“I think it’s difficult to predict what’s going to happen in the market with all the problems that are about. The cost of fuel is one problem, and also the fact that cars these days are leaving the factory with so much equipment on them.

My word of advice, particularly for retailers, would be to keep doing what they’re doing – keep doing well, and keep offering customers that extra level of service.

You also need to be on the lookout for new ideas, don’t be afraid to do something new. For example there’s a growing sector of the market that’s starting to feature retro or classic cars – suddenly it’s becoming all the rage to own a classic Mini or something like that.

The beauty of that sector is that when people buy classics there’s an increase in what they’re prepared to spend on it. That means a lot of extra business for the local retailer, and I can see that increasing in the coming months.

With that in mind I would also say to get yourself along to the various classic and retro shows that are coming up. Even if you don’t exhibit there go along and start talking to owners, they could be your next customers.”

Joe Elliott

———-

“We plan to be thriving, vibrant & growing of course!

OK, so I’ve always been a little optimistic but I believe that independent car accessory stores who can adapt to a market where added value & service provides differentiation will prosper. Those who are determined to race to the bottom on price will struggle to compete with internet retailers and online channels like Ebay & Amazon.

There will be less pure car accessory stores and those that still remain will have found other niche areas to compliment their offering. That could be in leisure products, cycles, motoring related toys etc. Even stores who retail and factor will find it hard to compete against protective car dealerships, extended warranties and the investment needed to cover the car park.

Opportunities for stores prepared to change and adapt and provide ‘fitted services’ will be sought after as a result of a generation who are generally far less able to ‘DIY’ either because of the complicated nature of electronics on the car or because basic practical skills are no longer taught in schools.

The major challenge will not only come from the internet but also from a supply chain who no longer see the need, can afford or are geared to service small independent retailers.

In order to survive these retailers will need to be in a thriving group like A1 Motor Stores of course!”

Glenn Mason

Co-Director, A1 Motabitz

“There are three current trends that will set the agenda over the next twelve to twenty four months and contribute significantly to the market size and dynamic over the next five years.

The first of these is the fierce price competition at all levels that many in the industry are currently engaged in; this is driving down margins and profitability. The need to compete is creating the second trend with many companies turning to the introduction of lower cost parts and even the introduction of recognised brands sourced via low cost countries, both of these will contribute to destabilising and devaluing the market. The final trend is the unrelenting expansion within an already over subscribed market with larger groups seeking new sites and determined to keep up with noisy neighbours.

The market size is unlikely to grow significantly over the next five years and the current number of outlets at every level is unsustainable; it is inevitable that their will be a number of casualties  and these will not be restricted to small independent businesses.

The impact of the internet will also have a profound impact, once the issue of first time accurate application of parts is achieved this will quickly take off and take market share.

In the nineties one of the big buzzwords was ‘disintermediation’ whereby supply chains were shortened and links in the chain removed. Twenty years on the technology exists and the need to compete will mean fewer larger distributors and a move a way from delivering the parts before the garage has had a chance to put the phone down. Coupled with this will be new product ranges and technologies and a resurgence in Vehicle Manufacturer presence in the market.”

Peter Cox

General Manager, Motaquip

———-

“The UK public have an insatiable demand for personal mobility, limited only by motoring costs and availability of convenient and affordable public transport alternatives. So cars continue as the preferred option for 75% of our growing population. Total aftermarket value continues to increase slowly, but with many changes.

New car sales staying low. Average age of the parc increasing. Owners of older cars tend to favour local independent garages. Despite the best efforts of the vehicle manufacturers to make their cars difficult for independents to repair, it will be hard for dealers to compete from high-cost premises designed for new car sales. Their share of the aftermarket will continue to decline despite rearguard actions with extended warranties and dealer service plans.

The UK car parc, already the world’s most diverse, will not get any simpler. The long-predicted consolidation of world car manufacturers shows no signs of happening soon with at least 6 Chinese VMs entering our new car market.

High motor insurance premiums and excesses will cause an increasing number of motorists, guarding their no-claim bonuses, to have minor collisions repaired privately. We could even see the return of garages offering both mechanical & body repairs.

A much greater emphasis and awareness of cost by the motorists: the marketing of servicing, MOT, bra kes, tyres and other ‘user-definable’ jobs – predominantly over the web – will be largely price-driven. The independent garage’s ongoing task will be to sell the benefits of regular servicing and preventative maintenance.

Garages must adopt multiple labour rates. Low margins on the basic jobs – but high margins on complex jobs electronics, diesel & petrol injection, turbos, exhausts etc. This will fund their essential investments in equipment, training, signage & branding, web marketing, IT etc.

The task of the parts distributor is to assist the independent garage to embrace these changes and grasp new opportunities. This means holding very high levels of range, availability, delivery and price competitivity on basics items. Additionally, the required stock range for specialised and slow-moving items will continue to explode – Euro Car Parts already stock 120,000 different parts and we lare adding nearly 1,000 new parts every month. The smaller distributor will have difficulty in financing these stocks and much larger groups, probably pan-European, will predominate.”

Sukhpal Singh Ahluwalia

Managing Director, Euro Car Parts

———-

“Life is pretty tough for all of us in the independent automotive aftermarket at the moment and, frankly, it’s not going to get any easier anytime soon, so we’d all better be prepared to stand up and be counted if we want a successful future. Cars are getting more and more complicated, customers are getting more and more savvy, dealers are getting sharper with their marketing and are having some limited success in attracting older cars back into their service bays.

The chances are that if you bury your head in the sand for the next five years, when you eventually extract it things won’t look much different on the surface but if you think standing still really is an option, be prepared to find yourself so far behind in the race that you’ll never catch up.

But it’s not all doom and gloom, there are huge opportunities for all of us if we are prepared to work closer as an industry.

Manufactures need to sell product to distributors (Factors), Factors need to sell product to garages and garages need to have a constant flow of vehicles passing through their workshops to survive. Oh, and we all need to make a profit. So we’re all relying on Mr Consumer to choose the independent aftermarket when he needs work on his car.

In my view there are three key points we have to address:

• The erroneous belief that new car warranties will be affected by allowing anyone other than a dealer to look after your car during its warranty period. We all need to get behind the IAAF’s Right 2 Choose campaign but we also need to give consumers confidence that we really can look after their car, that we know what we’re doing, we won’t cut corners and that they’ll get everything that a dealer can offer for less money.

• The crazy idea that we all have to give product away. There’s a belief (in some quarters) that customers won’t pay for quality any more. We are all feeling the squeeze on margins and we really don’t have to! Consumers will pay for quality products and quality service. I’m not disputing that there are drivers, usually with older vehicles that want cheaper parts but that’s OK, we can do that too. We have to be confident in our skills and we have to be prepared to charge a reasonable price for those skills.

• The idea that we can muddle through with little or no training – and by training I’m thinking technical, marketing and customer service. Without training we are going nowhere, any of us. Just over 30 years ago, a young, naive, Richard Swann emerged from the University of Salford with an honours degree in Vehicle Engineering Science tucked under his arm. At the time I knew (in a lot of detail) how a car worked but think how things have changed in the intervening years – and some of us haven’t! It’s not just technical training though; customers have become significantly smarter, they expect to feel good when they part with their hard earned cash these days. If we do nothing else as an industry, we must embrace training and in particular technical training. Otherwise we might as well pack up and go home.”

Richard Swann

Marketing Director, GSF

———-

“Could technology be our biggest threat and opportunity over the next 5 years?

February 2011 saw Toyota unveil its latest attempt of an automated vehicle powered by Google, is this future of the automotive aftermarket? Well maybe not in 5 years but it could certainly be a real possibility in 10 years time. Whatever happens, technology is changing the face of the humble motor car and we are seeing massive leaps in the development sector when it comes to the design and manufacture of vehicles.

Technology is a real threat to the aftermarket, for vehicles to be repaired knowledge and understanding is prime, garage owners need to embrace technology and training rather than looking  at it as if it is a two headed beast from the world of unknown. Tackled correctly it’s no more of an obstacle that the once feared BMW service light, a cutting edge feature of its time but one now regarded as being simplistic.

Technology offers great opportunities to those willing to invest a little time and money in training, whether you are a car parts distributor, vehicle mechanic or parts adviser, training in the understanding and methodology underpinning the vehicles workings will allow you to better service the needs of you customer, this in turn will aid the independent aftermarket in keeping its market share in the parts and repair sector.”

Damian Milling

Group Marketing Manager, Mill Auto

———

“Unless there is a fundamental change in thinking and attitudes to the independent aftermarket it will be still considered a backstreet trade full of Arthur Daley type characters ready to rip off the ordinary man in the street of which there is some truth. Vehicles will be fitted with cheap low quality parts that compromise safety as this market becomes ever more price driven.

The price price price situation we now find ourselves in is leading to quality brands being sold at ridiculously low margins. Part of this is down to suppliers allowing the product to be oversubscribed in certain areas via buying groups. Gone are the days when a certain Company was known as being the primary stockist for a brand, a sad fact that only the suppliers can remedy.

We now find ourselves at the mercy of garages and workshops that demand an instant service at the lowest price possible. There is no loyalty any more as there doesn’t have to be. The various garage schemes and codes are utterly irrelevant to the man on the street, and none of them are policed to any kind of standard. What needs to happen is a garage scheme that is targeted to the consumer not the garage. This way quality can be brought back into the main. Garages that are part of this scheme will be policed and have to work in a certain fashion that will bring a value of trust back into the marketplace. Adverts placed in The Sun, The Star and The Sport will have far more impact on getting the message across. In summary it’s the public we need to start winning over as they hold the key to recovery.”

Steve Candy

RRD

———-

“I sometimes wonder why we ask where the industry will be in five, ten or fifteen years? When we are not 100% certain what the next year will bring for us. What I do know is that the factor industry is heading for self destruction if we don’t change the way we compete with each other. We all want a piece of the pie , but slashing margins as a weapon against your competitor is not the way to go.

With the economic climate still unstable “FACTORS” should be protecting their business not running it into the ground by trading at ridiculous low margins, I come from an era when service was number one, stock second and price a very close third, but third never the less. Yes the garage is being squeezed by the end user to be competitive but surely we have more in our box than “being cheaper than them”. The large factor groups use this as an aggressive tactic and in turn have forced the independent to follow suit, surely to protect our future we should go back to providing the best service we can with the best staff to do it with. There is an opportunity to be successful in the factor game , if we don’t stop this B&Q type price war we will see a lot of smaller/independent factors  go under within the next five years ,factors that provided a great service but cannot sustain their margin being forced to below say 30 percent.

The way forward is to educate the customer to understand the future for him, his customer and the technologies they will be faced with in the very near future. The aftermarket is vital and needs to be protected not sent into a black hole.”

Vaughan Wetherill

Motorserv

“Despite the consolidation in the industry we’ve witnessed over the last few years, there is still over-supply at many levels of the distribution chain. Therefore it is likely that there will be further consolidation, particularly amongst suppliers and distributors.

Consolidation requires major funding, which means that either the big European distribution companies or more private investment companies such as LKQ or H2 will come into the industry to provide the financial backing these mergers/acquisitions will need.

Inevitably some traditional brands that operate in localised markets will disappear as a result of this market globalisation and it is likely that some ‘British’ brands could well be among these casualties.

