Aftermarket February 2023

FEBRUARY 2023 AFTERMARKET 55 Below: Quentin Le Hetet Rounding up on what was an excellent presentation, Matt added: “There is a huge opportunity. We have been doing this for five years, and there are huge numbers of vehicles out there. The car we make the most money from is the Tesla Model S. It is a hugely heavy car and they wear out their steering and suspension like it is going out of fashion.” Big picture On the run-up to lunch, the first keynote speaker was former SAS soldier Robin Horsfall, who spoke inspiringly about leadership and overcoming adversity. There was more talk of explosions and abseiling than you normally get at an automotive sector conference too. Stirring stuff. Then, immediately following lunch, the second keynote speaker took to the stage; Economist and business consultant Vicky Pryce. Her presentation looked at the global economic picture, taking in the impact of the pandemic on industrial confidence in developed economics, as well as the war in Ukraine. “There was a misallocation of the global economy due to the pandemic, and supply chains were disrupted. It also happened to labour. In the UK we also had Brexit, which makes things worse. Around the beginning of the war in Ukraine, that was concern about high prices, and forecasts for trade and growth were being re- adjusted downwards. While inflation was rising helped by huge monetary and fiscal support, the war greatly altered the picture.” Speaking of the big picture, immediately following Vicky Pryce was GiPA’s Quentin Le Hetet, who was looking at future prosperity, asking what the data tells us. Drilling into the details, he observed: “In terms of new car sales, we are far behind the level of 2019. The January-October 2022 new car sales levels are still one third behind where they were at the same point in 2019. This is the third year in a row this has happened, which means there are 2.1 million cars that have not been sold that would have been sold. This means the car parc is ageing. The UK has been the country with the youngest car parc. In 2019 the average was 7.9 years old, in 2024 it is predicted to be 9.7 years old. It shows you how fast the lack of new car sales is having an impact on the market. It means that 85% if the car parc will be over three years old. Back in 2017, the year after the best ever, the 0-4 years old car parc was 29%. Now it is 14%. Older cars are more likely to go to an independent garage which is more positive. Also, 3-years plus makes up 85% of the parc. If you look at the ageing of the car parc, it also means the safety of the roads might decrease. In 2021, the MOT failure rate was 32.4%. In 2024 it will be 34.3%. If we thnk about the potential 4-1-1 consultation, if you do not have a MOT to tell you change your tyres, you won’t. That 3-4-year period is very important.” Quentin added: “The ageing car parc is a great opportunity for the independent aftermarket. Mileage has nearly recovered to 2019 levels. The body repair market is very linked to this. The talent shortage is quite a key challenge we need to address, and the parts shortage is an issue, and then there is electrification. We did a survey in October, and 51% of workshops told us that staff is their main challenge. 56% said if they put a job ad out, they would not get many applications. It has been difficult in the automotive industry for years, but it is in other industries too. How can you change this trend? It is a mid-to-long term goal for business. “On parts supply, for Q1 2021, over 60% of dealers and over 50% of independents said they had trouble with parts supply. In Q2 2022 it was 59% dealer and 65% garages. This is an opportunity for parts suppliers to create new business connections. On electrification, we interviewed BEV drivers and plug-in drivers, and asked if they changed their workshop. 43% used the same workshop, and 57% changed workshop. Those that changed because they wanted an EV- specialised workshop. Previous garages did not have the tools, or did not have the technicians. People are creatures of habit, so changing garage at that level shows there is a real opportunity. Quentin rounded up with a worrying observation: “The average age of the UK garage owner is 67 years old. Looking ahead, is there any plan for anyone to succeed them?” Last on for the day was Julia Muir, founder at the Automotive 30% club, CEO Gaia Innovation and Author of the book Change The Game. She discussed the setting up of the 30% Club, who belongs to it and why it is important. The goal is to have 30% of key leadership roles filled by a diverse group of women by 2030. “It is not a quota, it is a KPI. It drives the long term thinking to identify the barriers. This is not positive discrimination. It is about having the right culture and practices to create high performing teams.” Pride With that, the conference was over. Later that evening, the IAAF Annual Dinner took place, which included the Pride of the AFTERmarket awards, with gongs for the winners coming from the hands of IAAF President Richard Welland. The winners were as follows: Distributor of the Year, Car: Autosupplies Group Supplier of the Year, Car: First Line Distributor of the Year, CV: HGV Direct Supplier of the Year, CV: CV Logix Service Member of the Year: WhoCanFixMyCar Outstanding Individual Achievement: TMD Friction Technical Training Team Mark Field added: “This truly was a celebration of the aftermarket and I’d like to thank everyone for their support of the Federation. The entire event gave IAAF a chance to really highlight its vision for the future and I’m encouraged by how well it was received, empowering us to go further as we support members in 2023.” It is time for the aftermarket to come out of the shadows ”