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DIGRAPH TO OPEN 16 NEW SITES

DIGRAPH TO OPEN 16 NEW SITES

CV factor Digraph is set to open 16 new branches in the next six months as part of a growth strategy described as ‘aggressive’. This will be in addition to several acquisitions of similar businesses and expansion of existing branches.

The move follows significant investment in the company by Euro Car Parts as well as Sukhpal Singh Ahluwalia and James Rawson. The expansion could create and create 164 jobs.

The new outlets are in various locations across the UK, stretching from Glasgow to Crawley. At this point it is unconfirmed if the new locations will be from LKQ’s existing portfolio, newly acquired sites, or a mix of the two.

The strategy doesn’t seem to phase the management team.  Sukhpal Singh Ahluwalia commented: “Locations, stock and logistics are relatively straightforward – indeed we once opened 12 Euro Car Parts branches in a single day. Our challenge is to find the right people and partners to join us in delivering our vision of market-leading customer service … nationwide. We are building our new branches around the best team players”.

“We are shaking up the industry in other ways too, with major investment in stock ranges, accelerated delivery speeds and added-value programmes, as we continue to build the UK’s most powerful team.”

Branch expansions and upgrades are happening in Gloucester, Northampton, Nuneaton and Stoke. The Northwich branch is relocating to larger premises in Ellesmere Port which will greatly increase stock holding and give improved deliveries to the customer base.

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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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IS BANNING DIESEL BAD FOR THE ENVIRONMENT?

IS BANNING DIESEL BAD FOR THE ENVIRONMENT?

Scrappage Scheme

Evidence suggests that a rise in petrol registrations is contributing to global warming

Diesel-powered vehicles have been in the news a lot over their environmental performance, or lack thereof. Conversely, industry experts have warned that a clampdown on diesel vehicles could result in the UK actually missing European environmental targets.

Mike Hawes, Chief Executive at SMMT warned that demonising diesel conversley will have an adverse effect on the environment. “Customers are not moving straight from diesel to electric. They’re moving to petrol or staying put in older cars” he said when speaking at the Society’s annual dinner in December. “So we’re seeing a falling market, declining revenues, rising costs, rising CO2. And, yes, this will have an effect on climate change goals. This is not a policy without consequences”.

Data firm CAP HPI has authored a report which concludes that the EU’s 2021 environmental targets could be missed if the percentage of diesel vehicles continues to decline on UK roads.

The report points out that some of the environmental criticism of diesel vehicles is misguided.

All the countries in the report achieved the 2015 CO2 emission target for cars registered in that year. While France and Italy were comfortably below the 130g/km line, the UK is closer, and Germany only cleared the hurdle by 1.4g/km.

UNACHIEVABLE
Matt Freeman, Managing Consultant at CAP HPI and the report’s author, commented that without continuing sales of diesel engine cars, this target reduction is unachievable: “Hitting the 2021 environmental targets for CO2 reduction would be a significant challenge without the likely decline in diesel. Therefore it is imperative that diesels continue to command a substantial share of the new car marketplace.

“If consumers, with no option of transitioning to hybrid or EVs, switch to petrol the environmental impact is clear – their CO2 emissions would likely rise between three percent and 23 percent according to model.”

The report argues consumer education is key as there is an apparent risk that consumers are being led to believe that ‘all diesel is bad’ and that any suggestion that there is a good diesel option is due to the automotive industry seeking to resist change and preserve the status quo. This level of miscommunication needs to be countered if diesel is to have a short- to medium-term future.

SKEWED
However, the media coverage on diesel is, to say the least, skewed against the fuel no matter what the improvements and consumers are confused. At the aforementioned SMMT dinner, Greenpeace crashed the stage to hand VW boss Paul Willis a faux ‘award’ for ‘toxic air’ and coverage in the mainstream press has been hardly less hostile. This has resulted in drop in demand (by about a fifth) in new registrations for diesel powered cars and new registrations for light vehicles as a whole are down 5.7 percent compared with last year. This has lead to several analysts making doom-laden predictions about the future of new car retail through franchises coming to an end entirely. These might be a little wide of the mark, but it does seem that for a private motorist wanting to upgrade to the latest technology, the idea of a conventional powertrain must seem a bit old fashioned.

Most people reading this might wonder why they should care, after all, surely this is a hole that the VMs have dug for themselves? It doesn’t affect the aftermarket… Unfortunately, it does. Tens, if not hundreds of thousands of vehicles won’t go through trade auctions and back into the aftermarket as the VMs are holding their own versions of scrappage schemes. As far as I know, no-one has made a serious attempt to retrofit otherwise efficient Euro- 3 onwards common rail diesel engines with devices to clean up their carcinogenic soot, meaning that they are replaced with petrol vehicles that are only marginally less toxic, but will emit greater quantities of greenhouse gas. Meanwhile, the face of the retail motor industry as a whole is besmirched by the failure of the VMs to get a grip on this situation which is a real pity for all involved.