The biggest challenge for suppliers to the independent aftermarket is to maintain their market share in the face of increasing competition from the original equipment suppliers (OES). Accurately cataloguing their parts will become an increasingly difficult process because access to the raw catalogue data from the vehicle manufacturers is so hard. Therefore parts manufacturers will have to join forces and work together alongside a cataloguing system such as TecDoc to remain competitive.

For the workshop vehicle diagnosis and the training of technicians are the major issues, but the tough economic climate is likely to lead to an increase in the average age of the car parc, which will bring with it additional aftermarket business.

Other opportunities for the industry will come from the new technology employed by hybrid and electric vehicles and the new products that will need to be serviced and repaired by workshops willing to make the investment required to tap into it.

It is vital that the repair side of the business develops new concepts to ensure that there is a large enough skilled workforce that is equipped with the knowledge and technical qualifications to be able to carry out the work that will be required.

On the supply side, an effective cataloguing platform is crucial.”

Milko Wolf

Dayco Regional Sales Manager, North Europe

———-

“Denso recognises that the next five years will undoubtedly be a period of rapid change and development. Electrification will have a huge impact on the future of the industry, and will certainly help shape the future of our own business.

Looking forward to the next five years we envisage that the key themes for development particularly within our business will relate to stop/start, hybrid and clean technologies; safety and security such as monitoring driver health, collision avoidance technology; and a move towards a fully-integrated Human Machine Interface (HMI).

The biggest factors that are currently impacting on the future of our industry are the ‘mega trends’ of a growing, city-based world population.  Technology remains a common thread across all themes that will continue to shape the automotive aftermarket, including issues such as increased connectivity, and the need to find alternatives to fossil fuels.  Other issues that will continue to impact will be changes in consumer behaviour as well as the economic crisis.

Now is the time to invest in your customers.  Training is an essential tool for us, and helps us to better educate our customer in advance of technological changes.  We are doing all we can to arm our customers with all the advanced information we can so that they are better placed to get to grips with the technology and ultimately offer their customers an unrivalled and informed service.”

Paul Payne

Manager, Denso Aftermarket Sales UK

————

“There is gathering momentum towards a much better, and publicly recognised, accreditation for independent garage technicians. Government legislation and garage schemes are making bold efforts to raise the profile of the independent sector and the distribution chain should use this momentum to help raise the standard for the consumer, and help to provide longevity for the independent installer.

Consolidation of the various accreditations that currently exist with a view to raising the profile of the independent sector. A public awareness campaign should be planned, funded and executed with the aid and support of the distribution chain to ensure the independent aftermarket  has a sustainable future. Too much uncertainty with regards to consumer choice still exists, despite the existence of essential legislation, such as BER.

Today the market is faced with growing price challenges with an increasing demand for lower prices for good quality products. The market relies upon installers supporting the distribution chain and offering the consumer quality products and real value. It is too easy to take cost out for the consumer where this may not exist in reality. This can then lead to lower quality products at lower prices. The benchmark for independent installers is the OE sector so cheaper maintenance does not need to become a reality.”

Nick Racklyeft

Regional Manager, Gates

———-

“In February, Transport Secretary, Justine Greening, set out clear directives for the garage industry to move forward and to meet the expectations of motorists. She said, and I quote, ‘our garages are crucial to ensuring that Britain’s garages continue to be the safest in the world’.  She also said: ‘Most are doing a good job but the latest data shows there is room for improvement.’

In order for garages to give motorists the very best information about their performance and to improve, they need to fully engage with their customers and use feedback to continuously enhance their services.  I see in the coming years, good garages and dealers – even the small ones – increasingly using the latest feedback systems, online bookings for MOTs and servicing,  and digital communications technology, such as social media tools, Facebook, LinkedIn and Twitter, not only to build a loyal customer base, but to find out what customers really think of their garage experience. Thankfully, there are accessible training schemes offering immediate benefit to garages and their customers, and cost effective tools readily available to start putting processes in place.

In the course of my work, I have spoken to and visited hundreds of garages and dealers and have found the good ones are ready to adapt, evolve and face the challenges ahead.”

Rachel Greasby

General Manger, Forte UK & Good Garage Scheme

———-

“Predicting the future has never been an easy task. If it was, I’m sure we would all be millionaires. Just look at how the top economists and financial experts got caught napping in September of 2008. As the last three and a half years have proven, predicting the future appears to be more unpredictable than ever. That said, it is often far better to try to predict what might happen rather than wait for the inevitable. So what does the future hold for the aftermarket?

I am confident that the industry will be in a better place than it has been over the last three to four years. Whether this is the case rests with the aftermarket’s ability to continue to adapt and embrace change, whilst ensuring it serves the need of an increasingly educated customer base. If one thing is for sure, increased competition from OEM’s and their dealership networks is certainly likely to remain on the increase. Over recent years their focus has been on retaining customers by developing more effective aftersales programmes that entice owners to keep their vehicles in the network and out of the independent sector.

Understandably, independent garages need to not just sit up and take note, they must position themselves as having the capability and expertise to meet such a challenge head on. Increased competition will also continue to come from greater parts choice. The world is becoming an increasingly small place and the opportunity to source parts from all corners of the world is now the norm. Whilst the problem here rests with possible quality issues, the opportunity lies in the independent’s ability to meet the needs of the customer by supplying only the highest quality components from respected and trusted brands such as ACDelco.

Differentiation will also be key to those within the aftermarket that will not just survive but flourish. Indeed as this protracted downturn has shown, there continues to be successes, and I’m sure that for those who continue to demonstrate vision and marry this with the application of sound business acumen, they will continue to flourish well into the future.”

Lee Quinney

General Manager, ACDelco

———-

“Always tricky to predict. I read recently that government experts in 1900 predicted that by 1950 London would be knee deep in horse shit as they didn’t recognise the potential of cars to replace horses.

In the UK – clearly a number of factor companies competing on a national scale will have an impact. For at least a decade one of the largest aftermarkets in Europe did not have an effective, dominant national. That gap has now been filled, over filled in fact.

Four companies are actively expanding to have national cover. There is a threat to the local/regional independents who will get caught in the crossfire, membership of a buying group will not offer any real protection. Distributors/suppliers will come under severe pressure from the bigger players who will flex their buying muscle.

Credit will continue to tighten as bad debts increase. The automotive aftermarket takes it for granted that they will get credit from a supplier, in other industries it’s more often payment for delivery, or at most 30 days from invoice.

In many ways it’s a cyclical thing and we go right back to the days when names like Edmunds Walker, Autela, Partco, Godfrey Holmes, Brown Brothers etc, were all slowly failing. Over supply leads to all sorts of daft things, vans running around for very small sums of money, some garages taking advantage by placing the same order with several factors, the one that gets there first gets the business, and I bet in some cases depots from the same business, undercutting each other on price. It has happened before.

We cannot take it for granted that car ownership will increase, a frightening statistic recently that applications for driving tests are down 50 percent! To make things even tougher, internet sales of car parts, or even just price comparison, will put prices under sharp focus.

On the plus side, motorists will continue to look for real value. They will continue to turn away from dealers, or `stealers` as they are often referred to on internet forums. Hopefully they will turn to independent garages and have a good experience, many will seek comfort in a familiar brand offered by the big retailers or fast fit tyre companies. Companies that focus on sustained quality of products and service, matched with prices that deliver real value, will continue to succeed.”

Malcolm Rosher

Comline

———-

“We expect to see an industry that is leaner and more efficient than it is today. The current situation of ever increasingly competitive pricing and oversupply of parts will be squeezed by the need to reduce overheads by improving efficiencies throughout the supply chain. Improved use of modern technology and data accuracy will be the catalyst to this change. Unfortunately this will mean casualties along the way as we experience further consolidation in the parts distribution channel and further reductions in garage numbers.

The biggest challenge to all of us in the industry has to be the increasing complexity of vehicles. At the same time, this is also a major opportunity for those willing to embrace these changes. Being able to diagnose and repair these new modern vehicles quickly and efficiently will be the key differentiator in winning business and surviving in the future. Providing the required level of support to independent garages to allow them to achieve this is imperative.

Quite simply, increased knowledge and improved customer service levels. The numbers of opportunities to work on a vehicle are declining due to increased service intervals and the increased quality of OE components. It is therefore essential that vehicles are not turned away due to a garage’s inability to work on them. Investment in appropriate equipment is required and also the relevant training to support this investment. Attracting new customers and more importantly keeping them loyal will also become more critical and high levels of customer service will be the main differentiator after technical competence.”

Mark Heard

Bosch

———-

“We believe there will be a lot of consolidation in distribution in the UK automotive aftermarket and a move towards more national distribution. We hope the emphasis will move back to the benefits of fitting quality products such as those supplied by companies like KYB UK.

It will be a peak time for vehicles that were purchased new as part of the Government’s scrappage scheme coming into the aftermarket, which will represent great opportunities for independent garages and distributors.

Government cut-backs have also resulted in worsening road surfaces which will mean that more vehicles will be damaged in the future, again leading to extra repair work being carried out in the aftermarket.

We foresee more, young talented individuals coming into the industry at all levels; manufacturing, distribution and garages. This will hopefully bring a new dynamism to the industry.

There needs to be proper succession planning by the independent automotive aftermarket to deal with future challenges.

It is vital that the right levels of investment are made to keep up with the ever-increasing vehicle technology.

The proliferation of short ranges of cheap, lesser quality products is also a challenge to the leading parts suppliers while the rise of main dealers will represent a challenge to both distributors and garages.

Both garages and distributors need to embrace technology and have the right training to enable them to continue to prosper.”

Matt Robinson

General Manager, KYB UK

———-

“As a tier one supplier to the top 25 OEMs worldwide, we see a rapid transition in vehicles moving from mechanically-driven hydraulic components to electro/electrical components. Delphi has been emphasizing for years there is a vehicle electronics revolution occurring and encouraged the entire channel to “prepare to repair.”

Today, the electronics content on vehicles is at forty percent and predicted to increase to 60 percent in the next decade. It’s no longer a revolution, but a reality. This is true even on today’s entry level, lower priced vehicles.

In addition to the technology shift, we are seeing a service model evolution in the new aftermarket. For Delphi, our repair network grew to more than 1,000 Delphi Service Centres (DSC)and 4,500 Delphi Diesel Centres (DDC) in 2011.

DDCs, the hub of the Delphi service network, focuses on the complete overhaul and repair of common rail and electronic unit injectors. The DSC is the spoke of the Delphi service network working with DDCs, and its focus is on vehicle diagnostics and replacement. The DSC performs diagnostics and if there is a need for repair, the part in question is transferred to the DDC. In addition to Delphi components and systems, DSC’s are also equipped to repair all makes programs helping increase a garage’s capabilities, and in turn, their business.

How does the aftermarket need to change in the next five years to make the most of the available opportunities? Where is the aftermarket heading and how does it need to adapt?

In the next five years it is critical for the aftermarket to maximize its access to technical data and information. There should also be a concerted investment focus on specialized and vehicle-specific hand held tooling, as well as highly advanced testing and repair equipment, such as Hartridge equipment.

Training is vital to servicing the vehicle electronics reality. In fact, the increase in knowledge will continue to be a key catalyst for the transition of activity from the OEM network to the aftermarket. Proper and ongoing training means the aftermarket is kept up to date with the latest market and OE information.

