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The Independent Automotive Aftermarket Federation

Aftermarket gains a valuable insight into the effects of the pandemic

Date: Friday 24 July 2020

The latest Industry Briefing Bitesize session was another success for the Independent Automotive Aftermarket Federation (IAAF), as members logged in to learn more about the effects of the coronavirus on the industry, as well as the potential opportunities ahead.

Hosted by Mike Smallbone, head of membership development at IAAF, the Zoom session provided members with an update on IAAF activity, as well as an interesting insight into the consequences of Covid-19, with Quentin Le Hetet from GiPA in attendance as a guest speaker to discuss the topic further.

Le Hetet explored both the short-term and long-term effects that the industry is set to face.

Immediate consequences for businesses included organisational changes such as adopting furlough schemes, social distancing measures and cashflow management.

For garages, changes in organisation are to be expected such as increasing services to improve the customer experience, including pick-up, mobile and drop-off services, as well as public changes, with more people embracing the private car as they actively avoid public transport.

Meanwhile, Le Hetet set out four axes of analysis for more long-term changes, firstly urging the aftermarket to prepare for an inevitable spike in MOTs, as well as the downturn that looks likely next April and May.

From January to June 2020, passenger new car registrations decreased 42 per cent in comparison to the same period last year, which is good news, in the short term, for the aftermarket, as the growth of the aging car parc will lead to a greater need for servicing and vehicle maintenance. However, Le Hetet also warned that vehicle manufacturers may seize the opportunity to service these older vehicles and therefore urged the aftermarket to act fast.

The industry will also need to prepare for a change in car usage as more people are continuing to work from home and attending limited social outings, as well as ensuring the supply chain is fully prepared to cope with the rise in electric vehicles, as the number of new registrations increased by 22 per cent in 2020 (January – June).

Hannah Lyon-Wall, director at Financial & Credit Insurance Services Limited, also gave an economic update on the effects of the Coronavirus, providing an overview of the insurers economic outlook and their responses on policy terms and credit limits.

Details of the proposed UK Government Credit Support Scheme were also shared, as Lyon-Wall explored the exclusive benefits available to IAAF members, including Single Invoice Insurance and the Trade Credit Scheme.

Smallbone wrapped up the session with an update on IAAF activity, looking at how the federation is working with FIGIEFA to tackle the threat from OEMs as they could close the vehicle from virtual updates in the name of cyber security. This would effectively lock out the aftermarket and remove freedom of choice for the motorist.

New legislation for Type Approval was also discussed, which is more good news for the aftermarket as it demonstrates IAAF’s hard work over the past three years to ensure the OBD port remains open to the aftermarket.

Smallbone then covered the dangers of the proposed scrappage scheme, stating it isn’t the answer to financially support the British car market, and the IAAF’s continued activity around BER legislation, which is set to be brought up to speed for the digital world in 2023.

Smallbone said:

“Once again, it’s great to engage face to face with members from all parts of the supply chain. These sessions enable us to communicate directly with the industry, as well as allowing us to hear their views on current trends or issues affecting the industry.”

The next Industry Briefing Bitesize session will take place in September, with more details to be released in due course.