated fitting bay at the rear of our store, so a huge thanks to Trico.”

Sam Robinson, Product Manager at Trico, added: “The show was a great success for us, in particular our promotional offer on Neoform retro-fit beam blades, which was well received with a number of members who placed orders for a merchandise box on the day. We also agreed plans with various members to help boost their sales, including supply of in-store signage, as well as training days to educate and support their staff on selling and fitting Trico blades.”

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SUPPLIERS FINED IN RECENT CARTELS

SUPPLIERS FINED IN RECENT CARTELS

Another cartel has been exposed

The European Commission has fined OE suppliers Bosch, Continental and NGK a total of €151M, after participating in one or more of five historic cartels concerning the supplies of spark plugs, hydraulic and electronic brake system components to VMs in Europe.

The first cartel lasted from 2000 until 2011 and aimed at avoiding competition by respecting each other’s traditional customers and maintaining the existing status quo in the spark plugs industry in the European Economic Area.

The second and third related to the supply of various braking components including electronic parking brake systems between 2007 and 2011.

All suppliers acknowledged their participation in these cartels and agreed to settle the
case. Denso was also involved in the first cartel, but was not fined after revealing the existence of its cartel to the Commission. TRW also escaped fines altogether for disclosing the second and third cartels, while Continental avoided charges for one of the two cartels it participated in on the same grounds.

Commissioner Margrethe Vestager, who is in charge of competition policy said: “These cases are about collusion at the expense of car makers. But in the end, any extra costs these carmakers may have incurred could potentially be passed on to final consumers when they buy a car. So our work will help to make sure that those markets work fairly for consumers.” She concluded added: “Today’s decisions are unrelated to our investigation that several German carmakers might have broken EU competition rules. That is still ongoing”.

“We will be active in this area as long as we keep finding companies that hope to
make higher profits by colluding instead of competing.”

Previously, bearing suppliers and air conditioning component makers have been fined under the same anti-trust rules for colluding against vehicle manufacturers.

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EURO CAR PARTS ACQUIRES NEW WAREHOUSES

EURO CAR PARTS ACQUIRES NEW WAREHOUSES

Two sites, similar to this, have been acquired by ECP

Factor chain Euro Car Parts has acquired trade counters in Scarborough and Normanton, Wakefield. The acquisition was completed on behalf of American commercial real estate broker Cushman & Wakefield; however, terms of the deal were not disclosed.

The Scarborough site is now open on Seamer Rd between Howdens and Toolstation, housing 17 staff and six delivery vans within its 3,356 sq ft warehouse. Meanwhile, the Wakefield branch will open in due course on Good Hope Close, located off Pontefract Rd near Junction 31 of the M62 motorway.

“We are delighted to have been able to secure both these sites for ECP, allowing them to expand their presence and better service their ever- growing customer base”, notes Henry King of the Logistics & Industrial team at Cushman & Wakefield. “These new locations are the first of an ambitious 2018 expansion plan
and signify a purposeful and positive start to the year.”

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OIL SUPPLIERS STRIKE DEALS

OIL SUPPLIERS STRIKE DEALS

Lucas Oil MD Les Downey

CV factor Digraph has inked a deal with lubricant firm Millers Oil. The move follows the factor chain’s expansion plans .

“As we continue to support the CV market, we were keen to partner with a company that has an innovative roadmap for growth”, notes Andy Black, Platform Business Manager at Millers Oil. “Digraph has exciting development plans and is recognised for its service and support. We are looking forward to driving innovation together”.

Elsewhere, France-based lube supplier Motul has done a deal with Automotive Brands to distribute it’s passenger car oil range in the UK.

Gunter Steven, Head of BU Sales Export for Motul, said, “To also have the opportunity to work with Automotive Brands to expand our presence in the UK Aftermarket sector was an  exciting opportunity for us both. We are delighted to work together”

Motul was already a sponsor of Automotive Brands’ Power Maxed Racing and prior to the distribution deal had renewed sponsorship of PMR’s Astra touring cars for the new season.

On a similar note, A1 Motor Stores now distributes Lucas Oil products, after the latter received ‘Approved Supplier’ status from the group.

Commenting on this partnership, Lucas Oil MD Les Downey, said: “It’s an exciting time for us. It is a terrific opportunity for us and for A1 members, too”.
He added: “We will be working directly with them to increase product awareness and to boost sales”.

Meanwhile, garage aggregator WhoCanFixMyCar has arranged a partnership with Shell. The website and the oil major will share stand space at the upcoming Automechanika Birmingham. Al Preston, co-founder of WhoCanFixMyCar. com, said, “We’re excited to be returning to Automechanika Birmingham. I’m sure it’ll be better than ever, especially as we’re partnering with Shell”.

