Numbers alone, therefore, should give the carmakers’ networks the upper hand.
However, dealers have a disadvantage: they’re used to wholesaling the original parts that are associated with the franchise they hold, and generally don’t have the flexibility, delivery capability or wide cover of marque stock that independent garages demand.
Some of the groups are chipping away at that disadvantage by consolidating vehicle assembler parts from the different franchises they hold. It’s a growing trend started by the larger players such as Lookers and now being taken up enthusiastically by some of the medium networks.
Marshall’s Peterborough operation, for instance, has just opened a multi-franchise parts department in the city, moving staff and stock from all its outlets into one centre in the Cambridgeshire city.
Factors have the edge
This trend, however, is being matched by the strengthening of supplier/distributors such as the UK Parts Alliance (UKPA), GAU UK and Ireland - the organization created in August when the Factoring Services Group (FSG) completed its transition from a trade association to a trading group – and United Aftermarket Network (UAN).
Former FSG director Andrew Dickinson, now a director of UAN, the fastest growing buying group in the UK aftermarket, believes factors will always have the edge. And as the fine print of block exemption regulation change becomes clearer, their position will strengthen.
Getting the message across
“The factor can genuinely supply all the garage’s needs – few franchised dealers’ parts operations can offer an all-makes programme of the scale and scope of a factor,” says Dickinson.
“But there’s one thing holding back the factor, and that’s down to the parts manufacturers. As soon as a filter maker, for example, makes it clear on his boxes that this particular component also happens to be OE equivalent for a particular model, then the whole of the car parc opens, not just the out-of-warranty three years plus.
“I think the parts makers are still a bit scared about how their OE contracts might be affected. But the message will eventually get through that, if the car’s less than three years old, you don’t have to source that part from the car manufacturer’s dealer network.”
He adds that the role of the motor factor in today’s aftermarket is more important than ever before. “With parts proliferation and the increasing requirement on garage workshops to deliver higher standards of service to motorists, factors are relied on more and more to provide a complete service,” says Dickinson.
“In a post-BER era, this service encapsulates technical support, POS and training, to name but a few. The effects of the new BER may not have been as sudden as some of us expected, but looking at the spate of recent acquisitions and mergers, I am sure we could be looking at a very different aftermarket in 10 years’ time.”
Dickinson sees a solid place in that future aftermarket for the factor.
He has great faith in the Automotive Distribution Federation, of which UAN is a member, to clarify the full meaning of block exemption revision and get that meaning through to the automotive aftermarket in general.
The essence is that there is freedom for a franchised dealer and/or an authorized repairer to purchase up to 70% of their original spare parts and matching quality spare parts from independent market operators (factors) of their choice.
#AM_ART_SPLIT# The four freedoms
That ‘freedom’ is one of four freedoms released by BER. The other three are:
The first ‘freedom’ is especially liberating for motor factors. It means that they can supply parts of appropriate quality to dealers and authorized repairers without the vehicle manufacturers/assemblers using contracts or other means to prevent them.
The definition of parts
The end of the tied parts arrangements under BER uses as its driving force a new definition of original spare parts and matching quality parts that is based on the quality of the component.
This definition can be used where replacement parts are of the same quality as the component used for the assembly of a car. The intention is to prevent the use of sub-standard parts in the independent aftermarket.
The wording might seem to be there to protect the qualities and standards of the car manufacturers – to ensure that any vehicle worked on by anyone other than a franchised dealer’s service department gets the parts it deserves.
There are still plenty of those rogue parts out there, stuffed into white, unmarked boxes and flogged on the cheap to the now tiny proportion of cowboy garages who put price far above the professional priorities of matching quality and consumer safety.
#AM_ART_SPLIT# Quality issues
All the usual OE suppliers, and their aftermarket divisions, will be supplying compliant material. Most of it will be equal to or exceeding the requirements, even though EC Regulation 90, for instance, allows the product to be 15% below the original equipment standard. And in bureaucratic craziness typical of Brussels, it also outlaws the supply of material that is 16+% better than the original equipment.
So, the garage proprietor can be pretty much confident that when he buys a box of Mahle filters, a Monroe shock absorber or a clutch from LuK from his local factor, the part will have been appropriately tested and certificated (even though some of these manufacturers may remain reluctant to state on their boxes whether these parts are actually OE).
Looking for a needle in a haystack
One of the ADF’s many crusades is the rooting out any iffy components and bringing to the attention of local Trading Standards Officers any examples of suspect goods. But the TSO is not the most effective trade policeman. ADF chief executive Brian Spratt says very few standards officers have real knowledge of the regulations.
“Given the wide scope of TSOs’ responsibilities, it really is a needle in a haystack for them to find someone stocking, selling or using suspect braking products,” he says. “The only way TSOs are likely to take action is if someone whistle-blows.”
Spratt reckons not all car manufacturers play by the rules. The carmakers need to sell parts as well as cars in order to maintain the viability of their dealer networks and for those who no longer see the independent as the enemy, trade parts sales provide the key to opening non-franchised doors. In one of its recent surveys, Trend Tracker reported that 77% of independent garages said they were members of one or more trade clubs.
But in a move that, if substantiated, may seem potentially suicidal as part of a long term business strategy, at least one carmaker has been accused by the ADF of slipping ‘white box’ quality parts to independent customers. The problem is getting hold of evidence that would convince a busy TSO that action is warranted.
“We did think we had some examples of suspect brake pads supplied through a VM trade club but, by the time we’d had them tested, the manufacturer had got wind of what we were up to and withdrew the suspect ones and replaced them with compliant ones.”
#AM_ART_SPLIT# Parts definitions
Original spare parts*
Matching quality parts
Catch 22 parts
*Source: Automotive Distribution Federation