Tag Archive | "Sales"


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Ford is set to close around 50 percent of its UK dealerships as it embarks on a bold strategy to streamline its commercial operations.

The move, which was announced at an investor conference today (26 January), is part of the ‘Ford 2025 dealer plan’ which the brand says hopes will build “a stronger and more sustainably profitable Ford sales and servicing network”. Between 210 and 230 stores are expected to be affected.

It is hoped that the majority of the affected dealers will remain in operation as dedicated aftersales hubs, and the firm anticipates that 90 percent of new car buyers will still be able to reach a dealership within 30 minutes.

Some of Ford’s smaller UK dealerships will be converted into standalone service centres, with Ford claiming that “customers will not be unduly inconvenienced” by the shake-up.

An official Ford statement read: “We are working together in a spirit of partnership with our dealers and their investors to build a stronger and more sustainably profitable Ford sales and servicing network for the future in the UK, which works for the mutual benefit of our businesses and for our commercial and passenger vehicle customers.”

It is the largest consolidation of a VM dealer network in UK to date, and follows similar downsizing initiatives at Honda and Vauxhall. Despite heavy restructuring over the last 20 years, Ford has concluded that “dealer network profitability is still not sustainable”.


Vehicle manufacturers are gradually exploring new ways of selling new cars. Last year saw Volvo launch the ‘UK’s most comprehensive’ online car sales service, while Mercedes activated a new digital showroom this week, which provides real-time stock availability data and a finance quote function.

At the beginning of 2019, Ford revealed the first details of its overhauled European business strategy as part of a $14bn drive to cut costs globally.

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Transport Secretary Grant Shapps

Transport Secretary Grant Shapps has told the BBC that the proposed date for the ban on the sale of new combustion-engined cars could be brought forward another three years to 2032.

The deadline for new petrol, diesel and hybrid sales had been posted at 2040, before a shock government announcement last week advanced the plans by five years. Mr Shapps’ comments today will frustrate industry bodies like the SMMT, which labelled the 2035 proposal ‘extremely concerning’.

Mr Shapps said the forceful shift to electrification would happen by 2035, “or even 2032” in an interview with BBC Radio 5 Live. He also confirmed that the government will launch a consultation on the feasibility of such a tight turnaround.


It is not a complete surprise; when Prime Minister Boris Johnson announced the 2035 date last week, he said combustion-fuelled cars would be taken off sale as soon as possible.

The move comes ahead of an international climate summit in Glasgow in November, at which global leaders will discuss ways to bring down emissions and slow down climate change. The UK is working towards a target of net zero carbon emissions by 2050.

The SMMT has repeatedly stated that the government’s emissions targets are unrealistic and impracticable.As long ago as 2018, CEO Mike Hawes said: “The 2040 target is challenging enough; but to achieve market-wide penetration of zero emission vehicles by 2032 is virtually impossible without a massive upgrade to the national charging infrastructure and the reinstatement of a world-class package of incentives to encourage uptake of electric and plug-in hybrid vehicles.”

He reaffirmed his beliefs last week, when he accused the government of having “moved the goalposts for consumers and industry on such a critical issue”. He notes that EV vehicles still make up just a fraction of new car sales, and the government has sent mixed messages with the withdrawal of its plug-in car financial incentive.

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Component firm Hella has released its financial figures for the first half of the financial year, revealing a significant drop in sales and earnings. 

From 1 June to 30 November 2019, Hella recorded a decline of 3.2 percent in currency and portfolio sales, and 6.7 percent in reported consolidated sales – a drop it attributes to the sale of its wholesale arm in 2018.

The sales shortfall resulted in a loss of €39 million (£33 million) year-on-year, with pre-tax earnings posted at €257 million (£220 million). Hella said: “This substantial reduction is largely due to extraordinary income booked in the prior year from the sale of the wholesale business.” 


