The pandemic and consequences of Brexit have significantly affected the entire automotive aftermarket but savvy workshops can use record-low new vehicle registrations and their ability to adapt more quickly to their advantage when dealers focus their attention on aftermarket servicing and repairs.
The Independent Automotive Aftermarket Federation (IAAF) urged the entire industry to gear up for change in its virtual conference at the end of 2021, as it presented the opportunities and challenges the trade is set to face and a panel of experts provided advice on how parts suppliers, service providers and workshops can futureproof businesses in the years to come.
Here, we look at how Quentin Le Hetet from market analysts GIPA set the future landscape for the aftermarket after analysing key data and trends that will affect the industry in the short and longer term.
Decimated new car registrations – play to your strengths… He stressed that first and foremost, the car sales dynamic is having a significant impact: “The car parc is not growing as it should be and is not being renewed as it should be”. The impact of (poor) new car sales is an aging car parc, which gives the independent aftermarket an advantage – the number of cars aged 0-3 years, which typically end up at the dealers, is shrinking – a car’s average age has increased to over 14 years in the UK, presenting an opportunity for independent workshops to take on more technical and profitable jobs as major parts deteriorate and require replacement. Quentin stated in the UK, with a strong emphasis on the word ‘currently’, that many franchise dealers are not geared, and do not have the right strategy in place, to attract work on cars within the 5-9 years old segment. It follows that vehicle manufacturers suffering from poor vehicles sales will want to claw some of this aftersales work back.
VMs gang together – promote your independent status… One major shift in recent years to extend the VMs influence and consumer reach is the consolidation of vehicle manufacturers. The PSA and FCA group merged in 2021 forming the Stellantis Group – the world’s 4th largest car manufacturer incorporating 18 vehicle brands, representing over 20% of the UK car parc. “Consolidated together, their power is much bigger. This is very important to have in mind because they will use this to invest in the independent aftermarket in the UK. The Volkswagen Group’s aftermarket strategy involves increasing parts sales to the independent workshop, using its TPS factor network to supply genuine parts via its 100+ branches.
The Stellantis group have Distrigo providing genuine parts, Tier 1 OE manufacturers and aftermarket all-makes Euro repar brand. “On top of this, they are developing a garage network Euro Repar Service, aiming to service all makes using their Distrigo distribution.”
The rise of electric vehicles & subscription models – prepare for fleet work… “The disruption of the market is coming from plug-in hybrid and battery electric vehicles, which are really going to make a huge difference to the workshop”. Quentin uses the term disruption because of the change in ratio between labour and parts turnover when repairing Battery Electric Vehicles compared to ICE vehicles, around 65% labour, 35% parts with BEVs. As parts revenue decreases, VMs are adapting their business models. Quentin states that it is still too early to understand the disruption entirely but VMs, such as Volvo, are testing the water with vehicle subscription models, which obviously tie motorists into the dealer network. “I think more and more, independent garages need to think more about fleets, consolidation of the car parc owned by companies… Fleet managers want to stretch their assets to the minimum running cost… Garages will need to adapt and have a commercial discussion directly with them because there’s going to be much more of this in the future.”
The importance of training and preparing to take on EV repairs and maintenance was stressed. “We are still relatively far from the mass adoption of Electric Vehicles so there is still time to get ready, but I think it’s good not to leave it until the last minute. We are already seeing more and more independent workshops seeing electric vehicles… it is very important to be aware of all these trends, to have a plan to be ready for all these vehicles.”
IAAF Campaigns for fair access to in-vehicle data
The Independent Automotive Aftermarket Federation, IAAF, has added its voice to a large coalition representing the automotive aftermarket in Europe, including FIGIEFA, which is calling on the European Union to take on board a proposal for a Secure On-board Telematics Platform (S-OTP) – which will allow access for independent service providers.
Following the UK’s withdrawal of the EU, the IAAF is working alongside other federations in bringing the campaign to the attention of the UK government.
The intention of the S-OTP is to ensure that motorists can still choose their service providers, many of them SMEs, to benefit from innovative, competitive and affordable services and products. To do so, service providers have to be able to compete with all stakeholders, some of whom might be tempted to act as “gatekeepers” through proprietary access methods to in-vehicle data.
FIGIEFA said it is the only solution guaranteeing true consumer choice, effective competition and independent entrepreneurship in a secure and technology-neutral manner.
In the detailed document, publishers of technical information, body repairers, dealers and workshops, garage equipment suppliers, tyre manufacturers, recovery companies, parts distributors and leasing companies, as well as consumers, provide technical and commercial arguments supporting their recommendation.
With the advent of the connected car, competition now starts in the vehicle where the ability to safely and securely access car data, functions and resources determines the quality of the service.
