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DON’T CALL IT A COMEBACK…

It was reported in late April that more than 60 percent of garages had shut their doors as it had become infeasible to operate given the sharp fall in customer demand, disrupted parts supply chain and staff shortages caused by the lockdown. 

Now, though, the lockdown is being eased and UK roads are slowly starting to get busier. Alex Lindley, Managing Director of Nottingham-based garage chain Lindley’s Autocentres, told us how he’s gearing up for the new ‘normal’: “There are a lot of strategic challenges now, including making sure that we increase supply as the demand increases – timing is critical to maintaining the health of the company.” It’s worth remembering that, even if a garage has all staff at hand and a fully operational workshop, there are obstacles to overcome in terms of consistently speedy parts deliveries and maintaining a steady workflow as drivers adjust to post-lockdown life. 

Supply chain

The sustained health of factors and suppliers is a critical component in the aftermarket’s bounce-back. One such business, Chesterfield’s Autosupplies Group, is working hard to return to normality. Managing Director David Clarke said that, although “business dropped considerably” when the lockdown came into force on 23 March, it “has continued to grow steadily”, with the firm recording the biggest increase in call volumes after Easter. Garages were allowed to stay open, having been deemed essential businesses, but the situation was murky for suppliers, as Clarke explained: “Many of our van drivers have been stopped by Police and I would like to thank the IAAF for their support in providing the industry with a letter that confirms we are allowed to remain open and trade.” On 5 May Autosupplies announced that its Chesterfield, Barnsley and Rotherham branches were fully open, and that “teams at all three businesses are well practised in social distancing measures and are adhering to government guidelines, which we kindly ask customers to respect.”

Social distancing could be the biggest inhibiting factor in the build-up to ‘business as usual’. Among many other measures, the Best Practice guide – jointly published by IGA, SMMT, IAAF, Scottish Motor Trade Association and Garage Equipment Association – suggests posters are put up around the workshop or warehouse to remind customers and staff to keep their distance, a one-way system is put in place and sanitisers are always available. Euro Car Parts’ Marketing Manager Colin Cottrell outlined the actions of the factor chain: “We’ve made protective equipment like gloves, antibacterial gels and wipes readily available to all and are regularly cleaning our vans, branches and retail spaces. We’ve also set up Perspex screens on our counters and will wear latex gloves to serve customers and while on delivery routes.” 

Touchy subject

The biggest change for many will be the transition to a ‘contactless’ business model, which Autocentres’ Lindley has found ‘relatively easy’ to adhere to “once the plan was in place”. “The key to its success is to communicate with the customer,” he explained. “You need to make it clear what they can expect and what you expect from them. We are calling the customers the day before, followed by an SMS and an email.” Garage bosses would do well to consider how best to minimise unnecessary contact with customers while maximising workshop space. 

MOT extension

Aside from the critical issue of how to actually run a business, the question that industry bodies are now asking the government is if it will now cancel the universal six-month MOT extension that came into effect on 30 March [the end of the extension has of course been announced since this article was written – Ed]

The IMI’s Steve Nash thinks that although “the motives for the initiative were sound at that time, there are serious risks in the extension remaining in place now”. Chief among these, he said, is that traffic levels are beginning to build as people return to work, and it’s possible that some vehicles will not be in a roadworthy condition. “That’s a huge safety risk, but of more commercial concern for our sector is that if all motorists wait up to six months from when their MOT expired to get their vehicle tested there is going to be a big backlog of tests in the autumn and winter [see Alex Lindley’s predictive chart below] which could significantly overwhelm the sector,” he said. 

SMMT Chief Executive Mike Hawes concurred. “With government advice stating that workers should avoid public transport when returning to work, the use of private cars is likely to rise more sharply than it already has over recent weeks” he said. “A reconsideration of the six-month MOT extension needs to be made as soon as possible”. 

The Independent Garage Association and the IAAF have all voiced similar statements and written to DfT ministers. However, it is highly unlikely that a decision that has already been implemented will be changed now. 

Take the initiative

There are two schools of thought, however, and David Hoad, MOT Manager at Ashton-Under-Lyne’s Guide Bridge service centre, reckons a pragmatic approach could mitigate the effects of any custom lost to the extension. “The scheme has allowed key workers to stay mobile without worrying about the statutory requirement of having to have a current and valid MOT,” he said, noting that these individuals are the only ones who should have been driving under lockdown in any case. So, now that it’s here and shows no sign of being lifted, he advises garages to contact customers and explain to them you are now open and able to carry out the test. “Explain to them it is their responsibility to ensure their vehicle is roadworthy and that they can be prosecuted for not ensuring this, and the only way they can feel secure they have met this requirement is to bring the vehicle to you for inspection,” he advised, adding that it’s worth reminding customers that: “the extension is only there to give them the time to get the vehicle tested at the earliest opportunity.” 

