Insurance company plans to centralise parts supply to the bodyshop sector (and therefore by-pass franchised dealers) could cause problems, according to the Retail Motor Industry Federation (RMI), a body that represents franchised dealers in Britain.
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Insurer Norwich Union has set up a programme of direct parts supply to its approved repairer network. Code-named Unity, the project will see repairers asked to source parts from Lex Multipart sites in Chorley and Coleshill.
According to Bob Hood, bodyshop director for the RMI, the plan has a number of flaws: ‘Although I understand the logic of Norwich Union standardising parts supply to their approved repairers, I don’t believe that it will work as well as they hope. In my opinion the nature of the sector does not suit such a programme.’
He added: ‘Most repairers will have an established system of parts procurement that suits their business, and will not readily adopt alternative systems that may work to their detriment unless there is a perceived commercial and efficiency benefit. Although they may appear to be saving money at first, if labour rates are capped by NU that saving could vanish. They could also find themselves unable to source unusual or hard-to-find parts, and even if those parts can be found they may not be delivered quickly enough.’
Hood continued: ‘They could also find problems with other suppliers, who may not sit back and readily allow their business to be lost to central procurement. Other knock-on effects could include courtesy cars being used for longer periods, as well as more paperwork. These and many other things could cause friction for a business between customers and other businesses.’
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By GlobalDataHe concluded: ‘I can’t see how this will really benefit anyone in either the insurer or repairer camp.’
Earlier this week, research into the European car body repair market undertaken by the MFBI suggested that franchised car dealers will lose out as accident repair work is increasingly contracted direct to independent bodyshops by insurance companies. To find out more about this report, please
click here
