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CORONAVIRUS AND THE AFTERMARKET

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CORONAVIRUS AND THE AFTERMARKET


Note: This article was written in mid February 2020, when the world was a very different place… – Editor

 

You will have heard all about it: the virus that migrated from species to species in China before spreading around the world. Thousands of column inches have been written, mostly about the human cost and how it has affected the way that people meet and travel, but how will it affect the parts supply chain, and more specifically the aftermarket?

Here’s what we know for sure: factories in China closed as usual for the Chinese New Year celebrations, but didn’t reopen for weeks afterwards. When they eventually did start up again, there were reports of many of them having a fraction of the usual number of staff, due in no small part to many being in isolation, be it voluntarily or at the behest of the state.

Then of course the virus spread, with huge tracts of Asia, including South Korea and Japan, implementing an array of preventative measures to control the outbreak. Closer to home, Italy was accused of under-reporting known cases and parts-producing towns in the country’s ‘motor valley’ have been belatedly shut down.

READ: BREMBO SHUTS ITALIAN SITES AMID CORONAVIRUS CRISIS

SHY RESPONSE

Yet when we asked companies who must surely be exposed to supplier shortages, the answers we got were surprisingly coy. Halfords, for example, wouldn’t answer our list of questions, but did respond with the statement: “We are monitoring the Coronavirus situation carefully. To date, the virus has not had a material impact on stock availability but we are continuing to work closely with our partners across the Far East.”

Similarly, Euro Car Parts answered our request with the simple sentence: “To date, we’ve not experienced any issues with stock availability because of the Coronavirus outbreak. We’re aware of the risk of disruption it still poses, and our supply chain team is working on contingency plans and is in regular dialogue with our suppliers to ensure we’re prepared to mitigate against any potential impact.”

Some other companies simply declined to discuss the issue at all. However, the fact that parts and accessory supply chains have, at the very least, been interrupted is not in dispute.

READ: IAAF BOSS: GOVT. MUST HELP THE AFTERMARKET

TYRE SHORTAGE

Tyres are known to be in short supply at the moment, especially budget products which are typically produced in China or Malaysia. The problem has become such a concern that TyreSafe, a body set up by wholesale distributors and tyre dealers, has issued a release advising motorists to fork out a bit of extra cash for mid-range or premium tyres, and not to buy part-worns, of which the organisation has a low opinion, as it has repeatedly voiced.

Stuart Jackson, Chair of TyreSafe, said: “The vast majority of [budget tyres] are imported into the country from China and across South East Asia where the outbreak of Coronavirus has led to governments closing facilities such as schools and factories to limit the spread. As a consequence, the level of supply the UK has become accustomed to for many products has been reduced.

PHOTOGRAPH BY Feature China / Barcroft Media

“Our advice is to seek a good deal on a mid-priced tyre and carry out regular checks to get the best out of that tyre over its full potential lifespan.”

National Tyre Dealer Association Chair Stefan Hay said that most members had a good stock of mid-range tyres, but added: “There can be no doubt that we could see a potential shortage of budget tyres if quarantine and export restrictions are maintained.

“This will affect all manufacturers with an interest in China and other South East Asian countries. For example, I’m aware that production at two of Pirelli’s three factories in China remains suspended in response to the spread of coronavirus. Pirelli has also reported that its entire expat workforce has left the country along with their families. Goodyear Tire and Rubber Co. ‘temporarily’ closed its headquarters and factory in China and the beginning of February and it is uncertain as to how temporary that is.”

Hay added that restrictions in supply can soon bounce back, citing a shortage of tyres a few years ago due to a trade dispute between the EU and China, which was swiftly resolved.

SHUTDOWN

It isn’t just tyres that are affected. The widest range of factory closures is in southern China, which is the heartland for manufacturing electronics, as well as the site of numerous foundries for making hard parts. Murray Silverman, Director of Streetwize Accessories in Manchester, is candid about the impact that factory shutdowns will have on UK business. “ALL businesses will be affected,” he emphasised. “Some might not realise it yet.”

“All suppliers that we have spoken to have advised at least a three week delay as it stands today,” Silverman told us when we spoke in mid February, adding that the date was ‘moveable daily’ and that at the time of speaking, his company could not even contact many of the factories that had not yet returned to work.

A big question mark hanging over the whole situation concerned just how long these delays might become. “Nobody knows how long these delays could go on for,” said Silverman. “We contacted all our customers to advise them that there will be shortages that will escalate during the summer months or earlier and advise them to order whilst we have stocks available. Some customers have reacted but unfortunately there will be those who will realise too late despite warnings.”

One company reacting to the situation is battery charger manufacturer Ctek. “Our suppliers have restarted their production and supply following Chinese New Year,” company spokesperson Stig Mathisen told us. “We are mindful however, that there is a risk that the outbreak could worsen and will continue to monitor the situation closely, introducing contingency plans if there is a requirement to do so.”