Hoad’s views are backed up by ECP’s Cottrell, who observes that a proactive approach from garage managers could see customer rates quickly return to near-normal levels. He suggests that garages identify customers with overdue services or MOTs and offer them a booking slot of their choice, which, he says, “helps them to define their opening hours, understand the technician resource they’ll need and effectively manage their finances”. As an added incentive, he notes: “One garage owner we spoke to in the last couple of weeks reported a 43 percent uptake on the phone calls he made in a single day, and another converted 11 phone calls into bookings in one day.”

What’s most apparent, speaking to representatives from various sectors within the aftermarket, is that we’re firmly in the recovery stage now. There will be hardship ahead for all, with stringent distancing measures, weakened customer demand and an inevitable economic downturn to overcome, but the ball remains in the aftermarket’s court. Most, if not all, businesses can operate effectively with social distancing measures in place, and now that the roads are getting busier and garages are opening back up, there’s no reason to let the MOT extension stop the aftermarket from returning to rude health and keeping the nation’s vehicles safely on the road.  

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ANDREW PAGE BRANCH CLOSURES: STATEMENT FROM LKQ EURO CAR PARTS

The following statement has been issued by LKQ Euro Car Parts:

“Our branch merger programme started last year, and it has already achieved some very strong results, driving improved customer service in the new, strengthened branches and where possible, the redeployment of colleagues to create stronger, combined teams.

“We have identified a further tranche of 27 Andrew Page branches that currently operate in close proximity to others. Most of these branches were temporarily closed as part of the measures we put in place during the coronavirus lockdown, and now we are not planning to reopen them.

“We have reached out and consulted with colleagues who are impacted by these mergers directly. As such, it would be inappropriate to comment publicly about these branches right now. We’ll be providing guidance and support to any colleagues affected by these changes.”

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‘GREEN’ NUMBER PLATES LEGAL FROM AUTUMN

‘Green’ number plates to signify an electric vehicle will be legal to produce and to use on the road from the autumn, according to a statement fromTransport Secretary Grant Shapps.

The plates won’t be physically green, as previously suggested, but will have a green flash in the space previously occupied by the EU flag identifier.

The move is a small part of a plan to drive a ‘green economic recovery’.  The idea is that the plates will make it easier for cars to be identified as zero emission vehicles, helping local authorities design and put in place new policies to incentivise people to own and drive them.

A statement from the DfT suggests that drivers could benefit from local initiatives such as cheaper parking and cost-free entry into zero-emission zones where those with a green number plate will be recognised as eligible.

The plates will be identifiable by a green flash on the left-hand side and will be available for zero emission vehicles only.

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NEW ACQUISITION FOR ALLIANCE AUTOMOTIVE

NEW ACQUISITION FOR ALLIANCE AUTOMOTIVE

Millgate Motor Factors, Selby

Millgate Motor Factors, a single branch trade counter in Selby, North Yorkshire has been acquired by Alliance Automotive UK (AAUK).

READ: JIM BARKER LATEST FACTOR ACQUISITION BY AAUK

The business in its modern form was incorporated in 1999 by Steven Panas and was a member of the UAN buying group, which is itself part of  AAUK.

READ: ALLIANCE AUTOMOTIVE UK ACQUIRES ASMF

Millgate is only the second acquisition of 2020 for AAUK, having completed on Jim Barker Motor Factors in January, suggesting that the buying spree of multiple businesses between 2017 and mid-2019 is at an end.

 

 

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SMMT PUSHES FOR POST-LOCKDOWN SCRAPPAGE SCHEME

SMMT PUSHES FOR POST-LOCKDOWN SCRAPPAGE SCHEME

A leaked letter from the SMMT to Chancellor Rishi Sunak and Business Secretary Alok Sharma has revealed that the SMMT is campaigning for a 1.5bn scrappage scheme to revitalise the British automotive industry in the wake of the pandemic.

First reported by The Guardian, the letter allegedly argued the case for a “market stimulus package”  that can “support the entire market, not just disproportionately favouring specific segments or technologies, recognising the diverse nature of UK automotive manufacturing”.

To this end, any such scheme should encourage the purchase of combustion-engined cars as well as EVs, said the SMMT, with discounts of £2500 hoped to put 600,000 new vehicles on the road.

