Aftermarket December/January 2023

DECEMBER/JANUARY 2023 AFTERMARKET 11 Above: Andy Hamilton, CEO, LQK Euro Car Parts Parts said: “The independent sector is facing some strong headwinds next year at a time of major economic turbulence. I think there will be four areas that will dominate the industry in 2023, split evenly between the short-term challenges garages and bodyshops face in maintaining work volumes, and the enduring macro- level issues that will shape our future. “Firstly, there will be a renewed focus on enhancing the customer experience. Independent garages and bodyshops can look to displace franchised operators if they can add a more professionalised experience to their, most likely, cheaper offering. A welcoming reception area, a clean workshop and a modern and functioning online presence can give motorists looking to make their money go further have the confidence to work with an independent operator. Aligned to this will be a more tailored offering to cater to vehicle owners that will be far more conscious about their spending. Being able to offer lower-cost alternatives to OEM brands without compromising on quality, for example, may offer a more cost-effective solution while showing an empathy for the customer’s own financial situation. It is why one of our own major areas of focus next year will be bolstering the range of options available to garages and bodyshops.” Regulatory landscape On the wider context, Andy observed: “Looking more broadly at the regulatory landscape that shapes trading conditions, we will be continuing to fight for the interests of the independent sector. We feel optimistic that our voices have been heard on Block Exemption, but the threat of an extension of the mandatory MOT period remains. Meanwhile, there is uncertainty around whether an equivalent of SERMI will be introduced in Great Britain, as it will be in Northern Ireland. While we support the principle, sufficient time would need to be allowed for the market to prepare, and to put the right approving body in place. Lastly, the sector’s training and talent gaps continue to widen. As garages and bodyshops inevitably become more focused on controlling cost, neither issue is likely to improve.” Technology is also having an impact: “Leaving aside the race to get EV-ready and the need to build a sustainable future, which may rightly or wrongly feel like a problem for another day, the arrival of ADAS- equipped and even hybrid vehicles in the aftermarket is very much upon us – an issue exacerbated by the decline in new car sales.” Andy added: “Where they can, garages and bodyshops must continue to invest in the skills, people and equipment needed. There is even an opportunity to help take market share from franchises if they can service more sophisticated vehicles. It’s why we’re expanding our own support to the sector through growing the scope of programmes like the LKQ Academy. Similarly, part of our efforts to lobby government will be around what financial support and tax-based incentives can be offered to garages to help them keep training and capex on the agenda in 2023.” Impact NTDA Chief Executive Stefan Hay said: “One could certainly be forgiven for looking to 2023 with an amount of fear. The Bank of England recently announced that the UK is facing its longest recession since records began, both the cost of living and doing business are affecting us all and current political leadership ineptness across the Western economies is very demoralising. Combine this with ongoing post-BREXIT issues, the war in Ukraine and the supply chain disruption this has caused, the threat of further conflicts in the South China Sea and North Korea and it becomes difficult, for some people, to think beyond Christmas. “The NTDA is certainly seeing the impact across its membership. Recently a number of smaller members have ceased trading. Some because after paying suppliers and other operating costs they can’t generate a profit, but more are closing their doors because they simply can’t recruit tyre technicians, mechanics, MOT testers and other skilled employees. It is safe to say, that the growing skills shortage is now the biggest crisis the trade faces.” Training will again be a key issue according to Stefan: “The fact of the matter is, successive governments have neglected vocational training for decades and as the old adage goes; ‘You reap what you sow”’ The good news is, it’s not all doom and gloom and there are a lot of businesses out there looking for a way forward. For example, the last three years have been some of the best on record for NTDA membership growth, including supplier members from the aftermarket, as businesses recognise the benefit of belonging to an There’s plenty to look forward to across the industry with a buoyant aftermarket consistently posting record high demand ”