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A NEW CHAPTER FOR ANDREW PAGE

A NEW CHAPTER FOR ANDREW PAGE

Steven Frost and Shay Allen

Of all the places that I thought might be my first visit of the year, a new branch of Andrew Page didn’t seem likely just a few months ago.

But things change, and so today, I’m standing at a shiny shop counter in a new branch. There are displays of tools and accessories with a number of brands and a small screen with a noisy infomercial for something called Gorilla Glue on a loop – something which I suspect will get old very quickly for the staff.

The stockroom, loaded with parts across two levels, is just as clean. Incredibly, building the mezzanine plus racking the whole branch and filling it with stock was achieved in just a week, according to Regional Manager Steven Frost, who was there to meet me along with Southampton Manager Shay Allen and Interim Marketing Manager Richard Swan.

Admittedly, this is not an entirely new branch. There was already a satellite of the Southampton branch in Eastleigh that needed to move or be closed as the lease was up and the landlord wished to redevelop the building. At the same time, parent company LKQ had a recently vacated building that had previously been a JCA Coatings counter, so it seemed logical for one business to move into the empty building.

RATTLING PHONES
However, don’t think that this is nothing more than a re-site. The sales team that manages customers around Eastleigh and Winchester are to move from Southampton into a bright new telesales office upstairs at the Eastleigh branch, and the team have plans to increase the headcount in order to win some new accounts.

“You get closer to your customers when you are in a standalone branch” Steven Frost emphasised, “But in a satellite branch, you become a bit disengaged as your customers don’t know that you’re up the road. So part of the investment is to get more people in”. This will likely include an extra van or two (there are currently six) and possibly extra people to handle the increased pareto and anticipated rise in orders.

The problems faced by the management of Andrew Page have been covered ad infinitum in CAT, but from a customer point of view the main issue has been inconsistent supply and ever-changing brands on the shelf. “There’s nothing worse than having to ring a customer back and tell them that you can’t get something” said Frost, adding that as an ex-ECP man, he breathed a ‘sigh of relief ’ when he heard that LKQ were behind the takeover, because he knew that range and availability would no longer be an issue.

So, is this branch a new start for the hundred year-old factor? “That’s certainly what we’ve been told” said Frost. “There are more moves and openings planned as [LKQ] want to heavily invest in this brand and move it forward. It hasn’t moved as quickly as we wanted, because of the CMA thing, but straight away this is what we want to do”.

NEW BUSINESS
Branch Manager Shay Allen believes that filling gaps in existing accounts and winning new business is entirely possible, due to the good and personal relationships the team have with individual customers. This trait goes back to the days of Camberley Auto Factors which several team members worked for, prior to being bought and rebranded by Page.

“It absolutely comes down to the relationship between the garage and the factor. If there is one thing that sets us apart right now it is people, and the knowledge and level of skill that they have” said Allen.

This is emphasised in the firm’s attitude to outgoing sales calls. Rather than badger people on the phone with an offer of screenwash or whatever, the sales team will prefer to visit customers to make sure they are happy with everything the factor is doing, and looking to see if there are any gaps that can be filled.

That isn’t to say that there aren’t challenges to this expansion. Both MPD, GSF and GAU are active on the patch that the branch wants to take more of as well as the ‘friendly’ competition from the local ECP. Nonetheless, the shiny new branch sends out a clear message to the aftermarket: Andrew Page is back and open for business.

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CAT AWARDS HELD IN MANCHESTER

CAT AWARDS HELD IN MANCHESTER

The sky cleared and the sun shone for the 2018 CAT Awards, sponsored by Automechanika Birmingham, held in the Lowry Hotel in Manchester for the second year.

Over 120 aftermarket professionals gathered to enjoy the networking lunch and to find out who scooped a trophy.

The winners are as follows:

Large Garage of the Year (sponsored by Haynes Pro): Motoserv UK

Independent Garage of the Year (sponsored by Euro Repar Car Service): AAK auto Services

Retailer of the Year (sponsored by Haynes): Wrexham Motoring Supplies

Factor Team of the Year (sponsored by Breck): Bridgend Motor Factor

Factor Chain of the Year (sponsored by Boswell Insurance): AutoParts UK

Supplier of the Year (sponsored by PG Automotive): NGK

Outstanding Achievement (sponsored by Noco): Terry Wainwright

 

Full coverage of the event will be included in the March issue of CAT.

CAT Awards Winners 2018

 

 

 

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PREMIER MOTOR FACTORS GOES INTO ADMINISTRATION

Walsall-based parts supplier Premier Motor Factors has gone into administration.