Sourcing products from elsewhere is not an option for many, particularly given that northern Italy, a major European production centre of parts, is arguably in a worse state than China at the time of writing. In any case, for the majority of companies it isn’t simply a case of switching production – new suppliers need to be tested, pricing and quantities have to be agreed and then go through any relevant type approval. “Sourcing product elsewhere is not an option, even if we could find the resource and the pricing was acceptable, it takes time to go through our QC and graphics teams,” explained Murray Silverman, adding that in any case a lot of UK and European-made products would also be in short supply, due to the amount of raw material and components that come from the Far East.

A situation that no-one two months ago could have foreseen is the possibility that UK companies might have to let employees work from home if the number of infections in the UK continues to rise. Quite how this could work for a parts distributor or a service and repair garage is anyone’s guess, but if the outbreak spreads further and there are more fatalities, who knows what might happen in the future?

Inevitably, the world will return to normal, and when this happens a new set of challenges may arise. “Even when factories do return, there are likely to be transport issues from the factory to the port and a lack of vessels to cope,” commented Silverman, adding that: “Another eventuality that may occur is that shipping companies and freight forwarders raise their rates to try to pull back the enormous amount of business they have lost.

“There will be further impact in the future,” he concluded.

Posted in CAT Features, Factor & Supplier News, Garage News, Latest News, latest news, News, Retailer News, special newsComments (1)

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SECURING THE RIGHT PERSON FOR THE JOB


Pri Chauhan – Steps aftermarket hiring managers should take between offering a new hire the post – and when they actually start.

Pri Chauhan, Director at PG Automotive

Pri Chauhan, Director at PG Automotive

These days, even a firm agreement in the form of a signed contract isn’t enough to guarantee that a candidate will show up on their start date. With mass skills shortages in the automotive industry in general, and the power placed increasingly in a candidate’s hands, expert recruiters and employers are both finding it more and more difficult to secure excellent people for job vacancies.

As a recruiter, our job is to have ideally have multiple candidate options for filling a position. What is sometimes overlooked is how experienced and skilled candidates have just as many choices for which door they walk through next…
From the job offer stage, to the start date, there’s a lot that can go wrong. Here’s my three top tips on how to close a candidate on a job offer:

KNOW YOUR AUDIENCE
Knowing your audience is worth thinking about before you even think about prepare a job specification. Get to know the industry that your candidates’ work within, and ensure that any and all communications around the position use relevant language and buzz words to suit.
A Regional Manager will look for different benefits to someone seeking a job as a Parts Advisor. Yes, these are extreme examples, but the distinction should be that clear. Whatever you say and do now will have a lasting impact on your new employee; and we all know what’s said about first impressions.

Just like the old cliché, ‘Dress for the job you want, not the job you have,’Your job adverts should be dressed up with convincing language that compels the right candidates to apply. Using the right tone of voice will also benefit your brand as a recruiter,
letting candidates know that you truly understand their industry and its requirements, too.

WINE AND DINE
Once you’ve made a candidate an offer and they have verbally accepted…call them! Let them know how happy you are that they have chosen your business to continue their career and remind them again why you chose them in the first place. Arrange to take them out for a bite to eat. Make them feel valued, integral, and above all, important. This is their moment in the sun so let them bask in it. You will reap the benefits later, and this is but a small investment in a potentially lucrative relationship.

Put the whole recruitment process behind you at this point, and let the candidate look forward by keeping the momentum and excitement going about their new role. Make sure that any doubts your candidate may have are dispelled through warm and inviting language, and an excellent all round experience. Every part of the candidate’s journey, from the application to the start date, should reflect your brand.

Make sure you show the candidate why they’ve made the right career choice. Most people just need a little validation to be happy with a decision that they’ve made.
Promote conversation, talk with the candidate, and explicitly ask them if there’s anything that unsettles or worries them about their new job. Good objection handling at this point can make all of the difference. Strive to market this new job in such a way that the candidate doesn’t even want to consider any other job interviews or offers.

KEEP-IN-TOUCH 

Don’t play games with your candidate before their start date

Don’t play games with your candidate before their start date

Four to 12 weeks is a long time to wait for a candidate to start work. During that
time a lot can happen. They might have other interviews scheduled, they might be rethinking the job itself, or they might simply be worrying about starting in a new place.

Small things like a gentle email checking in can be of huge benefit to a candidate. Keep in mind that the end goal is to have a happy and contented new employee that will benefit your business for years to come; not just to fill a vacancy. Communication with your future employee doesn’t need to be extravagant. A brief phone call, or email will help put the candidate’s mind at ease. The unknown is always scary so provide your future employee with a road map of sorts, with a clear and easily defined idea of their eventual destination – your client’s workplace.

In the past a job offer was all it needed to be. It was the candidate’s (and your) end goal. But in an competitive job market, where the applicant frequently has more than one offer, it’s important to make sure that your business is marketed convincingly. Follow the above steps and you’ll go a long way towards guaranteeing that your candidate arrives punctually on the agreed upon start date, full of drive, passion, and enthusiasm.

The recruitment process doesn’t end when a candidate starts their new job. There’s still the probation period for your new employee to conquer to ensure that they feel secure. They are still very new to the company and your culture, and remain at risk of not settling in well or even getting a call back from their previous employer.

For more info on PG Automotive, visit pgautomotive.com or call 0845 643 0497

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

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