AM Online

Cost of materials blamed for rise in parallel imports

Parallel imports in the refinish sector are becoming as big a problem to paint manufacturers as they are to carmakers. Many paint companies remain tight-lipped about just how much these imports affect their business, but one or two company insiders are beginning to raise the alarm that the problem is growing – and dramatically.

Akzo Nobel, DuPont and Standox declined to comment on the subject and PPG's Jacqui Casey, although admitting that imports have some affect, said it was difficult to expand further at this time.

R-M managing director Paul Buckingham said there was “no doubt” that importers were affecting the refinish market, though he dismissed claims of 50% reductions on UK prices as “not altogether accurate”.

He added: “In reality, the price the end user pays is similar to that in Europe.

“The premium covers the distributor margins and added value they provide in the form of, for example, delivery, VOC management, accounts, feasibility studies, legal advice and health and safety.

“Many bodyshops need this level of support,” he said. “It has a value and this has to be paid for.” The increase in more overt import operations, such as Andover-based Bodyshop Warehouse, which is linked to the Association of Body Repairers, coupled with ever-tighter bodyshop margins has led to a number of franchised outlets turning to the grey market for paint supplies.

One paint company source blamed the problem on larger, national distribution chains rather than the smaller independents.

He said: “I know of one distributor who sold £300,000 worth of imported material in just three months. Part of the problem is that the paint market is high tech but it is being serviced by a low-tech distribution network. Today's bodyshop doesn't need four deliveries a day: it would rather have a better profit margin on the product.”

Mike Adams, Bodyshop Warehouse general manager, is resolute that his operation is filling a demand rather than competing with the manufacturers.

“This is not our problem. The bodyshop market is being hammered in the same way the car buyer was in this country. We are just offering an alternative.”

The Bodyshop Warehouse sources most of its material from Belgium and claims to sell to UK repairers at around 54% cheaper than the paint manufacturers.

“They always talk about the level of service in this country being higher than anywhere else but, apart from the on-tap deliveries, the service is exactly the same in Europe,” said Mr Adams. “We aim at those bodyshops who have the professional ability to be able to predict and pre-order their supplies.”

Mr Adams said 56 bodyshops were at present ordering from the company but predicted that “at least another 200” would join in the near future.

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest


Login  /  Register

Comments

No comments have been made yet.