 Timothy Frank Corfield has been appointed as the official administrator, and an auction of the firm’s assets and stock will be held from February 26 through auctioneer Deeley Matthews..  

Stephen Doyle started the company (officially called Direct Wholesale Europe) in August 2008, right at the start of the recession. The company had a strong online presence, with eBay being a particular strength. However, recent feedback suggests that it struggled to fill orders in the past few weeks, and the administrator was called in just before Christmas.

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TEN ANDREW PAGE BRANCHES CLOSE FOLLOWING ‘OPERATIONAL REVIEW’

Ten branches of Andrew Page have been closed.

Carlisle and Ellesmere port closed last week. Cardiff, Peterborough, Kettering, Shrewsbury,Chesterfield and three others closed on Monday. Calls we made to affected branches diverted to a nearby Euro Car Pa

Andrew Page Kettering closed on Monday.

rts.  Meanwhile, managers from other branches took part in conference call on Tuesday.  

In a written statement, a spokesman for ECP said: “We can confirm that we have closed 10 Andrew Page branches, following the completion of a recent business operational review by the Andrew Page Management team.  There are no plans to close any further Andrew Page branches. We are currently working with employees at affected branches to look for alternative options within the ECP or Andrew Page network, and working closely with customers of these affected branches.”

Andrew Page was bought by the parent company of rival Euro Car Parts in 2016 immediately after the former went into administration. Following a lengthy investigation by the  Competition and Markets Authority, nine depots were proscribed to be closed in the interest of not ‘significantly reducing competition’

Interestingly, none of the branches closed over the past week were on the CMA list. Liphook, Scunthourpe, Wakefield and York were on the list, but remain on the company’s depot finder.

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CHARGING UP BUSINESS MARGINS

CHARGING UP BUSINESS MARGINS

There are plenty of battery charger brands out there, but how are firms standing out from the competition?

Noco Genius series

Consolidation is the buzzword of our industry at the moment, but it isn’t just reserved for the factor groups, suppliers are part of this trend too. “There has been a lot of consolidation of battery brands with only a few major players left in the market.” said Gary Vincent, Sales Manager of American battery charger firm Noco.

While battery brands are shrinking, he says the opposite is true of chargers, “In terms of battery chargers, there is an increasing number of battery charger brands entering the market from the far-east with little actual battery charging experience and just looking to make quick money on places like Amazon,” he said, adding that this has had a knock-on effect on product quality and safety in the marketplace.

TRAINING
To maintain quality standards and be one of the ‘go-to’ brands for battery chargers, Noco has heavily invested in a number of marketing initiatives, technologies and training programmes to maintain customer retention while providing new clients with the technical know-how to up-sell its chargers in store. “Technical training forms part of the Noco on-boarding process for new customers so they can confidently advise and sell across the range,” said Vincent. “We see a continued trend towards lithium-ion batteries in all markets, and all of our chargers contain a specialised lithium charging mode. However, most competitors focus on their attention on charging fast, whereas we focus on return of capacity whilst restoring the specific gravity to optimal level, which can sometimes lead to slightly longer recharge times.”

The design and packaging can also bring many plusses to retailers stocking them as Vincent highlights: “Our chargers and packaging is extremely compact, which typically saves retailers upwards of four times in retailer footprint. These not only allow retailers room to add additional SKU’s, but also saves on logistical costs.”

NEW PRODUCTS
Taking a slightly different stance on battery charging is Swedish battery charger firm CTEK. As previously mentioned in CAT, the firm recently introduced its ‘CT5 Time To Go’ device, which informs users when their battery is fully charged, through a series of LED lights that monitor the state of charge of the battery. The tool is used in conjunction with the firm’s new ‘Battery Sense’ dongle, which tracks the vehicle’s battery health. The concept behind this was to encourage more motorists to check their battery regularly in order to prevent further breakdowns, particularly during the colder months when this component is at its most vulnerable. Sten Hammargren, Consumer Business Unit at CTEK, elaborated: “The Battery Sense tool is easy to install and data is delivered through a free to download iPhone or Android App. Battery Sense means no worrying about charge levels or when to charge; providing valuable information about the vehicle’s battery in a simple, user-friendly way.”

In addition, the maker is conducting ongoing training sessions for factors and distributors via its Skillsbase programme, allowing them to gain a thorough understanding of the firm’s wares. This is further supported with marketing materials such as product sheets, brochures and promotional films for additional advice and guidance. “Understanding how our products can be used to meet the needs and demands of the end user is a strong factor in choosing the right products to generate sales opportunities”, said Hammargren, “Our Skillsbase programme is helping our customers to gain comprehensive CTEK knowledge and develop essential skills and understanding to maximise profit margins.”

