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Garages set up factor operations

More independent garages are starting to take advantage of Block Exemption changes to parts supply restrictions by setting up small motor factor operations in support of their main businesses.

All makes parts supplier Motaquip says the number of enquiries from garages about its new business start-up partnership programme has more than doubled since 2003. At that point, barely one in 10 enquiries came from independent garage owners.

However, some now see the opportunity to source and trade quality parts as a new revenue stream. Welford Garage at Stratford Upon Avon and N&N Autoworld are the latest to open Motaquip parts counters.

Its findings coincide with a study released by motor trade analyst Plimsoll Publishing, which highlights some of the most attractive areas of the industry for growth.

It found that in the motor parts and accessories sector nearly 20% of the 1,000 businesses it researched have grown sales by at least 10% in the past year. However, their average return on investment of 3.5% is poor compared to motor factors’ 4.8% return.

“Garages in an area know better than anyone when its existing factors are failing to deliver on their requirements. However, for some garages there could be wider automotive issues acting as a catalyst,” says Peter Cox of Motaquip.

“Changes to Block Exemption may well have caused a minority of garages to realize the benefits of supplying parts to other garages and franchised dealers. But on the other hand, increasing vehicle complexity and a fear for the independent sector in the future may have lead some garages to look at additional revenue opportunities.”

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