Aftermarket September 2022

I love competition. No really, I do. Competition abounds in a wide variety of aspects of everyday life. It helps to formulate innovation or is often the basis of experience, in both good and bad ways. Competition creates choices when you have money to spend or forms the basis of just about every sport, whether you are participating or watching. Competition is at its best when there is a level playing field, both metaphorically and literally. There are many more examples of competition, but from the UK aftermarket’s position, it is the very foundation of its existence. The aftermarket only exists because it offers vehicle owners and operators a choice. If they choose to use the aftermarket, which they predominately do, then it remains the vibrant, innovative and service-centric sector that it is. Evolution The aftermarket has evolved for well over more than a century, but in the 21st century the level playing field has become increasing distorted. This is due to the rapid rise in vehicle technology, particularly the vehicle’s electronically controlled systems and functions. In recognition of the corresponding reliance on the vehicle manufacturer being the sole source of the technical information needed to diagnose, service, repair or maintain the vehicle, aftermarket associations lobbied the legislator to act and create the level playing field. As I alluded to in an article earlier this year, this was done as part of the Vertical Block Exemption Regulation (V-BER) created in 2002 that exempted a variety of industry sector distribution models from the requirements of competition law that would otherwise have made these distribution models illegal. The specific needs of the automotive sector were then covered in a sub-regulation – the Motor Vehicle Block Exemption Regulation (MV-BER) that allowed main dealers to operate as a monopoly within a set geographical area. For the aftermarket, this also included the non-discrimination 14 AFTERMARKET SEPTEMBER 2022 BUSINESS www.aftermarketonline.net IT’S JUST NOT FAIR With the MV-BER due to expire, Neil considers how the legal framework governing competition in the industry may look in the coming years between workshops, so that independent operators were able to access the same repair and maintenance information (RMI), replacement parts, tools and training as the vehicle manufacturer’s main dealers. The MV-BER was updated in 2010, valid in both the EU and UK and importantly for the aftermarket, included some new hardcore restrictions concerning the access to captive parts and the ability of Tier 1 suppliers to sell their parts into the aftermarket. Also importantly, it included supplementary guidelines that help to define many detailed aspects of the original Regulation. However, the current MV-BER will expire on 31 May 2023. More recently, many in-vehicle ‘software driven’ aspects have evolved and created an increasing number of ways that the vehicle manufacturers themselves can now directly provide aftermarket services to the driver, vehicle owner or vehicle operator in direct competition to the independent aftermarket. This has led to new service centric business models, especially using the remote wireless access to the vehicle when it is being driven. Monitoring of the vehicle’s functions, as well as how the driver is using the vehicle, using embedded diagnostics and predictive analysis of the vehicle’s data, as well as bespoke service and maintenance offers directly to the driver via the in-dash display are now where it is happening. The basis of competing business models now starts in the car when it is being driven. By the time it gets to a workshop, half the work has been done (the identification of the problem, what work is required, and the parts needed have been identified) so that workshop costs can be reduced by up to 50%. As only the vehicle manufacturers have remote access to the vehicle, their own embedded applications, and the ability to bi-directionally communicate with the driver, the aftermarket is at a severe disadvantage. Principles So, where is the level playing field and non-discrimination Neil Pattemore