The vehicle electronics reality is not going away. Vehicles will only become more and more complex, particularly with what Delphi identifies as “megatrends” – safe, green and connected technologies. In order to support these technologies as they enter the aftermarket after the warranty period is over, training and resources should be considered as an investment for future growth and profitability.”

Mike Rayne

Vice President, Delphi

———-

“At the moment most business sectors are struggling in the tough economic climate. Unfortunately I think this will mean over the next five years the weaker businesses in the automotive sector will disappear.  (However this is the same with any industry) On the up side this will allow the stronger ones to develop further and make better margins than they have over the previous few years where margins have been squeezed

There are plenty of growth opportunities in the industry, business who diversify into other categories do very well such as bikes and hardware. Companies who have embraced technology are doing extremely well and large nationals seem to be doing extremely well with the reserve and collect in store service which keeps foot traffic coming through the stores. The challenges the industry faces is getting used to selling a quality product and not always thinking everybody wants cheap. It always tends to be false economy.

The industry just needs to move with the times. Proper staff training. Staff can no longer stand behind a counter just expecting to take money those days have been and gone, they should be trained in all products and be able to cross sell, and sell add on products.  All independents need to add, added value to the end user either in the form of product knowledge, variety of products on other, specialist products etc that they can’t get in every major supermarket.  Just trying to compete on price against the large supermarkets is asking for disaster. Shops should be clean and products well displayed, point of sale material should also be optimised.”

Ollie Page

Sales Director, JRP Distribution

———-

“The last few years have shown that predicting the future is far from easy. One certainty is that vehicles will continue to become more technologically advanced, particularly when it comes to fuel. Rising diesel prices could see lower capacity petrol engines using turbo or hybrid technology becoming more popular. Also, expect to see further progress in technology, such as regenerative braking, that utilises various power sources and improves fuel efficiency. For distributors this will mean adapting to different parts demand and technical knowhow.

With insurance premiums and fuel costs rising, running a car is increasingly expensive. One positive outcome has been the migration by motorists from franchised dealerships to independent garages. The question is whether this is temporary shift or more permanent.  To encourage long term behavioural change, independents will need to invest in training, standards and equipment, so they’re well positioned to retain this custom once the economy improves.

Increasingly complicated vehicles will mean that technical competence will become even more important. Continual learning and skills development will be vital for technicians. You can see the technician of the future being seen in the same light as engineers, architects and programmers as a highly specialised profession. Using suppliers that can provide technical support, rather than just the lowest prices, will help garages future proof their business.

When it comes to parts supply, garages currently have a plethora of choice including the web. It’s doubtful the market can continue to sustain so many offline suppliers. Consolidation is inevitable and it will unfortunately mean many smaller factors find it harder to compete. As technology advances, those that adapt and focus upon a niche may well survive. We expect a landscape of fewer factors, dominated by larger distributors who will deliver a wider range of services.”

Steve McCann

Managing Director, CES

———-

“There is no doubt that the aftermarket is facing considerable challenges over the coming years due to technology changes on vehicles and also in the way that we do business. Over the last few years there has been consolidation within the industry and as a consequence those that have survived have had to adapt. In our sector of the aftermarket, rotating electrics, there are only a handful of true remanufacturers left; Autoelectro being one of them. Consolidation has resulted in poor local supply of components which has meant sourcing parts internationally and investing in facilities in order to maintain remanufacturing processes and to be able to remanufacture the latest starters and alternators that have the latest technologies such as smart charging systems and stop/start.

This process of consolidation has percolated through all areas of the aftermarket and has hit the motor factor and garage level. Over the coming years many outlets will close or be taken over. Survival depends on investment in the latest test equipment by garages and access to technical information. Similarly motor factors need to invest in computerisation and stocks. Computerised stock control is critical as parts become obsolete very quickly. Suppliers and factors need to work in partnership as factors will rely more on the proactive suppliers to give product support, technical information, etc. The days of buy it cheap, sell it cheap are numbered.”

Tony Bhogal

Autoelectro

———-

“The aftermarket challenges ahead of us will involve the changing nature of our parts, our logistics and indeed the business models which we currently operate in and around. The way in which parts are manufactured, distributed, sourced by the garage and the consumer are all likely to change in the coming years. With information more and more attainable and available, it will be interesting to see whether the investments our businesses are making today are the most relevant ones, or are in fact way off the mark.”

Adit Chopra

Autogem

———-

The industry will continue to improve its position in relation to the share of repair work – as long as it (the industry as whole) continues to educate the end-user about the cost benefits to be gained from taking the independent route.

Collectively, the industry needs to embrace the use of remanufactured products, not only to conserve raw material stocks, but to reduce volumes of CO2 emissions and the amount of scrap going to landfill. In order to do that, we have to develop the end users’ understanding about the quality of the alternatives. They need to understand that properly sourced remanufactured parts are as good as – if not sometimes better than – the original.

Two of the major challenges are a) improving the perception of remanufactured parts as a realistic alternative to new and b) continuing the development of skills levels at installer level in the independent aftermarket.

There is some sterling work being carried out by some members of the distribution network. The momentum must continue.

Steve Jarnet

Corteco

———-

“There is no question that many products throughout the aftermarket are over distributed and that the number of garage workshops is out of proportion to the size of the car parc. Although this has been a long running issue, the increasing complexity of the modern vehicle could well be a catalyst to change as both suppliers and garages at the bottom end of the chain are forced out of the market.

It is also likely that the economic outlook will remain depressed and the current period of austerity will continue for some years. This means that hard-pressed MOTorists will be watching what they spend on all but the most necessary of purchases for the foreseeable future.

Despite the obvious pressures that come with the underperforming economy, the car is a fundamental requirement for the majority of MOTorists and so those who rely on their vehicle for the daily commute, but need to save money when it is serviced, are likely to migrate from the dealers and into the independent sector, where the labour costs and parts prices are less expensive. This provides a real opportunity for workshops that are equipped (and those willing to invest in their businesses) to cater for vehicles between three to five years old, which incorporate some quite up-to-date technology.

However, MOTorists that switch to the independent need to have confidence in the quality of the parts used on the vehicle as well as in the technicians carrying out the work. Therefore, it is vital that workshops source their parts from suppliers that can provide components of matching original equipment quality and which are supported by good warranty conditions. This gives the workshop confidence in the parts and the MOTorist the assurance they seek.

The independent sector will only reap the benefits that the changing market presents by investing in their businesses, not only in the equipment necessary to service the modern vehicle, but also in trianing their technicians to be able to undertake the work.

They also need to back up these skills by only using high quality replacement parts.”

Dan Joyner

First Line

———-

“The two areas that the aftermarket needs to adapt in are training and technology. With the sales of smaller vehicles and hybrids increasing, and technological innovations moving swiftly and in some cases becoming standard (i.e. TPMS), the aftermarket certainly needs to adapt. The next five years are going to be extremely critical and unless garages invest in their staff by trianing them up to the required expertise in order to work on and change certain parts, then they are going to find it more difficult to carry out certain repairs on vehicles.

Service intervals are getting longer, for example some VW Golfs now only require a service every two years. This means that whilst the vehicles are on site they need to be checked over thoroughly, making the need for some form of diagnostic equipment a must. Having said this there are huge opportunities to be had by offering free winter and summer checks. These checks enable the garage to point out useful, ‘need to know’ information to the end user. This could range from why it is important to fit the correct specification of oil, to more importantly focussing on safety issues such as fitting springs and shocks in pairs. Other information may include changing cabin filters to make sure the air circulating in the car is clean and making sure the air conditioning is serviced and maintained. These aspects could essentially make the garage a “one stop shop” – a bit like a doctor, there to fix you but also to offer you advice.”

Wyne Jones

GMF

———-

“Predicting where the industry will be in five years time is something we are all interested in and many of us are influencing daily. Without going into too much detail the general theme we can see playing out is market consolidation, happening at all levels throughout the European supply chain.

We expect there to be fewer manufactures, producing a wider range of products in five years time. The economics of stock and distribution overheads alone will see this change happening as transport costs become an ever larger percentage of individual item costs. There will also be fewer distributors, the ones that remain will be larger, likewise there are likely to be fewer buying groups and trading alliances as natural market consolidation takes effect.

Today’s generally flat market conditions will remain as the norm for the aftermarket; even though the numbers of cars on our roads might still grow, increased component life and cheaper replacement vehicles at the bottom of the market will combine with ever higher fuel costs to result in an ageing car fleet being replaced as much as repaired.

Any significant growth will result from pro-active businesses taking additional market share, exporting into new markets, or introducing new products to the market.

How will the market change and adapt? A key focus has to be a stockless supply chain with multiple daily deliveries. The OEM’s have recognised the aftermarket opportunities and will increasingly seek new ways to leverage market share.”

Tony Wilson

Chairman, Klarius Group

“So let’s focus on the independent automotive aftermarket retailer.  Right now, the next five years could seem a daunting prospect. Not only is the economic climate endlessly miserable but just when everyone had stocked up with winter products there was barely a frost!

We all know what the challenges are going to be – supermarkets taking a bigger share, declining footfall in the High Street, large multi-site factors making hard parts very competitive, and those annoyingly entrepreneurial hand car-wash people stealing what used to be bread and butter shampoo and wax sales.

It is easy to predict the steady decline of the smaller automotive retailer.

But it doesn’t have to be that way. There is opportunity. Wiser heads than mine will talk about harnessing the experience and expertise of the staff, providing advice and knowledge that the multiples can’t, adding services that create value and convenience for the customer, not trying to compete on price alone.

All of that is vital, but wasted without communication.

Customer loyalty starts with the retailer. Find out who your existing customers are. Capture e-mail addresses. Build a database. Talk to them.  Involve them.  Decide what makes you unique in your locality. Promote what you have to offer.

Find ways of extending your market reach through existing customers.  Be creative about expanding your audience.  Use the technology that is all around you and is largely free.  Never before has personalised marketing been cheaper or more effective. This is today’s world.  Those that embrace it will prosper.”

David Kent

CEO, Saxon Distribution

———-

“The automotive parts industry could look very different in five years time. The hybrid electric vehicle will be taking a bigger share of the car market, as consumers will need a mortgage just to fill up their vehicle with conventional fuels. The car manufacturers will be introducing even longer warranty periods in an attempt to keep customer’s vehicles in their workshops for even longer periods.

This will all have an effect on the aftermarket parts business, as an even greater proliferation of part numbers will be needed to service the customers ever increasing demands for the right part, at the right price and delivered at the right time.

As well as the challenges this will present to the industry it will also produce an array of opportunities, with products from the new breed of cars having an increasing demand in the parts aftermarket and selling for a much higher value than their current day equivalents.

The bottom line is, even in five years time as today those who listen to their customer’s needs and requirements will continue to flourish and be successful, while those that don’t will cease to exist.”

Colm Maguire

General Manager, XPart

———-

“Over the coming years we predict a growth in popularity of ‘cloud computing’ solutions as garages, factors and retailers look to streamline their IT procurement and maintenance.

Fueled by media coverage and the attraction of simplicity and lower investment, the aftermarket is becoming increasingly aware of the benefits of cloud computing. Interest is steadily gaining momentum and we anticipate an increase in the deployment of hosted and web-based solutions.

