The current level of interest in the parts market has therefore come as a bit of a surprise to many in the industry. At first sight, the stimulus appears to be the new block exemption regulation, which (in theory) creates a level playing field in the competition between OE and non-OE parts.
But we think the parts market started to change some years ago when vehicle manufacturers introduced parts trade clubs.
Vauxhall Trade Club, trade parts programme AM Awards winner for 2005, was first in the field and has the most members among independent garages, followed by VW, Ford and Renault. These clubs have long moved on from the early days of monthly price-led promotions, competing head on with independent wholesalers for procurement, cataloguing, marketing and service levels.
This has sparked franchised dealers’ interest. Brooklyn Direct, this year’s factor/distributor AM Award winner, is an excellent example of how the future is shaping up.
It has re-engineered its parts operation, and the new customer-focused business with its multi-franchise centralised, integrated warehousing and distribution facility is more akin to an independent parts wholesaler than a conventional dealer parts department.
The results speak for themselves: a tenfold increase in orders processed in the space of five years. If more follow Brooklyn’s example, franchised dealers could threaten the future of independent parts wholesalers.