Wendy Williamson, IAAF Chief Executive, said: “For many years now, it has been proven that a standardised interoperable telematics platform can be safe, robust and secure. IAAF
will continue to campaign and lobby the UK government, highlighting that the current in-vehicle access platforms – controlled and operated by the vehicle manufacturers – restricts businesses from embracing digital opportunities, and jeopardises consumer choice, innovation and a growing economy.”
IAAF Appoints New Chief Executive
The Independent Automotive Aftermarket Federation has appointed Mark Field as its new Chief Executive, succeeding Wendy Williamson who is retiring later this year.
Field has worked with the IAAF through the Federation’s PR representative, Impression Communications, for the past nine years and will assume chief executive responsibilities from 1 July 2021. He also has experience working within automotive media, PR and automotive trading groups.
Field said: “I am honoured to be heading up the IAAF in what is both an exciting and challenging time for the automotive aftermarket. We will look to continue the modernisation of IAAF during a period of immense change, bringing new opportunities, ideas and value to the growing membership.”
Schaeffler wins IAAF Outstanding Supplier award for Back-On-Track initiative
The Independent Automotive Aftermarket Federation (IAAF) has awarded Schaeffler with its 2020 Outstanding Supplier award for its efforts to stimulate the aftermarket at the height of the COVID-19 pandemic.
During an extraordinary year, the IAAF decided to present the 2020 award to Schaeffler for its Back-On-Track initiative, which included the delivery of 2,000 packs of PPE and POS materials designed to help garage owners make their workshops safe for both staff and customers. Schaeffler also created an e-learning module to help garages become more COVID aware, with hundreds of technicians completing the course and downloading the certificate.
Thanking the IAAF for the award, Nigel said: “I would like to also thank our fantastic warehouse staff, as well as the Schaeffler sales and marketing teams for physically packing all 2,000 boxes, as well as hand delivering many of them to garages all over country”.
“I also have to thank our fellow OESAA members, who made it possible to provide a further 3,000 Back-On-Track supplementary packs to extremely grateful garage owners across the UK and Ireland.”
Schaeffler continues to find innovative ways of engaging with workshops, including announcing a program of online ‘Tea-Break Training’ sessions starting in January 2021, after an overwhelmingly successful trial run in November.
Automotive aftermarket to be provided with industry insight in latest webinar
Messe Frankfurt UK, organisers of Automechanika Birmingham, has confirmed the date for the next webinar in the Automotive Aftermarket Webinar Series, which will take place on Tuesday 8th December at 11am – 12pm.
This session will present the findings of an extensive industry report on the State of the UK Aftermarket from this challenging year and will address the impacts of technology, regulations, industry skills, consolidation, and COVID lockdowns for businesses operating in the UK aftermarket.
On Tuesday 8th December at 11am – 12pm, The Automotive Aftermarket Webinar will host a panel of experts from various parts of the supply chain, including Quentin Le Hetet, General Manager of GiPA UK, who will provide in-depth research findings across the board, looking at trends that could shape the future of the aftermarket.
Steve Nash, CEO of the IMI, will also be on hand to look at best practice surrounding training and apprenticeships, while Frank Harvey, Head of Member Services at IGA, will explore the challenges and opportunities affecting the industry.
Wendy Williamson, Chief Executive of the Independent Automotive Aftermarket Federation, will share information on how suppliers and distributors can futureproof their businesses by staying ahead of the curve.
“We are nearing the end of a tough year, so it is vital for the automotive industry to stay connected. By sharing challenges, best practice and learnings from 2020, we can help shape how businesses will move forward and identify new opportunities.”
Simon Albert, Managing Director of Messe Frankfurt UK, organisers of Automechanika Birmingham
The discussion is not only for business owners, but for the workforce who will be responsible for providing services and delivering sales.
If professionals can’t make the 8th December, Automechanika Birmingham is encouraging individuals to register anyway, as the live session will be recorded and shared afterwards.
IAAF explores effects of the pandemic in latest briefing
The latest Industry Briefing Bitesize Zoom session from the Independent Automotive Aftermarket Federation (IAAF), updated members on IAAF activity and guest speaker Quentin Le Hetet from GiPA explored the short-term and long-term effects of the coronavirus the industry is set to face.
Immediate consequences for garages included organisational changes such as furlough schemes, additional customer services such as vehicle collection/drop-off and mobile work, social distancing measures and cashflow management.
Le Hetet discussed possible long-term changes, firstly urging the aftermarket to prepare for an inevitable spike in MOTs, as well as possible downtime next April and May. From January to June 2020, passenger new car registrations decreased 42 per cent in comparison to the same period last year, which is good news in the short term, as the growth of the aging car parc will lead to a greater need for servicing and vehicle maintenance. However, Le Hetet warned that vehicle manufacturers may seize the opportunity to service these older vehicles and urged the aftermarket to act fast.