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PARTS ALLIANCE OPENS NEW BRANCHES

PARTS ALLIANCE OPENS NEW BRANCHES

SCMF Croydon

The Parts Alliance has opened a new branch under its SCMF brand in Croydon and another one through its SAS Autoparts division in Newcastle. The move comes as part of the company’s growth strategy to reach more garages and suppliers across the country.

The Croydon store will help to serve garages and suppliers in the South East and Greater London areas within its 4,500 sq ft facility, housing 12 staff, two delivery vans and four motorcycles. William Barrett has been hired as Branch Manager who also possesses over 20 years of experience in the aftermarket.

“We’re delighted to continue our branch expansion to establish a true national footprint with a combination of company store owners and a commitment to members and service partners,” said, Peter Sephton, Parts Alliance CEO. “We welcome all our new team members to our culture of systemised entrepreneurship and look forward to giving our customers increased choice and better service driven by our people, culture and technology platform”.

Meanwhile, the Newcastle SAS Autoparts site is headed up by Dave Watts who spent 15 years at Andrew Page’s Brough Parkfossway depot, which is still operating as normal. He is assisted by six members of staff with plans to recruit more employees in due course.

Sephton added: “The opening of two new locations is an opportunity to expand the group’s presence nationally and aligns with our strategic plan to grow in key markets”. Henry Buckley, President and Uni- Select CEO, concluded: “This continues our commitment to have the best customer coverage in the UK through both owned stores and members”.

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FORGE GARAGE FACES ‘UNCERTAIN’ FUTURE

FORGE GARAGE FACES ‘UNCERTAIN’ FUTURE

Forge Garage site

A family-run garage in Kidlington faces an ‘uncertain’ future, after the Oxfordshire County Council announced plans to build six new homes over its premises in an area known to be difficult to re-site businesses.

The Forge Garage has been repairing and servicing vehicles in the village for more than six decades and was established by Fred Beckley of whom was a technician for the RAF in Burma during the Second World War. Now in its third generation, Beckley’s son Alun and grandson Mark are at the helm and have said they’ll continue business as normal despite these challenging times.

Speaking to the Oxford Mail newspaper, Alun said: “We’re not sure what is happening, but we will carry on for as long as he we can”. Readers online have also commented on the newspaper’s article expressing their concerns and support for the workshop. One person under the username, ‘Vocman’ said: “They may have difficulty relocating. I understand many industrial estates refuse to let to ‘mucky’ enterprises such as motor mechanics.”

Meanwhile another user called ‘RJ’, wrote: “That’s rough. I had assumed there was a buyout, no idea the garage was on tenterhooks waiting to see what would happen. I hope any development allows them to keep going or find a better site. Best of luck, gentlemen.”

The firm may have a reprieve as the council had planned to use the now-defunct construction firm Carillion.

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UNION ASKS AA TO CONSIDER ‘DEBT FOR EQUITY’ SWAP

UNION ASKS AA TO CONSIDER ‘DEBT FOR EQUITY’ SWAP

AA faces a tough few years

The GMB union is calling on the directors of the AA to give ‘serious consideration to negotiations’ on converting debts to equity to relieve growing pressures on the day to day operation of the business from having to service the £2.7 billion debt mountain inherited from the private equity previous owners. This follows an announcement by AA on a profits warning and dividend cuts.

On 21st February, the AA announced that profits will be £50m lower than forecast and that it is cutting the dividend from 9.3p per share to 2p. Debts are nearly eight times net free cash flow, an unusually high amount. AA membership figures are also down.

The figures came as AA CEO Simon Breakwell announced a three-year ‘strategic review’ of the business, which included modernising the breakdown service with new IT systems
and connected car technologies, while also increasing the reach of its insurance services.

CAT has seen an all-staff email from Breakwell. In it, he admits that ‘the reality is that many of you are working against the odds’. He mentions the speed of dispatch, stretched patrols and the reliance on third party garaging as reasons why the service has been pushed. He also mentions the legacy IT systems used by the organisation ‘that do not always allow call handlers to access the information they need quickly when dealing with breakdowns’. He adds that these old systems are now being upgraded ‘to allow us to deliver our strategy’.

Paul Grafton, Regional Officer at the GMB union welcomed the sentiments in Breakwell’s email for ‘recognising the pressures staff are facing in the day to day operations of the business’

He added: “Directors need to now face up to and deal with the fundamental cause of the pressures- the £2.7bn debt mountain inherited from the private equity owners.

“When debts are more than two times net cash flows, warning lights flash in any normal business. At AA, the ratio is nearly eight times. It is not sustainable. No amount of hopeful scenarios will make it so. Growing the insurance business, patrols selling more batteries and tyres and in car diagnostics will never fix this”.