In a similar vein, Banner Batteries is raising awareness and the importance of battery chargers and maintenance to its retail network in the form of ‘visually appealing’ display units and marketing materials including a pocket guide leaflet for its Accucharger range. Lee Quinney, Country Manager at Banner, elaborated: “Developed to ensure that modern lead-acid batteries attain their anticipated long service life through regular and necessary equalisation charges, each Accucharger is more than capable of powering up any starter battery easily, fully automatically and safely. In addition to their functionality and suitability for all 6/12V lead acid batteries, they are appealing in terms of their design aesthetics and have already been widely adopted by Banner’s distributors and their customers.”, he concluded.

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THE RIGHT PART GOES BEHIND WHAT FITS

THE RIGHT PART GOES BEHIND WHAT FITS

The rules around replacement parts are complex, but worth getting your head around, writes BM Catalysts Commercial Director Mark Blinston.

While there might be more hot air than hard facts about emissions across the mainstream press about vehicle emissions, there can be no doubt that reducing toxic gas and restoring trust in the motor industry is the greatest problem faced by the trade at the moment.

Everything is geared towards reducing emissions and much of the emphasis seems to be pointed towards vehicles and how we can reduce the impact that they are having on air quality. You may be wondering what we can do about it in the aftermarket; but one thing we can do is making sure the right part is fitted to the right vehicle based on the emissions standard of the vehicle in question – the Euro level.

Vehicles and replacement emission control devices must meet specific standards for exhaust emissions before they can be offered for sale in the European Union. Emissions limits are commonly referred to as Euro standards or levels.

Emissions are measured using a standardised test cycle called the New European Driving Cycle (NEDC). The NEDC was last updated in 1997 and is gradually
being replaced by the World Light Test Procedure (WLTP), which is designed to better replicate real driving conditions. WLTP is now being applied to new vehicles (types) but does not yet apply to replacement parts.

In order to test the durability of each part emission test results are most frequently multiplied by a deterioration factor; with the adjusted result then compared to the legislative limit. Deterioration factors are designed to simulate the likely change in performance of the part after it has aged with use over time. These deterioration factors have become more stringent over time, and so when coupled with the gradual lowering of limits it becomes considerably harder to achieve a pass when testing newer parts and newer vehicles. The largest increase in deterioration factors occurred between Euro four and Euro five.

In order to meet higher emission standards, it is frequently found that the OEM part is made to a higher specification than the lower EU level part it has superseded. Legislation requires a comparison of performance between a replacement part and its OE equivalent and so it naturally follows that tougher standards + higher deterioration factors + higher performing OE parts = a real need for a higher specification replacement part.

RIGHT LEVEL

The Euro level of each vehicle prescribed at the point at which that vehicle is Type Approved. A replacement part cannot be approved to a lower Euro level than that of the original vehicle; so if the vehicle is Euro five then the replacement must be approved to Euro five levels/limits. Testing and approving this part to Euro four would mean that it cannot be proven that it meets the relevant emissions standards and therefore cannot legally be fitted to any Euro five vehicle.

There are many catalytic converter and diesel particulate filter (DPF) references that appear to be physically identical but are, in fact, designed and approved for vehicles that carry different Euro levels. This is made possible as the internal specification of the part is largely the key to the emissions performance of the vehicle. For example, the Euro five version of the close-coupled cat for the Citroen C1 requires a specification that is more than 3 times that of the Euro four version of the part. A similar story is true of the Euro four/five Fiat five00 and Ford KA. Quite apart from it being illegal to fit the Euro four version to a Euro five vehicle, it will cause poor emissions performance with a much higher chance of related vehicle issues and potential part warranty returns. It can be easy to source the cheapest product which isn’t necessarily approved to the correct Euro level – the consequence of which is then a part that will actually not perform to the standards required.

CATALOGUE
The correct cataloguing of aftermarket parts is complex and challenging and many consumers will not be aware of the Euro level of their vehicle. It is therefore down to the garage and parts distributor to ensure that the part that is being sourced is approved for sale to the correct Euro level of the vehicle in question. This is something that has recently been identified as a “problem” in the aftermarket whereby parts can be physically the same, catalogued with the same start and close dates yet be very different both in terms of the internals and what they are legally approved for sale to fit.

In an effort to reduce the number of occasions that the incorrect part is being supplied and fitted to the vehicle, MAM (Autocat) will shortly be introducing the Euro level as a search criteria when identifying the correct part for a particular vehicle. Manufacturers of catalysts and DPFs will be asked to submit the Euro level for which their part has been homologated to enable an accurate match upon lookup. This is a positive step that the aftermarket is taking to reduce vehicle emissions.

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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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