The new legislation should give repairers freedom to compete - but can they afford to?
The new 2010 Block Exemption concentrates on enabling freedom of competition within the European aftermarket.
Previous regulations have concentrated upon vehicle distribution, but merely summarised aftersales conditions which manufacturers have largely ignored.
The new legislation details that technical information, parts, tools and equipment must be reasonably made available both to fleet users and repairers – irrespective of their alternative channels of distribution.
Alternative parts distribution chains are now formally recognised.
OEM parts manufacturers can use their logos and trademarks on OE and replacement parts and distribute them directly into the aftermarket, rather than being restricted to the VM sales channel at OE prices.
The independent repairer can now choose to use genuine branded quality parts at an equitable price, rather than being forced to buy questionable copies.
Independent garages can now make more complex technical repairs, initially with Euro 5 compliant vehicles enabling ready access to fault codes - with repair information, special tools and even vehicle history data made conditionally available.
Support for Euro 4 standard vehicles will come in 2011.
Some VMs could insist upon onerous conditions such as full training certification and service standards. But wilfully obstructing reasonable access by invoking punitive conditions suggests costly legal action could ensue, likely with test cases.
But what does this mean to independent repairers?
Firstly, the time and cash investment necessary to offer depth repairs on any particular vehicle and brand could be considerable. Is this investment worthwhile, and what resultant charges will the customer be prepared to pay?
Or will it remain more cost-effective to sub-contract complex repairs to the franchised dealer?
It is inevitable that aftermarket repairers will further segment either into more fast-fit where specialist knowledge is not required, or specialise in for instance ECU reprogramming for a wide range of brands, while larger independents – maybe already brand specialists – could offer a depth range of professional repair at sensible prices.
What of the existing franchised dealer?
Currently under-utilised after-sales facilities may yield additional income almost overnight if existing investments can be supported by the addition of after-sales for another brand where local competition is inadequate.
Maybe as the number of dealer locations diminishes, satellite workshops offering after-sales for a range of brands may develop.
The big issue now is undoubtedly access to complex information, tools, training, data and genuine parts.
Some VMs may see an additional profit opportunity in becoming direct providers to independents. Other VM’s may prefer to use intermediaries set up as sub-franchised data warehouses to transact with small independents on technical support and supply of tools, equipment and training.
Whether those intermediaries will be existing dealers - or new specialist technical call centres also acting as parts and tooling co-operatives - is likely to unfold in the coming months and years. Fascinating.