Another factor was a global reduction in new vehicle output. Hella sold 1.6 percent less products to vehicle manufacturers compared with the same period in 2019, but notes that it still “managed to outperform the broader market primarily based on strong demand for electronic products, particularly in energy management and sensors, and on strong business in the American market”.

The firm’s aftermarket division also suffered last year, with weakened demand in South West Europe and the Middle East contributing to a €13 million drop in reported sales. Sales to workshops were down as well, although the company considers this a result of especially strong sales in 2018, when a wave of new regulation was introduced.

Profitablity in the aftermarket was, however, improved, with cost optimisation strategies bringing pre-taxearnings up to €29 million from 2018’s €25 million. The operating profit margin was 9 percent, compared to 7.6 percent the year before.


Commenting on the report, Hella CEO Dr Rolf Breidenbach predicted that recovery will be a long process. “The market environment remains very challenging. A strong, sustained recovery is not likely to emerge in 2020,” he said.

“However, we are still reaffirming our annual targets. We will vigorously capitalize on the current phase of market weakness to improve our competitiveness and continue investing in innovative solutions for the market trends of electrification and autonomous driving.”


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Toolmaker Snap-on has halved the start-up fee for people wishing to join its mobile sales franchise for a limited time.

Alex McNellan took advantage of the cut-price offer

The package is available across the UK, and the only condition applied to the new offering is that new recruits must be able to train and be out on the road by 30th March 2020. The same offer had been trialled in across a limited area in 2018.

“I’d been a Snap-on customer for years and had always been interested in the starting up with my own van, but it was the promotional price that encouraged me to finally decide to just go for it,” says Alex McNellan, who launched his business during the 2018 promotion. “I think it’s an incredible opportunity for people like me, who might be on the fence about investing in their own business”.  




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By Adam Bernstein

We’ve seen the sale of plenty of family businesses in the aftermarket over the last couple of years. It isn’t just down to the major buying groups stamping their feet either, for all, there comes a point when it’s time to ask whether the business should be sold. The question for most is, how?

According to David Emanuel, partner at law firm VWV and head of its Family Business team, the prime reasons for selling are retirement, the need for investment and no one else to take over.

Take the first – retirement. As Emanuel notes: “for many business owners, a large proportion of their personal wealth may be tied up in the business. Some are able to take profit out during their working life to buy homes and build up pensions. But many need to crystallise that value to fund their retirement.”

Next comes the need to grow the business. As time progresses, some owners ask whether they have it in them to take the business to the next level. Clearly, if a business is not the right size for the market it will not survive; looking for someone external (and usually bigger) to buy out the firm can be a solution which also allows the owner to realise the value in their business.

A variation on this means external investment, for instance private equity investors, who take a stake in the business with a view to exit within three to five years. From Emanuel’s perspective, “this offers the current owners the opportunity to build significantly higher value with external investment while postponing the exit.”

But what if there is no internal succession plan? Emanuel frequently sees family owned businesses wondering whether the next generation want to take the business on: “For many the family is a strength and a USP, and the thought of passing the business to the next generation is attractive. But in practice, successful transfers between generations are rare.”

But few last. A 2015 Economia report, How to maintain a family business, suggests that in the UK only 30 percent make it to the second generation and around 12 percent to the third.

Opportunity Knocks

Sometimes an offer comes in at the right moment so that selling becomes an option. What do you do?

Emanuel’s first response is to take advice.

“Many businesses will probably know who is likely to be interested in buying them, and in some cases informal contact, particularly where there are personal relationships with potential buyers, can sound out interest.”

But he offers a note of caution: “Do not underestimate the potential adverse reaction of staff, customers, and suppliers to rumours of a sale. Maintaining confidentiality for as long as possible is a key feature of a successful exit.”

The message is clear: Seek professional help from the moment you decide to sell. Accountants, solicitors, or specialist corporate finance advisers, can all help formulate a plan, including a strategy for confidentially marketing the business, advice on valuation, and preparing the business for sale.

