Following the recent legislative changes, Bob Lightfoot, TRW Automotive Aftermarket’s marketing and purchasing director, gives his opinion on Block Exemption (BE) – and what it really means for the independent aftermarket (IAM).
“BE provides a real opportunity for the IAM, but distributors and installers will have to work together to find solutions to the demands that technological developments will bring,” said Bob.
Block exemption – the facts
Safeguards for the IAM on matters of servicing and repair during the vehicle’s warranty period and access to technical information, parts, equipment and training were confirmed by the European Commission on May 27, 2010. The rules will be valid until 31 May 2023.
"I strongly believe the new framework will bring tangible benefits for consumers by bringing down the cost of repairs and maintenance and will also reduce the cost of distribution by abolishing overly restrictive rules, " EU Competition Commissioner Joaquin Almunia said at the press conference.
The intention is to increase competition by improving access to the technical information needed for repairs and by making it easier to use alternative spare parts.
Consumer Choice and Market Opportunity
“The motorist will have the choice of using dealer networks or independents, thus increasing competition and offering the IAM a real opportunity to raise market share,” Bob added.
Over the last decade the IAM has, in theory, had the competitive advantage, in part due to lower labour costs than in the Original Equipment Spares (OES) market. Although research suggests the IAM has the advantage when it comes to sustaining good customer relationships, it currently has a serious disadvantage in terms of advanced technical know-how and access to adequate technical data.
However, we fully expect OEM dealer networks to see a real opportunity to participate more directly in the aftermarket and perhaps to introduce programmes that increase the loyalty of their customers beyond the vehicles warranty period – as shown by the recent GM/Vauxhall warranty initiatives.
The new rules are a big step towards a free market, but this will not be sufficient to guarantee success to the IAM players. The future is driven by technology, in which the IAM has to invest.
Distributors have to ensure installers have access to training and technical data. They will have to integrate their supply chain model into that of the component providers and work in partnership in areas like forecasting and inventory management.
Another critical point is quality. The risk of providing low quality parts is a dangerous game that might serve to undermine the entire independent sector.
Bob continued: “Product piracy and counterfeiting are of great concern to TRW. Legislation now dictates that responsibility lies with every link in the chain, so having absolute assurance of the origin of a part is more important than ever. Estimates suggest that product piracy costs the automotive industry 5-10 billion Euros each year and we see it as our duty to address the issue.”
In 2009, in line with CLEPA, TRW and others introduced a two-dimensional (2D) matrix code on product box labels as a deterrent to counterfeiters. By the end of next year 95 per cent of TRW’s product boxes will carry these labels.
“The perfect control of the supply chain, the ability to face the technological evolution together with a total respect of quality and security of parts - will give the IAM a real chance to increase its presence in the repair and maintenance market,” Bob concluded.