The industry will also need to prepare for a change in car usage as more people are continuing to work from home and attend limited social events, as well as ensuring the supply chain is fully prepared to cope with the rise in electric vehicles, as the number of new registrations increased by 22 per cent in 2020 (January – June). The IAAF’s Mike Smallbone wrapped up the session with an update on IAAF activity, looking at how the federation is working with FIGIEFA to tackle the threat from OEMs as they could close the vehicle from virtual updates in the name of cyber security. This would effectively lock out the aftermarket and remove freedom of choice for the motorist.
New legislation for Type Approval was also discussed, which is more good news for the aftermarket as it demonstrates IAAF’s hard work over the past three years to ensure the OBD port remains open to the aftermarket.
Smallbone then covered the dangers of the proposed scrappage scheme, stating it isn’t the answer to financially support the British car market, and the IAAF’s continued activity around Block Exemption Regulation, which is set to be brought up to speed for the digital world in 2023.
The next Industry Briefing Bitesize session will take place on 22nd September. To register for the event, please email firstname.lastname@example.org.
IAAF introduces virtual updates
The Independent Automotive Aftermarket Federation (IAAF) is taking its Industry Briefing Sessions online and is inviting members to attend ‘Industry Briefing Bitesize’ via Zoom.
The online sessions will provide members with vital information and updates on COVID-19 and update them on IAAF’s lobbying activity.
More information will also be available on how IAAF is building a consensus against an overall scrappage scheme, championing the aftermarket in a post-Brexit era and, working with FIGIEFA on the Block Exemption renewal.
The first Industry Briefing Bitesize will be held on Thursday 25 June at 10:00 – 11:15.
Steve Carter from Train4Auto Consultancy will explore if the pandemic has hindered or helped sales of electric and hybrid vehicles and members will then be able to take part in an active Q&A to discuss the topic further.
An open forum will then follow, allowing members to comment on key IAAF discussion points, where they will have the opportunity to gather more information on IAAF’s activity and how it is proactively supporting its members and the wider aftermarket.
Mike Smallbone, head of membership development at IAAF, said: “This is another exciting development for IAAF. Our regular Industry Briefings are often over-subscribed and so this new platform will allow members the opportunity to find out more about IAAF’s extensive activity and how it relates to their business going forward.”
The next event will take place on 23rd July with Quentin Le Hetet, general manager of GiPA UK.
Members can register their interest for both events by emailing anns@IAAF.co.uk, who will then send over more information.
“Scrappage schemes are not the answer,” says IAAF
The British car industry has struggled as a direct result of the coronavirus in recent months, and many are calling for the introduction of a scrappage scheme to look to give consumers an incentive to purchase a new vehicle.
The federation is arguing that if introduced, it will have a significantly negative effect on public mobility and the automotive aftermarket long term, especially as most of the vehicles eligible for the scheme will still be very much roadworthy.
In 2009, a scrappage scheme removed 400,000 serviceable vehicles from the aftermarket, with more than 90 percent of vehicles sold under the scheme originating from non-UK factories. In 2020, the situation remains largely the same with 88 percent of cars sold in the UK during 2019 being imported.
As the UK aftermarket also employs approximately 347,000 people as opposed to 186,000 in vehicle manufacturing, employment in the independent automotive aftermarket would be damaged by a scrappage scheme and jeopardise thousands of repair businesses. This would also be detrimental to motorists and customer choice.
With a newer vehicle parc, there is also a risk that VMs could potentially gain a monopoly on access to vehicle technical condition data, raising the question of data access.
With the forthcoming block exemption legislation renewal due in 2023, IAAF is continuing to argue that the aftermarket should have the same access rights as the franchised sector, providing the workshop is equipped with appropriate tools and equipment, thus creating a level playing field for all.
Wendy Williamson, IAAF chief executive, said: “Motorists are currently under great pressure, and they should not be penalised for keeping hold of vehicles that are in good working condition and can continue to be serviced, repaired and maintained long into the future.
“Not only is this unfair to consumers, but it is putting the aftermarket at great risk, as it will result in a direct decrease in the number of vehicles entering independent garages.”
Williamson added: “Changing the habits of consumers is difficult, and if the scrappage scheme is introduced, there is no guarantee that a motorist will opt for an electric vehicle over a petrol or diesel vehicle. Perhaps a more feasible option would be to introduce a limited scheme targeted at those living closest to clean air zones as demand for electric vehicles will be higher in these areas.
“It’s crucial that any proposals are reviewed as the economic impact of a scrappage scheme could be detrimental to the aftermarket and place an unnecessary financial burden on the consumer.”
IAAF praises sector as it fights to overhaul MOT extension
The IAAF is continuing to call for the MOT extension to be scrapped and has written to government to get the decision overturned.
