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Apart from the gradual effects on the size of the market of fewer moving parts (see View 5), the Parts distribution structure is changing in favour of independent distributors. ECP, for example, has become a major player and other independents are becoming stronger – Andrew Page, and the franchised group, Lookers, through their independently run FPS, are two notable examples.

These changes will have an impact on vehicle manufacturer revenues. Traditionally, their Parts profits have made a massive contribution to overall company profit – or, in some cases, softened the size of the losses. VW seem to have faced up to the challenges with their TPS programme in the UK but many VMs must be wondering how they will maintain the profit contribution from Parts. Add to this the “freedoms” for franchised dealers allowed under Block Exemption plus a likely growth in recycled/remanufactured parts and the outlook must be worrying for VMs.

As a reminder, please send your comments to views@aftermarketsolutions.co.uk putting Views as your heading.

 

Posted 28 November 2013