READ: LKQ PLOTS GROWTH AFTER CORONAVIRUS PANDEMIC

The last scrappage scheme, in 2009, offered new car buyers £2000 in exchange for their old vehicle as part of the industry’s recovery from the recession, with more than 400,000 vehicles sold as a result.

The Guardian quotes the SMMT as arguing that a new scheme “could also support wider government ambitions in terms of climate change and improved air quality”, but that the primary benefit “would be in jump-starting the market, the sector and the economy without further drain on the public purse”.

Further proposed benefits include taking automotive workers off the Government’s job retention scheme and reducing the risk of mass redundancies by driving demand for new vehicles.

The new car industry has suffered a significant and rapid downturn during the pandemic. In April – when most British manufacturers had paused production – just 4321 cars were sold, and recent figures show that just over 20,000 were sold in May.

READ: WHO BENEFITS FROM SCRAPPAGE?

But such a move would be unpopular with the aftermarket. The IAAF argues that most vehicles taken off the road would be ‘very much roadworthy’, meaning a scrappage scheme would “have a significantly negative effect on public mobility and the automotive aftermarket”.

Chief Executive Wendy Williamson said last month: “Motorists are currently under great pressure, and they should not be penalised for keeping hold of vehicles that are in good working condition and can continue to be serviced, repaired and maintained long into the future.

“Not only is this unfair to consumers, but it is putting the aftermarket at great risk, as it will result in a direct decrease in the number of vehicles entering independent garages.”

The IAAF suggests that, rather than implementing a universal, nationwide scheme, the Government should instead target drivers who live or work in low-emission zones, as they will be more likely to swap into a cleaner, newer vehicle.

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NEWS: EQUIPAUTO SHOW 2021’s ‘CHANGE IN POSITIONING’

NEWS: EQUIPAUTO SHOW 2021’s ‘CHANGE IN POSITIONING’

The 2021 edition of the EquipAuto trade fair in Paris is to ‘change position’ according to a statement from the organiser.

It is unclear from the statement what exactly the ‘change in position’ will be, but it is clear that as the show is to place only a month after the new dates for Automechanika Frankfurt, the Paris event must either be rescheduled, or the event must be changed to focus on something other than light vehicle service and repair.

READ: BREAKING: AUTOMECHANIKA 2020 CANCELLED

The full statement (in a direct translation) issued by Philippe Baudin, Chairman of Equip Auto reads as follows:

The unprecedented health crisis that has taken hold over the last few months throughout the world, leading to an unprecedented economic crisis, is bringing all French and international players in the exhibition ecosystem to consider different scenarios for their respective events. Since 2017, with its return to Paris Porte de Versailles, the EQUIP AUTO show has been on a highly positive trend, evidenced by the powerful mobilization of professionals in the automotive aftermarket and mobility services sector. Since the beginning of the year the organisers have been building on these solid foundations, reflecting in depth on the evolution of sectors and the expectations of professionals in order to build the EQUIP AUTO of the future, adjusting it to the changes happening in the market. In these circumstances which have been substantially modified by the current crisis, the FIEV and its partners, the FFC and the COMEXPOSIUM group, organisers of the EQUIP AUTO show, working in the interests of companies and the market, are building these new conditions into their reflections in order to define the new development avenues of the show in a long-term perspective and not just in the short term in the face of events. Thinking before they act rather than reacting on the spur of the moment: such is the path that the organisers have mapped out for themselves to redefine the contours of the show in its positioning and format and offer all stakeholders the most suitable long-term solutions for the future.

Look out for the July issue of CAT, which contains an exclusive interview with Michael Johannes, Organiser of Automechanika Frankfurt. 

 

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BREAKING: AUTOMECHANIKA 2020 CANCELLED

BREAKING: AUTOMECHANIKA 2020 CANCELLED

Automechanika Frankfurt will not happen in 2020 it has been announced.  The event will instead be held in 2021 and in odd years thereafter.

 

In a statement, the organisers said: “As you might have already expected: This is to inform you that Automechanika Frankfurt, the international industry gathering for the automotive aftermarket, is being postponed until 14 to 18 September 2021 in response to local and global measures implemented to stop the spread of COVID 19. From then on it will take place in the odd years”.

Detlef Braun, Member of the Executive Board of Messe Frankfurt, explained:

 “Our top priority is ensuring the health and safety of everyone – exhibitors and visitors alike – taking part in the event. With waves of the pandemic moving around the globe and many countries not expecting it to peak until the summer, I am certain that the decision to postpone Automechanika until September 2021 is the right one. Over the past two weeks in particular, we have been engaged in intensive discussions with our customers, partners and supporting associations, and they sent us a clear signal. By holding the event in 2021, we are responding to our customers’ wishes.”.