“It won’t be easy but AA directors have to give serious consideration to negotiations on converting debts to equity to relieve growing pressures on the day to day operation of the business”.

The news follows a report in last month’s CAT of how the AA announced 100 redundancies and closed a training centre. Despite bad headlines, the AA brand remains strong, topping a poll of the UK’s ‘Most loved brands’ several years running.

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ASA FINDS SERVICING STOP ADVERT ‘MISLEADING’

ASA FINDS SERVICING STOP ADVERT ‘MISLEADING’

Two complaints against aggregator

The ASA received two complaints over claims made on repair aggregator Servicing Stop’s website.

One complainant, who believed that Servicing Stop continuously charged the ‘sale’ price for their services and that the savings were therefore not genuine, challenged whether the savings claims quoted within the ads were misleading and could be substantiated, while the other complaint challenged if the prices were misleading because their vehicle required a specific oil with VM approval that incurred an extra charge.

On the first complaint, the ASA looked at a series of complex savings offered on the website that were promoted as being ‘up to 60 percent off’. In response, Servicing Stop stated that at certain points throughout the year, they ran sales during quiet periods. It provided the ASA with dated and undated invoices showing the price history of the Kia Sedona vehicle servicing. It said that the period of time for which the new lower discounted price was available was not longer than the period of time that the item was listed for at the previous higher price.

It provided a spreadsheet of the sale dates for the servicing of the Kia Sedona and Honda CRV vehicle models over a six-month period from April 2017 to October 2017. There were variations between the ‘previous’ prices stated over this period. Its data showed that the Honda CRV services were on sale for a total of 37 days over a six-month period and the Kia Sedona had a sale period of 41 days over the same six-month period. It explained that there were fluctuations between the previous prices due to the many variants in price between the number of makes multiplied by the number of postcodes.

The ASA disagreed, noting that the ‘previous’ price varied when the discounted price remained the same. It told Servicing Stop to ‘ensure savings claims are genuine’. However, on the price of VM specific oil, the ASA noted that the aggregator put a disclaimer in saying that the price of such oil can vary. As a result, it was not in breach on this complaint.

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RETAIL TRADE FACES ‘UNCERTAIN FUTURE’

RETAIL TRADE FACES ‘UNCERTAIN FUTURE’

New car registrations continue to fall

The UK’s motor retail and parts industries face an ‘uncertain future’ as the number of firms in ‘significant financial distress’ according to a new report.

The research, published by insolvency firm Begbies Traynor shows that both new and used car dealers are having a very hard time as new registrations continue to fall. Interestingly, the firm cites a glut of used cars on the market as one of the reasons for used car dealer’s distress, rather than the number of pre Euro-5 vehicles taken out of the market as a result of scrappage schemes offered by various VMs.

Over the past year, the level of ‘significant distress’ for used car dealers rose by a third to 1851 dealers, compared with the same period in the previous year.

Julie Palmer, partner at Begbies Traynor, said: “Consumers up and down the country are tightening their belts in the face of rising inflation, increased interest rates and real wage pressures, causing households to put the handbrake on spending on big ticket purchases, and encouraging many to hold on to their vehicles for longer”.

“Even those owners looking to upgrade their vehicles are struggling to do so, as a recent glut of second hand cars on the market continues to depress the value of second hand motors while making new vehicles and their hefty price tags even less appealing”.

New car dealerships fair little better, with consumer confusion regarding diesel legislation and a lack of electric infrastructure keeping would-be car buyers away. Worryingly, the findings chime with the results of a KPMG survey released at the same time that predicts over half of all dealerships in the UK could close within eight years, leading a number of dealer principals and other motor industry executive to state that the only way these businesses can survive is to convert to a used car dealer and/or repurpose to becoming an independent service garage (see page 5).

FINANCIAL HEALTH

The Begbies Traynor findings were published in the firm’s Red Flag alerts, which monitors the financial health of UK companies. It warns that a number of macro-economic pressures last year contributed to this considerable increase in distress, with the combination of rising inflation, stagnant real wage growth, a weak
pound, political uncertainty, November’s rise in interest rates, and the ever-tightening credit environment putting increasing financial stress on businesses across the country. As a result, 258,349 UK businesses ended the year in a position of negative net worth, while a further 154,251 demonstrated a ‘worrying increase’ in their working capital deficit.

Palmer added: “When the overall business environment is so challenging, unfortunately there can be few real winners, however certain sectors of the economy are certainly feeling the pinch more than others. In particular, the vast UK support services sector saw a spike in distress as their stretched customers reined back spending. The construction industry saw the lowest levels of optimism in five years while the real estate sector felt the full impact of the increasingly stagnant UK housing market”.

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