Cloud computing solutions provide an alternative means of acquiring and using software. Rather than purchasing software” up-front and installing hardware on-premise, users rent their software ‘on demand’ as a service over the internet.

By utilising existing hardware and charging on a per-user basis, the cloud delivery model reduces the up-front capital investment and improves monthly cash flow. And because the service is fully managed by the vendor, it also alleviates the burden of hardware maintenance, software updates and data security.

We also expect to see more aftermarket companies utilising innovative e-commerce and mobile solutions to improve purchasing efficiencies and enhance customer service. Often embedded within or connected to cloud solutions, features like portals, websites and electronic ordering not only streamline sales and purchase transactions, but also add value to business relationships and encourage customer loyalty.”

Gareth Flower

MAM

———-

TMD Friction has just achieved what can only be described as the “Holy Grail” in friction material development through the Epad. Without compromising on the safety aspect of brakes, TMD Friction invests millions into the comfort factors of braking, in this particular case a “no noise, clean wheels” material.  Traditionally these materials have been targeted where there is a low braking performance requirement such as North America and Asian markets which leads to a lower friction performance and longer stopping distances.  Conversely in European markets every brake pad has to achieve a higher friction performance of which dust and noise are often symptoms of achieving performance and temperature resistance.  Epad solves this issue, using unique new technology epad generates performance from a friction material transfer between the brake pad and the brake disc, this transfer layer delivers cleaner braking performance by reducing wear of both pad and disc, not just almost completely eliminating brake dust from the wheels but also increasing the life of both components.

Vehicle manufacturers have for their own reasons kept the identification of parts complicated and continue to do so.  TMD Friction is investing time and money to ease this pain for its customers.   A more comprehensive VRM lookup (Vehicle Registration) is being developed as we speak along with strengthening key partnerships with counter top catalogue database groups such as MAM.  The ambiguity of parts identification is becoming a thing of the past and the days of sending numerous combinations of parts to a garage on the basis that some of them “might” fit are now limited.  But what of paper catalogues?  Is the industry now seeing the demise finally of the “industry bibles” as motor factors and garages alike take to technology?

There is an increasing issue of internet trading where members of the public are able to go and purchase their parts on-line and then take them to the garage for fitting.  Are these parts reputable?  Given this situation and a subsequent component failure does not the liability therefore lie with the garage that fitted the part?  Does it damage the profit stream of the distribution chain?  Garages have relationships with local motor factors but parts can be bought from anywhere in the world by a member of the public, the local garage still gets the business but the motor factor misses out, where does it leave this long term relationship?  It is promoting localised price wars through price matching which for the consumer is great news but the opposite for the industry driving down profitability therefore pressurising cost, which in turn can jeopardise safety.”

Lawrence Bleasedale

TMD Friction

———-

“Whatever the world economy throws our way it’s unlikely to see a decline in the worldwide use of the car, so there will continue to be a need for an efficient and competitive aftermarket. This may see some weaker businesses not surviving whilst the stronger ones will invest and grow.

In difficult times, it’s a wise and possibly brave man who invests for the future. Those that don’t invest will fall by the wayside as they cannot react to the changing market place. Investment can be financial but it can also be practical, helping the trade to understand new products and making them easy to sell to their customers

It will become an increasingly  technology driven market place as vehicles continue to become more and more complex with the drive towards even greater fuel efficiency. The lighting market has been particularly dynamic over the last few years with the introduction of new technologies and product innovations and we see no reason for this to change. Ring has been at the forefront of developing the performance lighting sector and this now accounts for a large part of the market. Ring has also developed charging systems to suit the very latest battery technologies for the next generation of vehicles with Stop Start.

The average driver is less competent at DIY than 10 years ago. They are less likely to be able to change the consumable items on the car never mind attempt a service. Garages and retailers should seek to capitalize on this. By offering to change a bulb or fit a wiper blade at a competitive price they can not only earn extra profit but by going that extra step will create customer loyality  and repeat business.

We repeatedly hear the apparent threat that the internet brings to all established distribution and in particular, the effect it has had on conventional music and book sales but the experience of my own daughter is typical of many new younger drivers.

She is a typical on line consumer buying books and music via the web but regularly returns to the small independent garage in Nottingham to look after her car. The reason ?  They took the time and went the extra mile. When she needed to replace a broken mirror glass, they didn’t patronize her, charged  sensible prices for the lens and the fitting at a time that suited her. It’s not rocket science, but a simple friendly approach particularly to new female drivers, will reap its rewards.

The auto trade has the opportunity to add value to what it does creating long term sustainable sales. As drivers retain their vehicles for longer there is an opportunity to sell added value products to those drivers. Getting drivers to upgrade to Performance Halogen bulbs or Long Life bulbs will benefit both the driver and the retailer and grow the market.

Changing a bulb is more of a challenge than before so it makes sense to fit only quality bulbs that are built to last .

The” instant solution” generation will rightly demand the best products to be delivered quickly and competitively. Suppliers will need to be equipped with the latest technology products or offer products that support those products.

That alone will not be enough as consumers are faced with a bewildering choice of suppliers through both the internet and conventional supplier routes.

When it comes down to it, it’s the whole package that will count ,sure price will always be a factor, but the reason to return to a supplier will be a key driver for the future.

It will be that point of difference that will mark out the suppliers of the future both to the trade and the consumer.

It’s the added value that a supplier delivers that will see that supplier rewarded with business growth.”

Nick Cameron

Marketing Director, Ring

———-

“There will be further consolidation with investors seeing the automotive aftermarket as offering a good business opportunity.

LKQ will lead the way in reshaping the crash and repair market, brokering deals with major fleets and insurers.

I foresee possible vertical integration in certain areas of the industry and increased internationalisation of the European markets.

Technology continues to develop and will lead to opportunities for good workshops to invest and specialise. Those small workshops that lack motivation will disappear.

Manufacturers need to ensure best possible access to required data to enable workshops to continue to repair effectively.  There is a huge opportunity for groups/manufacturers to facilitate bundles of support initiatives to help them.”

Nigel Morgan

Managing Director, Schaeffler Automotive Aftermarket

———-

“Unfortunately I can see the industry shrinking over the next 18 months to two years.  Too many people in the motor trade have revelled in past glories while the trade has moved past and now they are not in a financial position to do what is required to survive this recession.  Also there has been a general down turn in footfall and add on purchases that has had a ripple effect throughout the industry.  It applies to all sectors of the Trade, suppliers, retailers, factors, garage etc.  The problem is that luxury purchases have gone downhill considerably and people are thinking long and hard before buying anything.  The key now is providing the end user with as much information as possible to avoid any margin of error and ensure that the next inquiry they make comes through your door.

However, there have been many success stories in these areas.  Distributors have been able to capitalise on the reluctance for shops to stock, online sellers have been able to stretch into new market places, suppliers have been investing in new and innovative products to try and prevent stagnation and retailers have been branching into hard parts and garage equipment.  Those who will survive this recession are those who are looking to identify USPs within their market place and who support their customers/suppliers.”

Dan Kimpton

Mountney

———-

“I believe we’ll see further consolidation in all areas of the industry, from vehicle manufacturers, part suppliers and factors.

With car sales still relatively low (and likely to remain so for sometime), the vehicle manufacturers with their many trade club incentives are clearly trying to take a bigger percentage of the aftermarket as they look for other opportunities. This is also evident by the likes of Hyundai, Kia and Vauxhall offering extended warranty periods or parts for life initiatives.

As consolidation in the market inevitably means that some companies will get bigger, it doesn’t necessarily mean they’ll get better. There will still be opportunities for smaller well-run companies who deliver good service and support to their customers to thrive and develop. These companies, who treat their customers well and not just as an account, can provide something the big multi-nationals can’t.

However, businesses of whatever size will only be able to survive by improving their business efficiencies and identifying the right part first time is integral to these efficiencies, whether it is at the supplier, distributor or installer level. This means that accurate parts catalouging throughout the supply chain will be a necessity, not a luxury.

We all need to work together for the good of the independent sector and ultimately for the good of the motorist. We can deliver every bit as good a service as the franchised dealer, but without the cost.

As the vehicle manufacturers don’t actually produce replacement parts, the dealer should be the last place that the workshop should turn and not the first.

Accurate, comprehensive data updated regularly will be the key to delivering the customer service that will be required moving forward and to keep up with the vehicle manufacturer/franchised dealer. The more we can do for our customers the better the benefits will be for all of us.”

Shaun Greasley

Commercial Director, TecDoc UK & Eire

———-

“Well if the movies are anything to go by then by the year 2015 we will all be in flying cars powered by nuclear fission…back in reality I can only dream about flying Delorians. However it is clear that although vehicles haven’t taken flight yet they are getting more complex as manufacturers strive to meet even tighter legislation, save weight and build class leading products.

The opportunities will be where simpler products become more and more complex. In years passed, for example, exhaust systems would consist of pipes and mufflers and more recently converters and diesel particulate filters. Today, to meet future emission targets, manufacturers are forced to add further parts to the exhaust system to trap, filter and control the exhaust gases. This will turn an easy to fit exhaust into an emission control system complete with its own control unit, sensors, additive and other ancillary components. So the opportunity is clear; more complex will equal more parts in a system and potential more things to go wrong. It will also bring up the challenge of being more difficult to diagnose problems and failures and what actually needs replacing to correct the issue. This is just a small example on one product group

Continuous training will be paramount to understand the evolution of a vehicle and how the systems fitted to it work and interact with each other. That applies whether you are a parts distributor or a garage. How can you truly do the job right if you don’t understand the parts you are selling or fitting?”

James McGaughey

Tenneco Walker

———-

“Distributors, wholesalers and retailers that do not adapt and include new means of revenue including on-line and direct sales are businesses that are more likely to suffer a decline in the current economy over the years to come. Investments in I.T are crucial to deliver and develop these new solutions for the future. Distributors need to step up by increasing their service offering to customers by supplying Just In Time and offering a one stop shop.

Retailers are also increasingly looking to consolidate suppliers that are able to offer a more comprehensive service. Retailers must differentiate according to the level of the service they supply, such as technical support, help with identifying correct fitments and if location of store allows, then providing a free fitting service on items like wiper blades. The increase in components adds complexity. Vehicle reliability reduces potential sales opportunities longer term but the added expertise required to service the additional complexity creates its own profit opportunities. Ultimately, UK businesses will need to expand outside of the UK and Europe into emerging markets that are not as sophisticated to enhance growth.”

Peter Schofield

Tetrosyl

———-

Over the next five years, I think we will see more market consolidation; right through the supply chain from manufacturers and suppliers, to distributors and garages. The strong will partner with the strong to remain competitive. More emphasis will be placed on service; it will be the added value a company can offer which will make or break a deal, as in the current climate price cannot continue to be the only differentiator.

In five years’ time, the aftermarket will operate on a more global level. This means we will have to adjust to fewer independent customers. But those that remain will be larger, international and in some cases, global. Customers of the future are likely to be bigger in terms of size and scope than the trading groups of today. Organisations of that size develop their own unique culture, and create a specific way of doing business. Our challenge will be to successfully adapt ourselves to the different requirements of each customer. These future ‘super’ customers will increasingly develop functional specialisms such as: product marketing; supply chain management; technical data services and channel marketing.