In various communications with DVSA and Department for Transport, IAAF chief executive, Wendy Williamson said the decision to extend the MOT “will inevitably have a serious impact on road safety as road worthiness can alter greatly during this period. There is also the obvious concern that due to this postponement there could be thousands of vehicles on the road that are dangerous and unroadworthy.”
Williamson has also written to the NI Assembly challenging the Northern Ireland infrastructure minister’s decision to extend MOT’s there for twelve months.
The IAAF continues to highlight to government some of the incredible work done by suppliers, motor factors and garages in taking all necessary precautions to limit and, in some cases, remove completely any interaction with customers. Williamson also praised automotive aftermarket businesses for their actions in protecting the health and wellbeing of employees during this period.
The latest UK Government advice is to minimise the use of public transport. Essential journeys, such as for food shopping, family support and travel for all workers, will therefore be increasingly entirely reliant on a private car.
“Use of private vehicles, where there is no fear of direct infection from other members of the community, is increasingly the preferred option,” said Williamson. “There is more need than ever to keep cars on the road. Therefore, the MOT is an essential requirement to keep vehicles on the move.”
“The UK Automotive Aftermarket – and our workforce of over 300,000 colleagues – stands ready to provide essential support to UK citizens and businesses during this crisis. In practice, this means the urgent delivery of millions of replacement parts to businesses maintaining and repairing the UK vehicle fleet, both private and public.
Previously, the IAAF has said the Driver and Vehicle Standards Agency’s (DVSA) decision to extend MOTs for a six-month period causes “huge challenges” for the sector, arguing that the industry needs to ensure vehicles continue to be kept safe in these challenging times.
The federation argues that the industry needs to ensure vehicles are running safely in these challenging times and the extension will result in a worrying number of vehicles ‘un-roadworthy’ but in operation.
Our industry is already diligently following Government and NHS Guidelines to minimise the spread of the virus and protect our colleagues and our customers.
The Independent Automotive Aftermarket Federation (IAAF) is the UK trade body for independent companies in the UK motor trade. Members include parts suppliers, distributors, workshops and service companies. As a sector the independent automotive aftermarket is worth £21.6 billion, supporting over 300,000 jobs representing 40,000 outlets across the UK.
IAAF Conference: Gearing up for Change
The IAAF Conference took place last month and highlighted the massive technology-led transformation in the global automotive industry and how every business in the independent aftermarket can take full advantage.
The Federation highlighted how technology had dominated its work in 2019, from a Counterfeit Parts Campaign to Cyber Security, and outlined the work FIGIEFA was doing in securing fair vehicle digitalisation opportunities along with other technology-led work on Extended Vehicle1 and SERMI2:
1: Extended vehicle is a structure which enables secure access to vehicle data via an off-board facility, in accordance with clearly defined technical, data protection and competition rules.
2: The process by which independent garages, who can meet the strict requirements of the scheme, will be accredited to access all areas of manufacturer technical information, including data related to the security of the vehicle.
“Vehicles are like computers on wheels and we are seeing them becoming increasingly more connected and sophisticated,” stated IAAF chief executive Wendy Williamson. “As an industry, we need to steer the supply chain in the right direction to ensure we’re on track to tackle the challenges we face head on and ensure we are equipped with the tools and know-how to be able to continue to service and maintain the vehicles of tomorrow.”
Williamson stressed the importance of being able to compete fairly and safely in an open market, while ensuring the motorist continues to have the right to choose where they take their vehicle.
ADJUSTING TO CHALLENGES
Dean Lander from Thatcham, established by the motor insurance industry to maintain car safety standards, discussed the growth of Advanced Driver Assistance Systems (ADAS), reiterating the need for garages to have greater access to ever-changing technology in order to avoid handing over all power to vehicle manufacturers. Lander urged the industry to recognise that autonomous vehicles are already a reality and that change is inevitable.
The conference keynote speaker, Richard Noble, spoke of how he fulfilled his life-long mission to build the world’s first supersonic car and going on to break the land-speed record. In the process, Noble used his experience and network of contacts to set up the largest STEM programme in the UK, directly targeting the next generation and engaging with more than 129,000 schoolchildren.
Mike Smallbone, Head of Membership Development, summarised the body’s activities over the past year, including its ‘Your Car – Your Choice’ campaign. The pilot project in Chesterfield had been instrumental in the automotive aftermarket winning business from main dealers, as independent garages felt more confident in the greater use of OE-quality parts.
Neil Pattemore from FIGIEFA, the industry’s European federation and political representative, rounded off the event with a presentation on the immediate threats affecting the industry, such as protecting Block Exemption, the risks surrounding the extended vehicle and the importance of cyber security.
Wendy Williamson had the final say: “It’s a challenging but also exciting time to be in the aftermarket, and we will need to all work together to ensure we can not only adapt to the challenges that we face, but also maximise the enormous potential in front of us. However, if we’re to continue to thrive, the time for change is now.”