But have the changes had the intended impact and created competitive opportunities? And if there are new opportunities what should you do about it in 2004? The two big aftersales changes in block exemption involved authorized repairers and 'parts of matching quality'. The new regulation effectively unbundled new car sales and aftersales, and now any qualifying workshop can become an authorized repairer for a vehicle manufacturer. In the parts market, block exemption launched the concept of parts of matching quality – aftermarket spare parts as good as original equipment.
Industry observers were split on the value of becoming an authorised repairer. Some believed there would be a flood of applications from independent garages eager to cash in on the service and repair of cars in warranty.
Others thought franchised dealers would be interested in improving the utilization of their large investments in workshops by taking on other franchises. Most pundits said parts of matching quality were of little commercial benefit except perhaps to franchised dealers interested in improving margins.
In the event, the changes to block exemption did not alter things overnight. The earth didn't move and it probably never will. Independent workshops, quite sensibly, find the investment required to become an authorised repairer too high, although some people alleged that car makers have deliberately set sky-high entry standards.
Franchised dealers have shown an interest in becoming authorized repairers and this looks like the main action. Dealers are also fairly positive about parts of matching quality.
So, there are still a lot of people sitting on the fence. But can you really afford to wait and see how block exemption pans out, or what your competitors are going to do? If you are thinking about becoming an authorised repairer, maybe you can, because block exemption is very specific about no limits on the number of authorized repairers. Perhaps, as one dealer group managing director suggested recently, you should make the vehicle manufacturers do the running. One thing is certain – franchised dealers must explore the opportunities.
Last year will probably also go down as the worst for some time for bodyshops. The market has been teetering on the edge of decline for several years and 2003's unusually dry weather was the final straw. Unless insurance labour rates rise substantially, quite soon, 2004 will see more bankrupt bodyshops.
The optimists see this as a ray of hope – less capacity might just unlock the impasse."
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