TRW announced its most aggressive growth strategy to date last year with a program to open or expand 11 plants during the 18 month period from the second quarter of 2011.    Nine of these openings/expansions are in China; we’ve opened a new braking plant in Mexico; a new steering plant in Poland and our first aftermarket sales office in Dubai, Middle East.

No matter how tough the climate is, there are always opportunities for forward thinking business that have economies of scale and resources to invest. The challenge for the independent garages will be the level they can afford to invest in diagnostic training. A mechanics role has always been about diagnosing problems accurately; with the increasing complexity of vehicles and their electronic systems this is only going to get tougher.

The market needs to manage and overcome the fear and problems caused by the current economic climate and continue to forge ahead and invest. Invest in people, invest in diagnostic equipment and training, invest in more advanced data and scheduling systems, invest in stock.

By doing this, we will modernise at levels of the supply chain and emerge with a stronger industry than ever before.

Suppliers need to invest in bringing the latest technologies to market and not just allowing them to be supplied through the OES channels. Suppliers also need to invest in ensuring the data supplied is 100% accurate and easy to use and most importantly that ranges available are second to none. At TRW we pride ourselves on being an OE supplier and as such we have a head start so we invest very heavily on being first to market with products, technologies and range extensions.

Distributors need to invest in having the right stock available and being able to correctly supply the right part first time every time (obviously a lot of this depends on the supplier getting the data right in the first place!) but the distributor needs to understand how to correctly use the data supplied.

Garages need to invest in the latest diagnostic equipment and training. Marketing, up selling and cross selling is important – when a customer needs new wheel cylinders, do they need new shoes?”

Jon Sellars

TRW

“There will be a lot of people out of it because they just won’t be able to cope with stocking and technology.

It will be interesting to see which of the big boys are still around. You might think that they’ll all still be here, but history teaches us otherwise.”

Brian Spratt

Chief Executive, IAAF

———-

“In five years time the advances in technology should make it easier to access a wider variety of technical information through cheaper and more versatile diagnostic tools.

Whilst it may appear that things will have improved I fear only the most commercially aware garages will flourish in such an environment.

Garages that offer a quality service, customer satisfaction and charge a price that matches the quality of the workmanship will prevail in an environment where cars will be much more reliable and go even longer between services.

The challenges will lie in the ability to evolve with the changing technologies, to continually learn about the changing technologies and the systems attached to them and to ensure that they are keeping up to date with government legislation. If a garage can do this the opportunities will rise from the amount of garages that won’t be able to evolve at the same pace. Competition will be much smaller.

Considering that fuel is soon expected to be in excess of £2 a litre we anticipate alternative fuel vehicles and more cost effective modes of transport to be thriving. We expect vehicle manufacturers are likely to be focusing on hybrid vehicles rather than electric vehicles. Garages need to adapt ensure they can work with the broader range of vehicles that are likely to pass through their workshops.”

Stuart James

Director, IGA

———-

“There’s no doubt that the industry is evolving.  Of course, in terms of economics, sales are thinning and service is more competitive but there are also fundamental changes afoot in certain areas of the overall business operation – some of the changes subtle but fundamental nonetheless.

Initially, I see two areas in which we need to collectively adapt.  Firstly – most obviously – on competitive pricing.  Against a backdrop of a long-term decrease in vehicle sales, the service and repair arena is the battleground for the next five years.  Retaining value on older vehicles is uppermost in business plans and we’re now seeing the most forward-thinking businesses offering service plans for cars between three and ten years old.

However, as well as competing amongst ourselves as an industry on price, the individual businesses that have moved to replicate the wider retail trend of recognising online, consumer-led marketing are the ones that seem to me to be flourishing.  Today’s consumer – and I say consumer, not motorist – is a highly confident, empowered one.  Businesses need to mirror consumer behaviour and use the internet to their advantage.  It’s where people compare, contrast and either select a product or disregard it – often in a matter of minutes.

Frankly, our industry has been slow to adapt to the digital-savvy customer and, one thing’s for sure, garages certainly need to adapt to survive.  Forget the next five years:  government has already mentioned online reviews in relation to self-regulation of MOT test centres as something it’s looking at over the next six months.  Sit up or, more to the point, log-on, and take note.”

Chris Mason

Managing Director, Motor Codes

———-

“I’m on record as saying that the next five years will be the most interesting that our trade has ever seen. The advent of new technologies and power sources will re-draft the entire architecture of the service and repair sector: No? Just review your last week’s job cards: removing the engine, clutch, transmission and associated ancillary components and look at what you have left.

What we don’t know is what the new motive systems will bring with them by way of service and maintenance requirements – we do know they will bring change. Change in investment, training, perhaps even facilities and all of this must be undertaken with clear focus on generating a return on the investments that we make.

After 42 years in the industry I’ve listened to doomsayers on a never ending basis – I don’t hold with this. Change is inevitable but our under-invested infrastructure means that public transport is not even a considerable option – individual transport still has a rosy future but the future will be different.

Those who see their future in this industry need to embrace this change with open arms and a sound business head. As inevitable as the change will be business casualties and the focus for management during this volatile period must be pro-active planning to meet the future head-on – profitably.”

Mike Owen

THIS MONTH’S QUESTION: Where will the industry be in five years time?

“I think that it is generally agreed that the future of the industry is going to become more challenging for various reasons; including complex vehicle technology, longer service schedules, customer service expectations and political influences on competence and accountability, all these issues will reduce the number of Independent Repairers able to work on the modern vehicle.

There will be number of key influences that will drive the need for more professional business management within the aftermarket. These include Euro 5 & 6 legislation, the BSI, ATA accreditation and the Motor Industry Codes, enhancing both the business and the individual. For those within the industry who embrace change will survive

• Economic situation can only get better
• Customers looking for true alternative to dealers
• Smaller garages not investing  – more work for others
• Recruitment – opportunity to find skilled personal
• Continual investment in personnel and equipment
• Parts & equipment suppliers offering better deals
• Passion for excellence and customer service – believe in what you do

How does it need to change?

It needs to explore what other successful businesses outside the automotive arena are up too and absorb some of the practices and strategies used to recruit and retain customers. It needs to place the customer at the beginning, middle and end of any business plan!”

Andy Savva

Owner, Brunswick Garage

———-

“There’ll be a lot of people out of it because they just won’t be able to cope with stocking and technology.

It will be interesting to see which of the big boys are still around. You might think that they’ll all still be here, but history teaches us otherwise.”

Brian Spratt

Chief Executive, IAAF

———

“I believe the future is very bright for the industry PROVIDED it adapts to the customer needs and gives the very highest levels of service. Yes, cars are becoming more complex but that’s been the case for the last 20 years and all garages have had to adapt even if the industry doubters had Independent garages written off! As much as a challenge as technology presents it offers opportunities too, franchised dealers seem unable to train their customer facing staff to the customer needs and the good independents out there should take full advantage of the disgruntled motorists looking for brilliant customer service away from the dealers. The days of the one-man band operations I think may be numbered as motorists need customer service and I feel that even the best technicians can’t offer this whilst making a living actually working on the cars.

Opportunities include more motorists looking to save money against franchised dealers and receive better levels of service and care. With the MOT frequency now confirmed all testing stations can sleep easy knowing that the safety of motorists and the security of regular MOT income is secure. With motorists keeping privately owned cars for longer the amount of work we are able to offer our customers obviously increases and there is danger of them getting pulled to an all inclusive service package on a new car. The independent garage industry has an opportunity to lift its game to force a compulsory scheme membership with government backing which should be followed up with technician licensing similar to Corgi for gas fitters etc – these would result in improved confidence in the motorists eyes and drive the cowboys out of business.

Challenges it faces include manufacturers forcing radical technology onto their cars – hybrids although complex aren’t a major concern as there are so few purchased but with the search for improved efficiency by all manufacturers we have to hope that the solutions generated allow independents to thrive and not die. Other challenges in my opinion are the myriad of so called garage schemes all offering X, Y or Z but in essence all they achieve is greater confusion in the motorist’s eyes potentially pushing them to the security of the franchised dealers!

MOT testing standards & quality must be a priority and a mandatory price introduced. We need to educate motorists on the vital nature of the test and eliminate the discounters who simply test vehicles with a view to recouping their discounted price by dubious failure points! The VOSA guidelines also need rewriting to allow testers to pass or fail with confidence as the current wording can be easily misinterpreted. We simply must introduce a government backed COMPULSORY quality scheme that is recognisable by all motorists – currently the strongest scheme with the most members has the worst name and the worst scheme with sales driven membership and dubious criteria has the best name! We also need to look forward to the licensing of all vehicle technicians in a similar line to Corgi etc so that motorists can rest assured that the car they drive is safe and maintained by a skilled person.”

Chris Meredith

Owner, ABP Motorsport

———-

“So let’s focus on the Independent Automotive Aftermarket retailer.  Right now, the next five years could seem a daunting prospect. Not only is the economic climate endlessly miserable but just when everyone had stocked up with winter products there was barely a frost!

“We all know what the challenges are going to be – supermarkets taking a bigger share, declining footfall in the High Street, large multi-site factors making hard parts very competitive, and those annoyingly entrepreneurial hand car-wash people stealing what used to be bread and butter shampoo and wax sales.

It is easy to predict the steady decline of the smaller automotive retailer.

“But it doesn’t have to be that way. There is opportunity. Wiser heads than mine will talk about harnessing the experience and expertise of the staff, providing advice and knowledge that the multiples can’t, adding services that create value and convenience for the customer, not trying to compete on price alone.

All of that is vital, but wasted without communication.

“Customer loyalty starts with the retailer. Find out who your existing customers are. Capture e-mail addresses. Build a database. Talk to them.  Involve them.  Decide what makes you unique in your locality. Promote what you have to offer.

“Find ways of extending your market reach through existing customers.  Be creative about expanding your audience.  Use the technology that is all around you and is largely free.  Never before has personalised marketing been cheaper or more effective. This is today’s world.  Those that embrace it will prosper.”

David Kent

CEO, Saxon Distribution

———-

“Despite the consolidation in the industry we’ve witnessed over the last few years, there is still over-supply at many levels of the distribution chain. Therefore it is likely that there will be further consolidation, particularly amongst suppliers and distributors.

Consolidation requires major funding, which means that either the big European distribution companies or more private investment companies such as LKQ or H2 will come into the industry to provide the financial backing these mergers/acquisitions will need.

Inevitably some traditional brands that operate in localised markets will disappear as a result of this market globalisation and it is likely that some ‘British’ brands could well be among these casualties.

What are the opportunities and challenges it faces?

The biggest challenge for suppliers to the independent aftermarket is to maintain their market share in the face of increasing competition from the original equipment suppliers (OES). Accurately cataloguing their parts will become an increasingly difficult process because access to the raw catalogue data from the vehicle manufacturers is so hard. Therefore parts manufacturers will have to join forces and work together alongside a cataloguing system such as TecDoc to remain competitive.

For the workshop vehicle diagnosis and the training of technicians are the major issues, but the tough economic climate is likely to lead to an increase in the average age of the car parc, which will bring with it additional aftermarket business.

Other opportunities for the industry will come from the new technology employed by hybrid and electric vehicles and the new products that will need to be serviced and repaired by workshops willing to make the investment required to tap into it.

How does it need to adapt?

It is vital that the repair side of the business develops new concepts to ensure that there is a large enough skilled workforce that is equipped with the knowledge and technical qualifications to be able to carry out the work that will be required.

