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Red tape strangles independent garages

Red tape is strangling independent garages and diverting too much attention from focusing on their business just as trading conditions become even tougher in the sector.

Jonas Zambikides, managing director of Porsche service specialist JZM Machtech and Independent Garage Association (IGA) chairman, told AM: “The legislation is geared up for large global companies and not tailored for the smaller businesses such as independent garages.

“The difficulty comes with finding the time to concentrate on your business and then squeezing in all the paperwork that needs to be done.”

Zambikides wants the Government to change policies to simplify the amount of paperwork involved with things like tax and business rates to take into account the amount of manpower at a business, rather than base it on turnover.

He said: “The paperwork for a £3 million turnover business will be the same as fora global corporation.”

His comments come as the Retail Motor Industry Federation (RMIF) launched its first Independent Service and Repair Garage Survey on the sector’s views on major issues including business trends, customer relations, and parts supply.

The burden of legislation was the single largest factor discovered by the survey, with 81.5% agreeing that red tape was getting in the way. Respondents also cited the economy, public attitude and confidence as the largest contributors to change in the sector.

RMIF director Sue Robinson said that while the independent garage sector was going through tough times, there were still positive signs from the survey that showed many businesses were still looking and preparing for the future.

She said: “The overall stability of the independent market bodes well for the future, and should give businesses confidence to invest in tooling, training and equipment to take advantage of the upswing, when it comes.”

Increased overheads, lack of investment and bad dealings with banks were among main negatives.

On the positive side some independents report that they are in control of the situation by inserting better business structures.

Changing attitudes mean that some consumers are looking for cheaper ways to service their vehicles, which is leading them to the independent sector.

The survey profile ranged from smaller businesses with less than three employees to multi-outlet groups with annual turnover in excess of £3 million. The predominant group of respondents was from the service, maintenance and the MoT sector.

The survey showed that 53.3% of IGA members have seen the average job cost rise in the last six months, but 45.6% were forecasting a decrease in profits this financial year.

The survey revealed that 62.1% are seeing a trend towards repair over preventative maintenance. and over half (57.2%) of the garages polled said they were seeing younger cars coming in for work.

The tough economic climate has not put all independent garages off investing for their future, with 49.5% intending to invest in new equipment, 42.7% want to invest in training and 31% will be getting new tooling.

The IGA will be running the follow-up survey in early 2010. For details contact the IGA via email on iga@rmif.co.uk.iga@rmif.co.uk

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