Automechanika Birmingham will happen in the same year as planned, due to ‘pent up demand’ in the UK aftermarket.

 

We’ll bring you more on this breaking story as we get it.

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BREAKING: SPARTAN ACQUIRED BY MOTORMANIA PARENT

BREAKING: SPARTAN ACQUIRED BY MOTORMANIA PARENT

BREAKING: News has been confirmed that Spartan Motor Factors has been sold by the administrators at Deloitte to MWR Sales Limited. The following statement has just been released by Deloitte:

Richard Hawes and Matt Cowlishaw were appointed as joint administrators to Spartan Motor Factors Limited (“the Company”) on 13 March 2020. Following the appointment, the business was successfully sold to MWR Sales Limited on 18 March 2020.

READ: MotorMania chain bought by Tetrosyl

The Company is a motor parts business operating a central hub in Newport and ten other branches across South Wales and the South West serving over 1,400 customers. The Company employs 135 across its network.

READ: SPARTAN LEAVES PARTS DISTRIBUTION PARTNERSHIP FOR IFA

MWR Sales Limited operates the motor factors and retail businesses of Motor World, Motormania and Sparesworld. The Company’s employees will transfer to the new owner.

Richard Hawes, joint administrator, said: “We’re extremely pleased we managed to find a new owner for the business through these particularly challenging times. We’d like to thank the employees for their support and wish the new owners every success in the future.”

 

We’ll bring you more information on this breaking story as we get it.

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UNIPART WINS THREE-YEAR JLR LOGISTICS CONTRACT

UNIPART WINS THREE-YEAR JLR LOGISTICS CONTRACT

Unipart has won a three-year contract to operate Jaguar Land Rover’s new Battery Assembly Centre at Hams Hall in Birmingham.

 

The site, which will be among the largest such facilities in the UK when it opens later this year, will provide electric vehicle batteries for JLR’s Solihull and Castle Bromwich production lines.

John Neill heads Unipart Group

More than 100 Unipart employees will be stationed at the Hams Hall facility, providing logistical assistance in line with the VM’s just-in-time production model.

READ: BOSCH TO ACQUIRE UNIPART CAR CARE CENTRES

John Neill, CEO of the Oxfordshire-based supply chain specialist, said: “The future of the automotive industry is in electric vehicles, and this contract with Jaguar Land Rover sees Unipart playing a key role at the heart of Jaguar Land Rover’s plans for electrification.

“Unipart is uniquely placed to make a positive influence on the UK automotive industry’s electrification which is set for terrific growth. Hyperbat, our joint venture with Williams Advanced Engineering, is at the forefront of manufacturing batteries for high-performance electric vehicles.

“Our lean practitioners are already working with automotive manufacturers looking to bring electric vehicle production into their supply chain successfully, and we can continue to bring added value through our expertise in both in-production and aftermarket logistics.”

Unipart has already worked with JLR, producing bumpers for all non-current models to allow the VM to clear a significant production backlog.

READ: UNIPART WINS EXTENSION TO JLR PACKING CONTRACT

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BREAKING: INFOPRO TO ACQUIRE HAYNES PUBLISHING

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION 

13 February 2020 

RECOMMENDED CASH ACQUISITION 

of 

Haynes Publishing Group P.L.C. (“Haynes”) 

by 

Infopro Digital (Holdco) Ltd (“Bidco”) a wholly-owned subsidiary of Infopro Digital Group B.V. (“Infopro Digital”) 