On the supply side, an effective cataloguing platform is crucial.”

Milko Wolf

Dayco Regional Sales Manager, North Europe

———-

“There is gathering momentum towards a much better, and publicly recognised, accreditation for independent garage technicians. Government legislation and garage schemes are making bold efforts to raise the profile of the independent sector and the distribution chain should use this momentum to help raise the standard for the consumer, and help to provide longevity for the independent installer.

Consolidation of the various accreditations that currently exist with a view to raising the profile of the independent sector. A public awareness campaign should be planned, funded and executed with the aid and support of the distribution chain to ensure the independent aftermarket  has a sustainable future. Too much uncertainty with regards to consumer choice still exists, despite the existence of essential legislation, such as BER.

Today the market is faced with growing price challenges with an increasing demand for lower prices for good quality products. The market relies upon installers supporting the distribution chain and offering the consumer quality products and real value. It is too easy to take cost out for the consumer where this may not exist in reality. This can then lead to lower quality products at lower prices. The benchmark for independent installers is the OE sector so cheaper maintenance does not need to become a reality.”

Nick Racklyeft

Regional Manager, Gates

———-

“We plan to be thriving, vibrant & growing of course!

OK, so I’ve always been a little optimistic but I believe that independent car accessory stores who can adapt to a market where added value & service provides differentiation will prosper. Those who are determined to race to the bottom on price will struggle to compete with internet retailers and online channels like Ebay & Amazon.

There will be less pure car accessory stores and those that still remain will have found other niche areas to compliment their offering. That could be in leisure products, cycles, motoring related toys etc. Even stores who retail and factor will find it hard to compete against protective car dealerships, extended warranties and the investment needed to cover the car park.

Opportunties for stores prepared to change and adapt and provide ‘fitted services’ will be sought after as a result of a generation who are generally far less able to ‘DIY’ either because of the complicated nature of electronics on the car or because basic practical skills are no longer taught in schools.

The major challenge will not only come from the internet but also from a supply chain who no longer see the need, can afford or are geared to service small independent retailers.

In order to survive these retailers will need to be in a thriving group like A1 Motor Stores of course!”

Glenn Mason

Co-Director, A1 Motabitz

———-

“This is not an easy thought to contemplate, but here goes.

My first though would be as long as politicians etc do not have anymore hair brain ideas like the scrappage scheme that affected the aftermarket in a big way by reducing MOT testing and servicing older vehicles, things might be ok.

I am finding that being in a recession is actually good for my business as my turnover is increasing , we are gaining many more customers who would of normally changed their cars every three years.  We have also found customers have remembered the last recession and how costly it was for them by not servicing their cars.

The opportunity we face now is to in still confidence and good value for money in the independent aftermarket trade so as we slowly come out of the recession and people once again start to buy new cars they will remember you don’t have to take them to a dealer to get good honest service, with that in mind I intend more training for my staff and keep my eye on the ball for new equipment to deal with new technology”

Julian Glover

Owner, Anglo Continental Cars.

———-

“I think it’s difficult to predict what’s going to happen in the market with all the problems that are about, the cost of fuel is one problem, and also the fact that cars these days are leaving the factory with so much equipment on them.

My word of advice, particularly for retailers, would be to keep doing what they’re doing – keep doing well, and keep offering customers that extra level of service.

You also need to be on the lookout for new ideas, don’t be afraid to do something new. For example there’s a growing sector of the market that’s starting to feature retro or classic cars – suddenly it’s becoming all the rage to own a classic Mini or something like that.

The beauty of that sector is that when people buy classics there’s an increase in what they’re prepared to spend on it. That means a lot of extra business for the local retailer, and I can see that increasing in the coming months.

With that in mind I would also say to get yourself along to the various classic and retro shows that are coming up. Even if you don’t exhibit there go along and start talking to owners, they could be your next customers.”

Joe Elliott

———-

“Could technology be our biggest threat and opportunity over the next 5 years?

February 2011 saw Toyota unveil its latest attempt of an automated vehicle powered by Google, is this future of the automotive aftermarket? Well maybe not in 5 years but it could certainly be a real possibility in 10 years time. Whatever happens, technology is changing the face of the humble motor car and we are seeing massive leaps in the development sector when it comes to the design and manufacture of vehicles.

Technology is a real threat to the aftermarket, for vehicles to be repaired knowledge and understanding is prime, garage owners need to embrace technology and training rather than looking  at it as if it is a two headed beast from the world of unknown. Tackled correctly it’s no more of an obstacle that the once feared BMW service light, a cutting edge feature of its time but one now regarded as being simplistic.

Technology offers great opportunities to those willing to invest a little time and money in training, whether you are a car parts distributor, vehicle mechanic or parts adviser, training in the understanding and methodology underpinning the vehicles workings will allow you to better service the needs of you customer, this in turn will aid the independent aftermarket in keeping its market share in the parts and repair sector.”

Damian Milling

Group Marketing Manager, Mill Auto

———-

“There are three current trends that will set the agenda over the next twelve to twenty four months and contribute significantly to the market size and dynamic over the next five years.

The first of these is the fierce price competition at all levels that many in the industry are currently engaged in; this is driving down margins and profitability. The need to compete is creating the second trend with many companies turning to the introduction of lower cost parts and even the introduction of recognised brands sourced via low cost countries, both of these will contribute to destabilising and devaluing the market. The final trend is the unrelenting expansion within an already over subscribed market with larger groups seeking new sites and determined to keep up with noisy neighbours.

The market size is unlikely to grow significantly over the next five years and the current number of outlets at every level is unsustainable; it is inevitable that their will be a number of casualties  and these will not be restricted to small independent businesses.

The impact of the internet will also have a profound impact, once the issue of first time accurate application of parts is achieved this will quickly take off and take market share.

In the nineties one of the big buzzwords was ‘disintermediation’ whereby supply chains were shortened and links in the chain removed. Twenty years on the technology exists and the need to compete will mean fewer larger distributors and a move a way from delivering the parts before the garage has had a chance to put the phone down. Coupled with this will be new product ranges and technologies and a resurgence in Vehicle Manufacturer presence in the market.”

Peter Cox

General Manager, Motaquip

———-

“In February, Transport Secretary, Justine Greening, set out clear directives for the garage industry to move forward and to meet the expectations of motorists. She said, and I quote, ‘our garages are crucial to ensuring that Britain’s garages continue to be the safest in the world’.  She also said: ‘Most are doing a good job but the latest data shows there is room for improvement.’

In order for garages to give motorists the very best information about their performance and to improve, they need to fully engage with their customers and use feedback to continuously enhance their services.  I see in the coming years, good garages and Dealers – even the small ones – increasingly using the latest feedback systems, online bookings for MOTs and servicing,  and digital communications technology, such as social media tools, Facebook, LinkedIn and Twitter, not only to build a loyal customer base, but to find out what customers really think of their garage experience.    Thankfully, there are accessible training schemes offering immediate benefit to garages and their customers, and cost effective tools readily available to start putting processes in place.

In the course of my work, I have spoken to and visited hundreds of garages and Dealers and have found the good ones are ready to adapt, evolve and face the challenges ahead.”

Rachel Greasby

General Manger, Forte UK & Good Garage Scheme

———-

“In five years time the advances in technology should make it easier to access a wider variety of technical information through cheaper and more versatile diagnostic tools.

Whilst it may appear that things will have improved I fear only the most commercially aware garages will flourish in such an environment.

Garages that offer a quality service, customer satisfaction and charge a price that matches the quality of the workmanship will prevail in an environment where cars will be much more reliable and go even longer between services.

The challenge’s will lie in the ability to evolve with the changing technologies, to continually learn about the changing technologies and the systems attached to them and to ensure that they are keeping up to date with government legislation. If a garage can do this the opportunities will rise from the amount of garages that won’t be able to evolve at the same pace. Competition will be much smaller.

Considering that fuel is expected to be in excess of £2 a litre we anticipate alternative fuel vehicles and more cost effective modes of transport to be thriving. We expect vehicle manufacturers are likely to be focusing on hybrid vehicles rather than electric vehicles. Garages need to adapt ensure they can work with the broader range of vehicles that are likely to pass through their workshops.”

Stuart James

Director, IGA

———-

“The UK public have an insatiable demand for personal mobility, limited only by motoring costs and availability of convenient and affordable public transport alternatives. So cars continue as the preferred option for 75% of our growing population. Total aftermarket value continues to increase slowly, but with many changes.

New car sales staying low. Average age of the parc increasing. Owners of older cars tend to favour local independent garages. Despite the best efforts of the vehicle manufacturers to make their cars difficult for independents to repair, it will be hard for dealers to compete from high-cost premises designed for new car sales. Their share of the aftermarket will continue to decline despite rearguard actions with extended warranties and dealer service plans.

The UK car parc, already the world’s most diverse, will not get any simpler. The long-predicted consolidation of world car manufacturers shows no signs of happening soon with at least 6 Chinese VMs entering our new car market.

High motor insurance premiums and excesses will cause an increasing number of motorists, guarding their no-claim bonuses, to have minor collisions repaired privately. We could even see the return of garages offering both mechanical & body repairs.

A much greater emphasis and awareness of cost by the motorists: the marketing of servicing, MOT, bra kes, tyres and other ‘user-definable’ jobs – predominantly over the web – will be largely price-driven. The independent garage’s ongoing task will be to sell the benefits of regular servicing and preventative maintenance.

Garages must adopt multiple labour rates. Low margins on the basic jobs – but high margins on complex jobs electronics, diesel & petrol injection, turbos, exhausts etc. This will fund their essential investments in equipment, training, signage & branding, web marketing, IT etc.

The task of the parts distributor is to assist the independent garage to embrace these changes and grasp new opportunities. This means holding very high levels of range, availability, delivery and price competitivity on basics items. Additionally, the required stock range for specialised and slow-moving items will continue to explode – Euro Car Parts already stock 120,000 different parts and we lare adding nearly 1,000 new parts every month. The smaller distributor will have difficulty in financing these stocks and much larger groups, probably pan-European, will predominate.”

Sukhpal Singh Ahluwalia

Managing Director, Euro Car Parts

———-

“Life is pretty tough for all of us in the independent automotive aftermarket at the moment and, frankly, it’s not going to get any easier anytime soon, so we’d all better be prepared to stand up and be counted if we want a successful future. Cars are getting more and more complicated, customers are getting more and more savvy, dealers are getting sharper with their marketing and are having some limited success in attracting older cars back into their service bays.

The chances are that if you bury your head in the sand for the next five years, when you eventually extract it things won’t look much different on the surface but if you think standing still really is an option, be prepared to find yourself so far behind in the race that you’ll never catch up.

But it’s not all doom and gloom, there are huge opportunities for all of us if we are prepared to work closer as an industry.

Manufactures need to sell product to distributors (Factors), Factors need to sell product to garages and garages need to have a constant flow of vehicles passing through their workshops to survive. Oh, and we all need to make a profit. So we’re all relying on Mr Consumer to choose the independent aftermarket when he needs work on his car.

In my view there are three key points we have to address:

• The erroneous belief that new car warranties will be affected by allowing anyone other than a dealer to look after your car during its warranty period. We all need to get behind the IAAF’s Right 2 Choose campaign but we also need to give consumers confidence that we really can look after their car, that we know what we’re doing, we won’t cut corners and that they’ll get everything that a dealer can offer for less money.