Sale processes

The next stage is the actual sale which Emanuel says comprises four steps.

“The first,” he says, “is to market the business else no one will know that it’s up for sale.” He says that the firm’s accountants or specialist corporate finance advisers will help put together a sales memorandum and circulate this (on a no names basis initially) to potentially interested parties.” A Non-Disclosure Agreement should be part of the process.

Once a buyer has been chosen, the next stage will be to agree the outline commercial terms of the deal and timescale – “Heads of Terms”. Emanuel describes these as “non-binding in most respects but they provide a framework for the negotiation of the deal from which the parties should not normally stray other than in exceptional circumstances.”

And then there is due diligence – mentioned earlier. “This,” says Emanuel, “is the process by which the buyer seeks to find out about the business, its assets and liabilities, trading relationships and employees.” Experience has taught him that sellers often underestimate the amount of work this generates.

The penultimate stage is the sale agreement where the main contract for the sale will (normally) be drawn up by the buyer’s solicitors to be negotiated with the seller. In practical terms, Emanuel says that most of this will deal with risk apportionment – “who is liable, if for instance, there is a hidden tax liability, or any employee makes a claim after completion for something that happened whilst the seller was in charge?” These issues are, he says, dealt with through a process of warranties – in effect, guarantees.

And lastly comes completion where the documents are signed, the monies are paid, and the business transfers.

In the End

With any complex process the sale will usually take several months from its starting point and involves a huge effort. But as Emanuel has seen, the sale can mean that “owners often have mixed feelings about leaving behind the business they created and have run for years.” His suggestion is to think about what is coming next rather than what has been left behind.


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Don’t let the clock tick down when you need to fill a sales role

Let’s talk about time. If recruiting for a role yourself, you will spend countless hours sifting through applications and initial screenings.

At its most simple, using a recruiter will save you time and to use an example, time is critical when filling vacant sales roles. If the territory is vacant it means that another employee or even the hiring manager is covering the area and this could result in a loss in revenue as customers are not getting the right amount of contact. Another implication, people are human and if someone is covering two roles rather than just their own, it will cause issues. Trust me, I’ve been there!

People will talk sometimes to a recruiter rather than apply direct as it offers them in some cases some anonymity, also the roles I work on are not out there plastered across the job boards for all to see. Using a recruiter cuts out the headache of marketing the role, finding candidates and organising meetings. My ‘specialism’ (a horrible term) is in the body refinish market, but the same rules apply across the aftermarket and elsewhere.

But what if the boot is on the other foot and you are a candidate?. Why would you consider going to a recruiter instead of approaching the firms that interest you directly? Ideally, any good recruitment agency should act as the ‘compère’, between you as a candidate and a potential employer. Putting the right people in front of the right employer is a skill, encountering a large number of variables along the way. Yes, the skills must be right to do the role however much more is involved. There aremany more elements which come together to make the perfect candidate including personalities need to match with company culture and ethics. A good recruiter will understand the needs to match all aspects, the candidate must be right for the business in the same breath as the client being right for the candidate ensuring longevity for both client and candidate alike. Believe me this is no easy task.

Recruiters (well the good ones), have a network of hiring managers, business influencers and decision makers in multiple businesses. Something that as a candidate you in all likelihood don’t have, or not to the extent of an agent. All of these things go back to the issue of making the most of the limited time available – don’t waste yours.


Research shows that from the start of the hiring process the top 10 percent of candidates have disappeared from the market in the first two working weeks. So, considering the average time to hire in the UK is approximately 28 days, the candidates remaining in your process from working day 11 onward are unlikely to be the right fit or the most qualified for your role. However, some companies will attempt to make a ‘good fit’ from the limited candidates now available and in effect taking on someone who doesn’t entirely fit the role because they need it filled and the slow process has cost them the best candidates.

