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COMMENT: Tyres 'n' Wheels Autocare: Tom Farmer back in the aftermarket

By Datamonitor Commentwire | 3 October 2003

As the creator of what is now Europe's largest independent aftermarket retailer, it comes as no surprise that Sir Tom Farmer is helping to establish a new firm to rival the company he once owned. But at a time of consolidation and falling outlet numbers, the new company may struggle to find space in the market.

Sir Tom Farmer, the founder of fast fit chain Kwik Fit, has re-entered the aftermarket with his involvement in a new tyre and wheel operator. The new firm, called Tyres 'n' Wheels Autocare, has already opened three branches in Edinburgh, Scotland and nearby Bathgate, and another two outlets are planned for the area.

Sir Tom founded Kwik Fit in 1971 and it is now the largest independent aftermarket retailer in Europe. It has expanded its product offering to include financial services, such as car insurance, as well as moving into Belgium, France and Poland. He sold the company to Ford for £1.2 billion four years ago and Ford has since sold Kwik Fit on to venture capital firm CVC for a significant loss.

Sir Tom is to give the new company financial backing and he will be playing an active role in its operations, although no official announcement has been made to this effect. The news came on the day that the EU's block exemption regulations came into effect, which will have an impact on the independent sector of the aftermarket in which Tyres 'n' Wheels Autocare will operate.

The new laws should open up the sector to create opportunities for the independent firms to win business from vehicle manufacturer franchised dealers, which until now have enjoyed a virtual monopoly over the repair and maintenance of new cars.

Despite this change, there is still a high level of competition in the market with several national chains competing alongside Kwik Fit, the market leader. The products that provide the majority of these firm's revenues are also under increasing price pressure, and are being developed to last ever-longer, reducing the need for replacement, thereby reducing sales volumes. With this in mind, building another European force is likely to be a bigger task than Sir Tom's previous ventures.

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