• The crazy idea that we all have to give product away. There’s a belief (in some quarters) that customers won’t pay for quality any more. We are all feeling the squeeze on margins and we really don’t have to! Consumers will pay for quality products and quality service. I’m not disputing that there are drivers, usually with older vehicles that want cheaper parts but that’s OK, we can do that too. We have to be confident in our skills and we have to be prepared to charge a reasonable price for those skills.

• The idea that we can muddle through with little or no training – and by training I’m thinking technical, marketing and customer service. Without training we are going nowhere, any of us. Just over 30 years ago, a young, naive, Richard Swann emerged from the University of Salford with an honours degree in Vehicle Engineering Science tucked under his arm. At the time I knew (in a lot of detail) how a car worked but think how things have changed in the intervening years – and some of us haven’t! It’s not just technical training though; customers have become significantly smarter, they expect to feel good when they part with their hard earned cash these days. If we do nothing else as an industry, we must embrace training and in particular technical training. Otherwise we might as well pack up and go home.”

Richard Swann

Sales Director, GSF

NEXT MONTH: We ask the panel for their thoughts on consolidation in the aftermarket

“I think that it is generally agreed that the future of the industry is going to become more challenging for various reasons; including complex vehicle technology, longer service schedules, customer service expectations and political influences on competence and accountability, all these issues will reduce the number of independent repairers able to work on the modern vehicle.

There will be number of key influences that will drive the need for more professional business management within the aftermarket. These include Euro 5 & 6 legislation, the BSI, ATA accreditation and the Motor Industry Codes, enhancing both the business and the individual. For those within the industry who embrace change will survive

• Economic situation can only get better
• Customers looking for true alternative to dealers
• Smaller garages not investing  – more work for others
• Recruitment – opportunity to find skilled personal
• Continual investment in personnel and equipment
• Parts & equipment suppliers offering better deals
• Passion for excellence and customer service – believe in what you do

It needs to explore what other successful businesses outside the automotive arena are up too and absorb some of the practices and strategies used to recruit and retain customers. It needs to place the customer at the beginning, middle and end of any business plan!”

Andy Savva

Owner, Brunswick Garage

———-

“I believe the future is very bright for the industry PROVIDED it adapts to the customer needs and gives the very highest levels of service. Yes, cars are becoming more complex but that’s been the case for the last 20 years and all garages have had to adapt even if the industry doubters had Independent garages written off! As much as a challenge as technology presents it offers opportunities too, franchised dealers seem unable to train their customer facing staff to the customer needs and the good independents out there should take full advantage of the disgruntled motorists looking for brilliant customer service away from the dealers. The days of the one-man band operations I think may be numbered as motorists need customer service and I feel that even the best technicians can’t offer this whilst making a living actually working on the cars.

Opportunities include more motorists looking to save money against franchised dealers and receive better levels of service and care. With the MOT frequency now confirmed all testing stations can sleep easy knowing that the safety of motorists and the security of regular MOT income is secure. With motorists keeping privately owned cars for longer the amount of work we are able to offer our customers obviously increases and there is danger of them getting pulled to an all inclusive service package on a new car. The independent garage industry has an opportunity to lift its game to force a compulsory scheme membership with government backing which should be followed up with technician licensing similar to Corgi for gas fitters etc – these would result in improved confidence in the motorists eyes and drive the cowboys out of business.

Challenges it faces include manufacturers forcing radical technology onto their cars – hybrids although complex aren’t a major concern as there are so few purchased but with the search for improved efficiency by all manufacturers we have to hope that the solutions generated allow independents to thrive and not die. Other challenges in my opinion are the myriad of so called garage schemes all offering X, Y or Z but in essence all they achieve is greater confusion in the motorist’s eyes potentially pushing them to the security of the franchised dealers!

MOT testing standards & quality must be a priority and a mandatory price introduced. We need to educate motorists on the vital nature of the test and eliminate the discounters who simply test vehicles with a view to recouping their discounted price by dubious failure points! The VOSA guidelines also need rewriting to allow testers to pass or fail with confidence as the current wording can be easily misinterpreted. We simply must introduce a government backed COMPULSORY quality scheme that is recognisable by all motorists – currently the strongest scheme with the most members has the worst name and the worst scheme with sales driven membership and dubious criteria has the best name! We also need to look forward to the licensing of all vehicle technicians in a similar line to Corgi etc so that motorists can rest assured that the car they drive is safe and maintained by a skilled person.”

Chris Meredith

Owner, ABP Motorsport

———-

“This is not an easy thought to contemplate, but here goes.

My first though would be as long as politicians etc do not have anymore hair brain ideas like the scrappage scheme that affected the aftermarket in a big way by reducing MOT testing and servicing older vehicles, things might be ok.

I am finding that being in a recession is actually good for my business as my turnover is increasing , we are gaining many more customers who would of normally changed their cars every three years.  We have also found customers have remembered the last recession and how costly it was for them by not servicing their cars.

The opportunity we face now is to in still confidence and good value for money in the independent aftermarket trade so as we slowly come out of the recession and people once again start to buy new cars they will remember you don’t have to take them to a dealer to get good honest service, with that in mind I intend more training for my staff and keep my eye on the ball for new equipment to deal with new technology”

Julian Glover

Owner, Anglo Continental Cars

———-

“In five years’ time the British car park will have continued to age and our distant relations in car sales will seek to retain the customers they do have with lucrative clear, menu type pricing and initial purchase servicing plans.

They have an arsenal of advertising and marketing tools with which to accomplish this so we in the aftermarket will need to react with superior customer service in order to compete with this strategy.

I believe we are in a position in which to do so by comparing their “fast food” type menu with our Michelin

Star standard service and this distinction will have to be brought to the attention of our consumer group.

Marketing is no longer completely defined by time or a measured space, social media platforms enable us to nurture relationships and network on a real and personal level.

Word of mouth is out there in the digital medium and is here to stay. A reluctance to utilise it would be like ignoring the potential customer that walks through your door. Using it badly will only achieve a waste of your time – are you going to embrace this growth method of networking now or later?”

Hayley Pells

Avia Speed Shop

———-

“It’s a big year for the aftermarket, with the planned changes to block exemption threatening to pit de-franchised dealerships against existing independent garages, so it’s definitely going to be a turning point for the industry. Businesses will need to invest or die – the public expect main dealer standards, even at aftermarket prices. Those who step up to the mark will reap the rewards.”

I’d say it’s not so much a ‘big step’ that’s going to significantly affect our industry, as a continuing process.  Every part of the aftermarket, from parts to service, is undergoing consolidation at the moment – with companies striving to create national chains through acquisition, or clubbing together to form buying groups – and changing legislation is accelerating this drive. But businesses don’t necessarily need to join a franchise or align with a recognised brand to adjust to these market conditions, they simply need to advocate and fulfil high standards of service.”

It would benefit the aftermarket to educate motorists on the options available to them when it comes to parts, since most don’t appreciate the different benefits of new, remanufactured and repaired parts – which means they can’t choose the most cost-effective option for themselves. Additionally, a recognised standard for reman parts would go a long way to providing reassurance that their installation would not jeopardise the warranty on a customer’s car.”

Chris Paxman

Managing Director, TT Automotive

Parts make our world go around. They might also make your head spin if you don’t keep on top of what you’re sourcing, where from and how.

An industry outsider, or an aftermarketeer from another country, would marvel at the way our supply chain hangs together and works to deliver millions of parts a week (or even a day, perhaps).

The aftermarket is an incredibly adaptable, nebulous and ingenious thing, but could everything not just be a little bit easier, somehow? A bit more simple?

How much should we worry about quality? Are parts from China a threat to our livelihoods? What about getting parts from dealers and vehicle manufacturers?

OE or not OE, that is the question

Well, it’s one of the questions, and depending on who you listen to, of course, the answer is very different.

Why would you want to fit anything but an original part, say OE suppliers. For peace of mind you can’t beat it. Nobody wants to supply a bit that comes back to bite them, whether they’re a factor or a garage.

Nigel Morgan is the Managing Director of the Schaeffler Group: “The only sure way to guarantee you’re supplying the right product is to go OE, but then I would say that, wouldn’t I?

“There is a danger that in the current climate people are prepared to dip their toes a bit more than they have in the past.”

There’s a pressure on price, but Morgan also thinks vehicle manufacturers and franchises are going to fight harder for a slice of the aftermarket supply. He’s surprised VMs haven’t yet gone ‘undercover’ to expose some of the worst parts that might be being used and tarnish the whole aftermarket with the actions of a dubious few.

“It’s going to happen. They’re going say, “These guys are fitting spurious parts that are life endangering, and you’re asking us to give them information to help them do the job?””

Hang on a minute, though. There are plenty of companies with fine reputations for matching quality parts, components which might even outdo the ‘built to a budget, not to a standard’ part demanded by a vehicle manufacturer with a beady eye on costs and profit.

The trouble is knowing one company from the other. CAT has visited plenty of those with long-established and profitable brands that would do anything to risk their reputation. They’ll be well known to you, too.

AMK spoke out about the danger of white box products in the last issue and detailed the lengths they take to ensure quality. Dan Joyner at First Line also said: “The companies that opt for non-branded white-box products are substituting quality with margin.”

It may well be that no part has to go through a testing procedure to signal that it is of matching quality, but that doesn’t mean it can’t be done.

Lee Quinney is General Manager at AC Delco, part of the GM empire: “Those parts suppliers that continue to thrive will be organisations that strive to deliver only the highest quality and most reliable parts. Anyone failing to reach such standards will become exposed at some point; that’s inevitable. It’s all about building up faith in a particular brand or supplier.”

Perhaps a system of approval for every part that wishes to claim it is matching quality would clear the waters, but could this be done. The consensus is that it would be too difficult, and anyone that takes a brief look through the catalogues will recognise this pretty easily.

Peter Cox of Motaquip says: “The cost associated with testing every part through an independent test house would be prohibitive and the time taken to test every part would equally rule out this route.

“The testing of parts is however a good idea and policing parts claiming to be matching quality either by random testing or in response to either industry concerns or consumer issues would be welcomed by Motaquip.”

Chinese crap and counterfeits

Unfortunately not everyone seems worried about their reputation or the impact sub-standard parts could have on the aftermarket. We’ve met one company, for instance, which was happy to hold up a part to a web camera during a Skype chat to a factory in China in order to get components made.

We hope everyone reading this would run a mile if asked to supply or use a part like this.

While China is the source of much of the low-quality parts available, it’s obvious that you can get substandard, dangerous and fake parts made in Germany.

With the right tooling and facilities China also produces the highest quality components. OE suppliers all have facilities in China, and if you’re in the business of supplying matching quality parts you’ve either already been there or need to book some flights.

China, though, is also most likely to be the source of counterfeit parts which obviously have no regard to any quality standard whatsoever.

Even one counterfeit brake set can be a lethal problem, but how big is the scale of the problem really?

Patrice Claverie is Director General of Corteco: “Counterfeiting is mainly based in North Africa and Middle Eastern countries. In Europe so far we don’t have many problems with fake products. Outside of Europe it’s a totally different situation.”

There are some astonishing figures about, though  – $12 billion worth of fake parts each year, says the USA’s FBI.

