AM Online

Halfords Autocentre begins significant expansion into service sector

 

The first of 200 new sites has just been opened by the new Halfords Autocentre – a national independent auto servicing and repair operation – as the first step in its aggressive expansion plan that could be the biggest threat to franchised dealers’ customer retention plans in recent history.

The opening of the Swindon site marks the start of the company’s plan that will see 30 new independent centres opened every year between now and 2012.

In an exclusive interview with AM, Duncan Wilkes, chief executive of Nationwide Autocentre, which was acquired by Halfords in February, said the ts are already being crossed on contracts that will secure a further five new sites for the company, which last year saw 670,000 vehicles pass through its centres.

The plan is to double that volume as quickly as possible – with much of that business coming straight out of franchise dealers’ workshops.

A further 35 potential new sites have also been identified with discussions already underway to acquire them.

“Our target is to have six new sites up and running by the end of September,” said Wilkes. “And to have a further 12 and 14 up and running by March 2011. And then broadly to add 30 a year.”

At the end of the current expansion plan, there will be in excess of 420 sites, making Halfords Autocentre by far the biggest independent provider of vehicle servicing and repairs in the country.

Its plans include acquiring sites within the M25 as well as across Scotland ensuring it true national coverage and visibility in every major urban conurbation. In fact many towns and cities will have multiple sites.

While its target market is cars out of warranty cover, the threat to franchise dealers should not be underestimated. Consumers are more educated: Block Exemption may still draw blank faces but an increasing number of car drivers are aware that they do not need to go back to a franchise dealer to retain warranty cover.

And Halfords Autocentres’ marketing campaigns will ensure they know they can go to these independent centres and “receive the same service levels as they would get at a franchised dealer but at a significantly lower price”, says Wilkes.

Those service levels are set to continue as cash-rich Halfords confirmed it is committed to continuing with the investment in equipment and training that won Nationwide Autocentre the AM Best Training Programme this year.

In addition the Nationwide offering is already well established in the fleet sector, which buys half of all new cars sold in the UK.

All the major fleet and lease companies have agreements to direct fleet vehicles to Halfords Autocentres, which retains its pre-buyout management structure and will be run as a separate company from the retail Halfords operations.

Some lease companies are very proactive – Lex Autolease, by far the largest lease company with 337,000 vehicles on its books – refers a large percentage of its cars to the independent centres. These cars would historically have gone to franchised dealers.

Cars aged three years and older, which have generally fallen off the dealers’ radar look set to never return. “Over 98% of our current retail business is on cars over three years old,” explains Wilkes. That business used to go to independent or franchise dealers. “But that market is naturally coming over to us now.”

The cross-over opportunity of being part of Halfords is also huge – incentives to get Halfords’ 12 million retail customers to use its new centres are already in development.

And its retention rates are high – some sites see 75% of customers returning, although the average is closer to 50% and Wilkes’ target is 65%.


* Go to page 20 for analysis on how franchise dealers are losing the battle to keep fleet service business in their workshops and out of the independents’.


 

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.