The Garage 331

Industry interview
Today The Garage talks to...
Andy Hamilton
CEO, LKQ Euro Car Parts
It’s been a testing time for businesses over the last 18 months; how
has LKQ Euro Car Parts managed?
The coronavirus pandemic and Brexit would each be a lot to face
on their own, and we’ve been dealing with them at the same time.
I think our business has demonstrated remarkable resilience in the
face of these challenges.
During the first national lockdown our branches and drivers had
to quickly adapt to new ways of working to safely support our key
workers, and roadside recovery and emergency services customers.
It was a massive challenge and I’m incredibly proud of the tenacity
and passion of our people, because that’s what kept us moving
throughout.
Coming into 2021, we faced the supply-side shocks of Brexit, a
global capacity crunch on shipping containers and stress on supply
chains from materials and component shortages. The latter issues
persist to this day. We’re thankful for having always invested in our
truly world class logistics infrastructure, which is helping us to lean
into these challenges.
Now the country is getting back to normal, have you found demand
changing?
Overall demand levels have been aligned to lockdown restrictions
throughout the pandemic, so now we are close to ‘normal’ trading
volumes, albeit with a different curve. The normal seasonal MOT
demand cycle has been shifted off its axis with a huge spike coming
this autumn, followed by a deep drop soon after.
We have noticed some changes to normal trading periods and are
waiting to see if they stick over the coming months.
For some customers, using our online channels for ordering is a
new habit that may stick. We’re keen to encourage more to do so,
especially in the aftermarket, as they digitise their businesses to
achieve greater convenience and efficiency.
Road usage has settled at about 90-95% of pre-pandemic levels,
with collisions at about 80-85%. If large parts of the economy
continue to operate with ‘hybrid’ or remote working, then this
reduction in volumes could be here to stay. The effects on
bodyshops will be more pronounced.
The CMA is in talks with the Government about the proposed new
block exemption rules; what are your concerns?
Our concern is that the CMA has been slow with the start of its
consultation, whereas the EU has already been speaking to industry
about what will replace the current Motor Vehicle Block Exemption
Regulations (MVBER) when they expire in 2023.
The CMA needs to hear from the broad cross section of
businesses working in the aftermarket about how critical MVBER is
to safeguarding their ability to trade – but also about how it needs
updating.
We fear that because there’s very little litigation taking place,
in which independent garages seek legal recourse from abuse by
the automotive giants, the CMA may believe there’s no problem to
legislate for. This is often what they look out for when evaluating
anti-competitive behaviours in markets.
But we’re not talking about a sector like telecoms where
companies with hundreds of millions of pounds compete with one
another. The independent aftermarket is made of up thousands of
small and micro businesses and here they are facing up to the might
of some of the world’s biggest businesses. It’s an impossible fight
and so they suffer in silence.
Following on from that question, what would you like to see
happen?
The major manufacturers have already been exploiting the gaps
that have opened in MVBER’s coverage, as vehicles have taken on
more new technology over the past decade. This is creating mini
monopolies of so-called ‘captive parts’. You see this already in
areas like electric vehicles and Advanced Driver Assistance Systems
(ADAS).
This needs reining back in, and any future legislation needs to be
flexible enough to accommodate emerging technologies.
But there are plenty of other examples of anti-competitive
behaviours that need reviewing as part of a wider look at the sector.
This includes things like the withholding of bulk Repair and
Maintenance Information (RMI), despite the very recent legislation
obliging manufacturers to do so.
And it means giving independent garages access to vehicles’
online service records, which are stored on their manufacturers’
private servers.
We’ve also heard of instances where drivers are wrongly told that
their warranties have been invalidated because a service wasn’t
carried out by a franchised dealer, or because it used non-branded
parts.
The CMA needs to hear about these practices, and we’d urge
anyone in the aftermarket that can cite such instances to come
forward. UKAFCAR, the British arm of AFCAR, the European-wide
Association for the Freedom of Car Repair, will help collate and
funnel this information into the consultation.
12 THE GARAGE
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