Though shock absorber giant KYB has some reason for hope: “There are fake parts, although fortunately not so much in the UK. Across Europe it’s another story, especially in Eastern Europe.”

Peter Cox of Motaquip sounds a note of caution amidst the economic pressures, too: “They are not a major issue at the moment but the potential is always there for the problem to grow. Everyone in the industry has a duty of care to raise concerns over parts they believe may be counterfeit.

“This risks not only the reputation of the industry but potentially the lives of our customers.”

Where and how to get your bits

Bill Stimson, marketing director of ECP, says: “Even if you count each part just once, then it’s fair to say that the aftermarket, as a whole, moves millions of parts each week. At times of peak demand it wouldn’t surprise me if a million plus parts are moved in a day.”

That’s an awful lot of bits flying around the place. Any garage chasing its tail to find the cheapest of them is in trouble. Similarly, any factor who doesn’t try to sell the benefits of a more expensive part to a garage is also doing a disservice.

For many garages we speak to, it’s often not too hard a sell a better bit once the benefits are explained. Not always, of course, but often, so if you’re struggling on this front try and listen to Mike Owen on page 17 and make better friends with them. Seriously…

Rob Hall is Director and Technician at the TJ Hall and Sons garage in Sandford-on-Thames: “You need to fit parts you can trust as we don’t like doing a job twice.

“As for price matching, we will only do this on rare occasions. We just tend to see who has stock so we don’t end up with dead cars on ramps. Price isn’t everything its more a reliable service we look for.”

Hall reckons 80% of his parts come from one place – ECP as it happens – but this may not be an altogether typical approach. Plenty of factors complain to CAT that garages still phone five factors to race one part to their door.

Have factors worked themselves into a position where they now need to overservice garages? Peter Cox of Motaquip: “Yes!  The industry as a whole has created a monster. The UK is currently over supplied at every level and as things get tighter financially all factors have to look at ways of managing costs.

“If factors don’t work in unison, and garages don’t modify their processes, we will not get away from the current inefficiencies which ultimately put parts prices up.

“I would look to have one or two main suppliers and focus my spend with them and in return would expect excellent support and competitive terms.”

Lee Quinney is sanguine about the position factors are in, but thinks there’s a potential solution to help them: “Commerce revolves around competition. It will be market forces that dictate who survives and who doesn’t, and not just in the current climate.

“Online is definitely the way to go and the moves that suppliers and the motor trade have implemented over recent years reflects this.”

Andrew Page, Euro Car Parts, Unipart – they all offer garages management systems that aim to make it as easy as possible for garages and factors to identify all of the parts that are required for a job the first time. They help with orders, fitting, planning, marketing and more.

Group Auto is developing its own, while the Parts Alliance hopes that an initial 150 site rollout of its GS Onestop garage management system will eventually extend to three or four thousand sites.

Commercial Director of the Parts Alliance Andrew Field said: “Every single transaction with us now starts with a vehicle registration number. We write all our catalogues to suit the information that we have – we want to avoid ordering the wrong parts at all costs.

“You have to make online ordering easy for the garages to use. We can’t dictate to garages, the only way we can increase uptake is to communicate with them.

Dingbro is leading the charge with the system. Chairman Allan Dingwall sings its praises: “Onestop is a big leap forward because it gives garages a full package, and it’s also linked into Allicat catalogue which we’ve found to be a very efficient tool in the marketplace.

“People are looking for more streamlined ways of running their businesses now. The next generation is now coming through to the trade and they’re much more switched on. “

Trade Clubs

There’s been a quiet row about CAT taking advertising from the Vauxhall Trade Club going on for a couple of months now.

We were contacted by a factor group which questioned whether we were still an aftermarket magazine since we’d taken their advert (yes, by the way).

We invited the factor to have a reply and a rant at our expense on our opinion page, but they weren’t interested. Instead, Brian Spratt of the IAAF had a good dig saying: “It’s about time independent garages understood who their friends are, and how the dealers are scheming to take business away from them.

Another supplier of alternative parts that didn’t want to be identified told us: “Why on earth would you want to feed the hand that’s doing it’s best to choke you?”

Vitriolic stuff, and something that the Vauxhall Trade Club was keen to have a comeback on, too. After a long wait for their reaction it was, well, very measured.

“The Trade Club network always strives to deliver the correct parts on time every time, delivering peace of mind for independent workshops and their customers.
All parts supplied by Vauxhall Trade Club are of the same quality as those parts fitted on the line at the factory. Vauxhall parts are put through a rigorous testing procedure to ensure compatibility with the vehicle to which they are to be fitted.

Captive parts

A final thought on parts from Corteco’s Claverie. Parts are becoming more and more complex, and he thinks that means the aftermarket will have less and less option but to call on the OE supplier for the components:

He says: “For our business 80 percent of our total parts are captive. Car manufacturers work in a complicated way. We expect so much in terms of lower emissions, and for this to happen we need better technologies.”

It’s an amazing figure, and it raises an eyebrow with many. KYB says: “Eventually someone will offer an alternative anyway.”

So we’re back to ingenuity. The market always seems to have found a way, and the chances are it will continue to make an excellent stab at the challenges it faces going forward.

If the aftermarket can find the best way to deal with parts, not just a good way, then it can start to make a serious amount more money.

Over the coming days we’ll be interviewing all of our CAT Awards 2012 winners, finding out what winning means to them and their companies, and asking what business advantages the awards could bring. Stay tuned!

Read more from our 2012 Award winners in the current issue of CAT Magazine

Today we catch up with our Lifetime Achievement Award winner, Joe Elliott

“I always wanted to go into the motor trade. My grandfather started our family workshop business in 1908 and I used to visit him with my father, I would ride my bicycle in between the petrol pumps.

We were often accused at AIMS of making the group very elitist – but that’s exactly what I wanted it to be. I wanted the group to be filled with the very best motor retailers.

I’ve been in this business for so many years, I was so proud to win this award. To win something like this is a fantastic feeling.”

Chicane’s Gary Barak adds: “He is without a doubt the most passionate man that I have ever come across.”

———-

Person of the Year award winner, NGK’s Brian Childs

“I was quite surprised to even be nominated, so to actually have won is a great honour. I’m quite touched, particularly since it’s people within the industry voting for the award – that’s the most pleasing thing about it.

“I’ve had a lot of very warm messages since the award, so I’m delighted and thrilled. It couldn’t be better.”

NGK’s Tim Ward added: “He’s a highly respected figure within our company and the industry. He’s been with NGK 37 years. He’s an inspirational man within the business and a very likeable guy.”

———-

Deputy General Manager Tim Ward from NGK, our Suppliers of the Year 2012

“We’d never be so blaze to say we weren’t surprised. There’s never any assumption in our company that, just because we won it one year, we’re going to win it the next.

The team is everything. Every department helps, they all contribute to the ultimate service that means we get comments from customers saying we’re a good and easy company to deal with.

The commitment that we like to show to our customers, from wholesale to garage level, is respected.

There’s a very tough job to be done and we don’t underestimate what is required. If we don’t get the cars in the garage, we don’t get the sales. It’s all about encouraging motorists to continue servicing their cars.”

———-

Wyn Jones from GMF, CAT Magazine’s Factors of the Year 2012

“There are so many good garages in our area. We have a fantastic and loyal customer base.

If anyone complains to us it’s a gift because you’ve got the chance of putting it right. It’s when you lose the customers that it’s a problem.

The other thing our customers like is the consistency of parts. We do offer choices, with a budget range on certain lines, but our garages know what they’re buying from us.

[Winning] means a lot to the company and the staff. Everyone is fearful because of the economic climate we’re in, so to belong to a company that’s winning and going forward is nice. We need to be pushing things on a positive note.

When you’re in this industry you very rarely get told you’re doing a good job!”

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Glenn Mason of Motabitz, CAT Magazine’s Retailer of the Year Award winner 2012.

“I think it’s a great win for our business, and I hope it will help us to win more new business. We’ve already been speaking to the award sponsors, Haynes, about how we can maximise this opportunity.

We’re already putting the word out, it’s really going to help us to continue to improve the credibility of our industry.

I think the awards help to drive business growth, every business should try to be nominated. They’re a great advert for the aftermarket.

You don’t have to batten down all the hatches to survive the next year, you just have to be realistic and optimistic.”

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Thule’s UK Business Manager Peter Barker, winners of CAT Magazine’s Technical and Safety Innovation Award 2012. 

“It shows that all the investment in time, money and experience to ensure a safe quality product that is technical and innovative is recognised not only by the consumer but also by respected members of our industry.

We all are consumers once we close our laptops at the end of the day, and I am sure that like myself you look to buy the products that have been recognised by respected media, winning this award will definitely give us the edge on the competition.

I think that both small and large businesses alike should see this award as a serious confidence builder for our industry. For the smaller business  it is an opportunity to be seen beside the multinational and global companies and stand proudly shoulder to shoulder with them.”

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Steve Leys, CAT Magazine’s Aftermarket Worker of the Year 2012

“The day was very enjoyable. I really wasn’t expecting to win at all, but I’m really chuffed. I’ve been a rep since I was 21, and it’s great to receive this honour.

We’re putting the word out to the wider TRW group so everyone knows about the success we’ve had.

When all the text messages and emails were coming in wishing me congratulations I was quite taken back. It was amazing to see the reaction on my wife’s face, too.

This is definitely a career highlight for me.”

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Chris Meredith, ABP Motorsport Director and winner of CAT’s Garage of the Year Award in 2010, 2011 and 2012.

“The award was great. I always like to take some of the staff members to these events because at the end of the day it’s all down to them – if I’d known we were going to win I would have brought everyone!

The awards were especially good because it gave us a chance to catch up with other people in the industry, and see there were people from high up positions in the market.

It’s very humbling as always to see such nice things written about us by our customers, and to hear such nice things said about the work we do. Getting this third award has been fantastic.

I think the awards we’ve won have certainly helped to bring in new business for us. When we first won an award from CAT it bought in almost 200 new customers. I think the same might happen again this year.

I think we’ll try again next year, at the end of the day it’s all up to our customers.”

And remember, next year it could be your business!

More than 140 aftermarket heavyweights converged on Twickenham Rugby Stadium recently for the 2012 CAT Awards.

The great and the good applauded our eight award winners, including retail magnate Joe Elliot for his lifetime achievement award.

In a new departure for the awards, four guests were invited onto the stage to give their thoughts on the state of the aftermarket and its opportunities going forward.

Thanks to Peter Cox, Andy Savva Richard Shortis and Bill Stimson for taking part in the debate which touched on some interesting issues and hit a nerve or two.

Read more about that, and our winners in more detail, in the Awards issue of the CAT coming to you soon.

2012 CAT Award Winners

Supplier of the Year, sponsored by Phocas – NGK

Factor of the Year, sponsored by Motaquip – GMF Motor Factors

Retailer of the Year, sponsored by Haynes – Motabitz

Garage of the year, sponsored by Euro Car Parts – ABP Motorsport

Person of the Year sponsored by Trico – Brian Childs, NGK

Aftermarket Worker of the Year sponsored by Denso – Steve Leys, TRW

Technical & Safety Innovation of the Year sponsored by TRW – Thule easy-fit snow chains

Lifetime Achievement Award, sponsored by NGK – Joe Elliott