In addition to this, a long hiring process is often the top reason candidates speak negatively about a brand or company. Candidates are now researching online reviews from former candidates or employees in the same way that they would from (say) Trip Advisor, when looking at holiday destinations. The result of this is that it can add 10 percent to the cost of every hire.

Remember the hiring process clock starts ticking as soon as that candidate submits the application not when you review it or when they sit in front of you at interview. By then the damage could have been done and your ideal candidate could have slipped through your fingers! So how long is your hiring process? Do you need to make changes?
Gavin Collier

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HELLA KGaA Hueck & Co., a globally leading supplier of lighting technology and electronic products for the automotive industry, increased Group sales by 8.9 per cent to about EUR 6.4 billion in fiscal year 2015/2016 ending on 31 May 2016 (previous year: EUR 5.8 billion). Adjusted operating earnings (EBIT) also increased by 7.1 per cent year on year from EUR 445 to EUR 476 million. The adjusted EBIT margin was 7.5 per cent (previous year: 7.6 per cent). Special items with negative impacts on earnings – which include particularly the effects of the extraordinary supplier failure in China in September 2015 – pushed EBIT down by approximately 2.3 per cent year on year from EUR 430 million to EUR 420 million. At the reporting date on 31 May 2016, HELLA had about 34,000 permanent employees, almost 5.7 per cent more than in the previous year.

“We have again grown strongly in 2015/2016 in what has been a challenging market environment,” says CEO Dr Rolf Breidenbach. “We are especially proud that HELLA could improve sales across all three segments – Automotive, Aftermarket and Special Applications. This confirms us in our belief that our focused product portfolio and our broad global footprint have put us on the road to success. We intend to continue down this route going forward.”

Sales increase across all segments – Automotive remains growth driver

The Automotive segment again recorded significant growth in fiscal year 2015/2016 on the back of new products and a strong automotive market. External segment sales grew by 10.1 per cent to EUR 4.8 billion (previous year: EUR 4.4 billion). Due to an exceptional, non-recurring charge of EUR 47 million from the failure of a Chinese supplier in September 2015, the earnings of the segment declined by EUR 11 million to EUR 343 million. Growth was driven predominantly by new product launches – including complex LED technologies, electronic systems and components for energy management, driver assistance and electronic steering. HELLA’s broad regional presence was also beneficial.

The Aftermarket segment generated robust sales growth in fiscal year 2015/2016. External segment sales increased by 5.9 per cent to EUR 1.2 billion (previous year EUR 1.1 billion). Operating earnings grew by EUR 7 million to EUR 80 million. Growth was driven mainly by the wholesale business in Denmark and Poland, the garage equipment business and the tangible recovery of the independent spare parts market in Europe.

The Special Applications segment succeeded in stabilising in spite of the still weak demand in the agriculture sector. Sales in the segment grew by 2.0 per cent to EUR 315 million (previous year EUR 308 million). EBIT declined from EUR 19 million to EUR 5 million which resulted from the operating development in the Industries and Airport Lighting sub-segments and the sale of these activities. HELLA has sold these sub-segments in May of the past fiscal year in the context of its portfolio optimisation.

Emphasis on research & development ensures technology leadership

Research & development expenditures in fiscal year 2015/2016 increased by EUR 80 million year on year to EUR 623 million or 9.8 per cent of Group sales, up from 9.3 per cent in the previous year. They resulted mainly from the development of complex innovative product generations and investments in the global development network. The number of employees working globally in research and development increased to about 6,400 in fiscal year 2015/2016. By now, almost every fifth HELLA employee works in research and development.

“Technology leadership is a key differentiator for HELLA,” says Dr Breidenbach. “The passion to innovate and investments in new technologies are integral parts of HELLA’s DNA and the cornerstone of additional global growth.” Today, HELLA‘s development activities in the lighting business focus inter alia on so-called high-definition headlights that improve visibility with several hundred thousand of lighting spots each of which can be activated individually and which result in a significantly higher resolution. In electronics, HELLA supports its clients in the development and implementation of advanced functions that correspond to global market trends including autonomous driving, connectivity and energy efficiency. HELLA continuously adds to its already extensive know-how in these areas.