Summary 

  • The boards of Infopro Digital and Haynes are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Haynes by Bidco. The Acquisition is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act. 
  • Under the terms of the Acquisition, Haynes Shareholders shall be entitled to receive 700 pence in cash for each Haynes Share held, representing a premium of approximately: 
  • 62.4 per cent. to the closing price per Haynes Share of 431.0 pence on 12 February 2020 (being the latest practicable date prior to publication of this Announcement); 
  • 72.8 per cent. to the closing price per Haynes Share of 405.0 pence on 14 November 2019 (being the latest practicable date prior to announcement of Haynes’ Formal Sale Process); 
  • 67.5 per cent. to the volume weighted average price per Haynes Share of 418.0 pence for the three month period ended 12 February 2020 (being the latest practicable date prior to publication of this Announcement); and 
  • 120.1 per cent. to the volume weighted average price per Haynes Share of 318.0 pence for the twelve month period ended 12 February 2020 (being the latest practicable date prior to publication of this Announcement). 
  • The Acquisition values the entire issued ordinary share capital of Haynes at approximately £114.5 million on a fully diluted basis. 
  • The Haynes Directors, who have been so advised by Europa Partners as to the financial terms of the Acquisition, unanimously consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Haynes Directors, Europa Partners has taken into account the commercial assessments of the Haynes Directors. Europa Partners is providing independent financial advice to the Haynes Directors for the purposes of Rule 3 of the Takeover Code. 
  • Accordingly, the Haynes Directors intend to recommend unanimously that Haynes Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting as the Haynes Directors have irrevocably undertaken to do in respect of their own beneficial holdings (for the avoidance of doubt, not including the interests covered by the irrevocable undertakings of Family members and Family Settlements summarised directly below) of 79,671 Haynes Shares representing, in aggregate, approximately 0.5 per cent. of Haynes’ issued ordinary share capital (excluding all treasury shares). 
  • Infopro Digital and Bidco have also received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting from Haynes Family members and Family Settlements in respect of a total of 11,115,608 Haynes Shares representing, in aggregate, approximately 73.5 per cent. of Haynes’ issued ordinary share capital (excluding all treasury shares). 
  • Infopro Digital and Bidco have also received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting from CriSeren Investments Ltd and Stancroft Trust Ltd in respect of a total of 728,666 Haynes Shares representing, in aggregate, approximately 4.8 per cent. of Haynes’ issued ordinary share capital (excluding all treasury shares). 
  • In addition, Infopro Digital and Bidco have received a letter of intent from AXA Investment Managers UK Limited to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in respect of 450,000 Haynes Shares, representing, in aggregate, approximately 3.0 per cent. of Haynes’ issued ordinary share capital (excluding all treasury shares). 
  • Infopro Digital and Bidco have therefore received irrevocable undertakings or letters of intent in respect of a total of 12,373,945 Haynes Shares representing, in aggregate, approximately 81.8 per cent. of Haynes’ issued ordinary share capital (excluding all treasury shares). 
  • Further details of these irrevocable undertakings (and the circumstances in which they shall cease to be binding or otherwise fall away) and letters of intent are set out in Appendix III to this Announcement. 
  • The cash consideration payable by Bidco will be funded from existing cash resources of Infopro Digital. 

  • Raymond James, Infopro Digital’s financial adviser, is satisfied that sufficient resources are available to satisfy in full the cash consideration payable to Haynes Shareholders under the terms of the Acquisition. 

Timetable and Conditions 

  • The Acquisition shall be put to Haynes Shareholders at the Court Meeting and at the General Meeting. In order to become effective, the Scheme must be approved by a majority in number of the Haynes Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Haynes Shares voted. In addition, a special resolution implementing the Scheme must be passed by Haynes Shareholders representing at least 75 per cent. of votes cast at the General Meeting. 
  • The Acquisition is subject to the further conditions and terms set out in Appendix I to this Announcement. It is expected that the Scheme will become effective in April 2020. 
  • The Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and the General Meeting, shall be published as soon as practicable and is currently expected to be posted to Haynes Shareholders in early March 2020. The Court Meeting and the General Meeting are expected to be held in March or April 2020. 

Commenting on the Acquisition, Eddie Bell, Chairman of the Haynes Board, said: 

“Haynes has made a highly successful strategic transition to become one of the leading suppliers of content, data and innovative workflow solutions for the automotive industry and motorists. Its strategy and operational execution over the past five years have translated into strong financial performance and shareholder value creation. The Haynes Board believes that the markets it serves have great potential for Haynes’ future growth and development, and that a combination with Infopro Digital will provide Haynes with the scale, capabilities and resources to ensure that it stays at the forefront of these markets and maximises its potential. The proposal from Infopro Digital reflects these opportunities and represents an attractive opportunity for Haynes Shareholders to crystallise an immediate and certain value in cash for their shareholdings, at a significant premium to current and historical share price trading levels.” 

Commenting on the Acquisition, Christophe Czajka, Founder and Executive Chairman of Infopro Digital, said: 

“At Infopro Digital we have long respected Haynes’ spirit of innovation and its reputation for excellence. With a deeply complementary product set and geographic footprint, the combined companies have an opportunity to serve our clients more effectively and to build on both organisations’ history of creating innovative, transformative products that the automotive industry has come to value. We are committed to working together to create a company that will continue to help define the future of automotive data.” 

This summary should be read in conjunction with the full text of this Announcement. The Acquisition shall be subject to the Conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions which shall be set out in the Scheme Document. Appendix II to this Announcement contains the sources of information and bases of calculation of certain information contained in this Announcement, Appendix III contains a summary of the irrevocable undertakings and letters of intent received in relation to the Acquisition and Appendix IV contains definitions of certain expressions used in this summary and in this Announcement. 

Enquiries: 

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