Solid financing

HELLA continues to rely on its solid long-term financing as the foundation for profitable organic growth. As of 31 May 2016, the equity ratio reached 40 per cent, up one percentage point year on year from 39 per cent. Liquidity (cash and short-term fiscal assets) amounted to about EUR 914 million.

Growth also driven by international networking strategy

In addition to its core business, HELLA also follows a cooperation approach: its international networking strategy has been designed to drive growth further through partnerships with other companies in joint ventures, mainly in order to gain access to complimentary technologies, tap into new markets or client segments and benefit from economies of scale. Overall, external sales of companies recorded at equity amounted to EUR 3.3 billion, out of which EUR 1.3 billion were attributed to HELLA. The pro rata at equity result reached EUR 53 million.

Proposed dividend of EUR 0.77 per share

The management will ask the annual general meeting to approve a dividend of EUR 0.77 per share for fiscal year 2015/2016. This dividend will remain in line with the previous year in spite of the non-recurring charges. Based on 111,111,112 no par value shares, the total dividend payment would amount to EUR 86 million.

Outlook for fiscal year 2016/2017

HELLA also anticipates positive business performance in fiscal year 2016/2017. This outlook is supported by the Group’s three strategic approaches: HELLA will continue to focus strongly on building its own market position based on its significant technological know-how and innovative product solutions that cater to the key mega trends environment and energy efficiency, safety and styling and comfort. HELLA also intends to further advance its global expansion, mainly in China and North America (NAFTA) where the company has identified promising opportunities. The objective is to further strengthen HELLA‘s position as a core vendor and solutions supplier to the automotive industry. In addition, HELLA seeks to further increase its own operational excellence in the global HELLA network.

For fiscal year 2016/2017, the HELLA Group expects sales and adjusted EBIT growth in the middle single-digit percentage range and an adjusted EBIT margin that is more or less at the prior year’s level.

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CEO of Halfords Jill McDonald

There are mixed results for big-box retailer Halfords as it announced a small overall rise in sales across it’s accessories, consumables and technology and another small rise in servicing and parts, but a decline in cycling revenue.

Most of the rise is due to a swell in sales of child seats, which enjoyed double-digit YOY growth. Car accessories overall rose by 4.4 percent, although ‘enhancement’ products such as sat-navs fell, although this was offset by a rise in dashcam sales.

The wet first half of the year also contributed to a 2.3 percent YOY rise in wiper and bulb sales. Perhaps surprisingly given the mild conditions, the group also posted steady results from battery sales.

However, the performance of car accessories couldn’t hide the fact that sales of bikes and related parts were down. Bikes make up around a third of Halfords’ total revenue and the company blamed the wet weather for a drop in sales. “Casual cyclist don’t like the wet weather, and there is not a lot we can do about that” CEO Jill McDonald was quoted as saying by the Daily Telegraph. The company plans to give bikes a shot in the arm with a 20 percent discount in August and new ranges branded by Olympians Laura Trott and Bradley Wiggins.

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Paul Black –  We all know that aftermarket deals are closed with a firm handshake and a game of golf… but is this a very old fashioned methodology?

Paul_BlackNew car registrations are up, used cars are changing hands quickly and the parts and service aftermarket is generally in rude health with the sector being worth hundreds of millions of pounds to the economy.

Nonetheless, we would be wise to remember that the sales process is for the greater part, guided by salespeople. In recent years, we’ve seen a radical (and necessary) shift in mind-set and methodology. A chap named Ken Krogue describes a technique known as ‘inside sales’ which he describes as “professional sales, done remotely or virtually.” It’s not a one-and-done script reading process conducted from a call centre: it’s about nurturing a positive, productive, and mutually beneficial business relationship – with the very real possibility that neither client nor employee will ever meet in person.

This may well sound at odds with the traditional practices of the automotive aftermarket, where face-to-face meetings have for so long been the dominant approach to sales. Nonetheless, inside sales strategies have a number of advantages over the field method. Here are just a few:

Being a salesperson in the aftermarket is by no means an enviable position. It often involves flitting from client to client and place to place, struggling to fit meetings, admin, research, and training – amongst many other things – into an overstuffed itinerary. A lead that turns out to be a dead end can add up to hours of wasted effort.

The inside sales method is designed to minimise physical effort wherever possible (bar the great exertion of picking up the phone or using the keyboard). The idea is that, upon finding a viable prospect,the salesperson should have the time they need to prepare and strategise: they shouldn’t feel like they’re reheating a sales pitch because they’re overburdened with unprofitable tasks, and they shouldn’t feel like they’re giving undue attention to timewasters – possibly the automotive industry’s single greatest scourge.

By using technology to automate essential but time- consuming administrative work, the salesperson can concentrate on solid leads and give them the attention they deserve. Databases allow them to access fresh leads with relative ease, and with a variety of communication methods available, some analogue (there’s a lot to be said for a good old-fashioned phone call), some digital (someone out there is undoubtedly already selling via Snapchat), it’s easier to reach a wider range of customers within the automotive supply chain.

Of course, the humble database is but one weapon in the inside salesperson’s arsenal. Using the right tools, it’s possible to take pre-emptive action.

Technology makes it possible to gain visibility into up selling and cross selling opportunities – on a macro and micro level. If a customer typically buys hubcaps and tyres together, for example, the system may recommend offering them as a package deal. If there’s a wider, seasonal trend for a certain kind of vehicle or accessory, the system will let you know how to capitalise on it.

Whether they’re attempting to begin a relationship, preserve it, or take it to the “next level”,the inside salesperson uses technology wherever they can. It’s far less awkward than the in-person hard sell – and far more effective.

We’ve all been there: someone walks up to you, shakes your hand, asks how you’re doing, how the kids are, whether or not you’re all caught up with your favourite TV shows…and you draw a total blank. You can’t connect their face to a name. All you can say is “Hello…you.”

For the average person, it’s a bit awkward. For the salesperson, it can be lethal. The face-to-face approach requires you to mentally juggle faces, names, preferences, habits, and inside jokes. You have to know milestones and data points: when a customer likes to buy; when they don’t like to be bothered; how many kids they have and how old they are. Building customer loyalty quite literally depends on it – especially for a small dealership, where larger, predatory competitors tend to siphon most new business.

The inside salesperson uses technology to sustain long-term relationships. A good CRM will be able to provide quick, convenient access to vital information about existing and potential customers: behaviours, preferences, and more. If customer X buys tyres for their car every winter, you’ll have the opportunity to offer them better rates and add-ons, thereby giving them an incentive to keep buying from you. If Customer Y doesn’t respond to texts, but enthusiastically buys brake fluid and engine oil after mid – afternoon phone calls, you’ll be able to act on this information.

The field methodology survives – albeit in diminished form – because the sales profession is historically technophobic and a little self-romanticising. Deals have always been secured with a drink and a handshake. Why mess with a winning formula?

It’s true that the human touch is still important. Inside sales isn’t going to change that. Modern consumers, however, are a little different, and they expect a little more. They’re technologically equipped, they do independent research, and they see no need to meet you in person if they don’t have to. They’re suspicious of rehearsed, artificial sales pitches: they appreciate a little care and personalisation. Inside sales, when augmented by the right technology, is one of the most reliable ways to provide it.

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Neil Pattemore The giant factors are beginning to specialise – are there any business lessons from this?

Neil Pattemore

Business analyst at XEN Consultancy for the aftermarket

You may have noticed in last month’s magazine that there has been a spate of acquisitions in the parts distribution sector recently.

Andrew Page has acquired Solid Auto, whose reputation for sourcing hard to find parts and expertise in Japanese and Korean vehicles is well renowned and provides an obvious expansion to the range and expertise of Andrew Page’s portfolio. Page also added 21 sites from the collapsed Unipart Automotive in July 2014.

Elsewhere, The Parts Alliance has bought SAS Autoparts, who have several branches in the Leeds area as another of the parts groups expands still further.

There are several ‘levels’ in terms of the size and of the international trading profile of the various companies, including the U.S. car parts giant LKQ Corp (owners of ECP) acquiring Italy’s Rhiag Group from private equity firm Apax Partners LLP, through to Equistone Partners Europe SAS (a private investment company) acquiring control of French car parts maker Mecaplast Group, all the way up to the German giant ZF acquiring the international TRW Automotive Holdings Corporation. So why this rash of recent take –overs? What’s the big attraction and what’s in it for the smaller parts distributors?

Perhaps the obvious answer is the economies of scale which occur not only for the enlarged organisation being able to benefit from the synergies of reduced internal costs, but also to their suppliers who can benefit from reduced customer numbers whilst maintaining, or even increasing their supply volumes. All this should lead to the enlarged organisation benefiting from increased profits, increased competitiveness or lower prices to their customers.

It can also create brand differentiations, as is the case with the acquisition of Solid Auto. Being able to expand the range of products available, especially when there is a niche or high level of
knowledge and expertise involved, can create added value to the wider product range on offer. This can in turn help protect a product or service from the competition and encourage loyalty.

As companies grow in size, they can become more difficult to challenge as they acquire even greater abilities to fight their competitors on a variety of issues, such as price or choice of products. However, conversely, big is not always best and smaller, more ‘nimble’ businesses can often provide an excellent local service tailored to the needs of their specific customers.

Equally, with the increased buying and distribution volumes, larger organisations can defend their market share more aggressively against not only existing competitors, but also as a barrier to new entrants to the market. This becomes especially important in the international arena where global competitors serving a global market are using acquisition and consolidation to gain a competitive advantage.

As distributors get larger, they can also start to exert increased pressure on suppliers to achieve better control of distribution channels to achieve some form of ‘exclusivity’ of product or ‘preferred supplier’ status – either way gaining an advantage over their competitors.

However, as companies consolidate and get ever larger, there comes a point where the legislator or regulator becomes interested to ensure that a monopoly situation is not created. In the parts
distribution sector, this may be a difficult issue to address, as there are both high-level supplier agreement elements, as well as the highly fragmented local issue of competition at the point of delivery to a workshop.

This is where the real day-to-day competition exists, as workshops are interested in the key elements of parts distribution – the right part at the right price at the right time. Local distributors certainly understand their local market requirements and can deliver in every sense of the word, but unless they belong to a larger buying group, they may struggle to compete on price. Perhaps this is where the key issue comes to light – not just having the right stock on the shelf, but being able to buy this stock at the right price.

This leads into another developing part of the sector – on-line selling of replacement parts. This appears to be an attractive proposal to some parts suppliers, but has the fundamental risk of alienating their own trade customer base, whilst creating the problem of consumers buying products at lower prices, but still needing a workshop to fit them – creating conflicts of interest and potential liability issues for both the parts supplier and workshop. Not exactly a win- win situation.

That isn’t to say that smaller businesses should not have a consumer-facing an internet presence, but remember that the ‘net these days means far more than just having an erratically updated web page.
Instead, forming an all- encompassing social media outlook is the way to do it – just remember that it takes resource to keep it going.

So at the higher level, it makes sense to look at acquisitions or mergers and the advantages this will bring, but at the level of supporting the local workshop, small may well remain a distinct advantage for some time to come – discuss!

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