//


Link to atfPro

All the latest news for auto recyclers

Welcome to ATF professional - the site specifically aimed at Authorised Treatment Facilities and those involved with motor vehicle dismantling, vehicle salvage and other operations associated with motor vehicle depollution and recycling. Sign up for our, free monthly newsletter.
Visit from the Environment Agency? Need to apply for an Environmental Permit? Call Paul Downing Associates now for an informal chat - 07790 147084 or click here.

Dwindling DIY market affects profits

Reducing DIY market
A reducing number of DIYers means we need to look at other opportunities for growth.
Many of us are more than aware that sales to the DIY motorist aren’t what they used to be. Interestingly an article on seeking alpha, “More Evidence of a Slowdown In DIY Auto Repairs” shows that US auto recyclers are seeing the same problems.



The article, which you can read here, focuses on American auto recycler, AutoZone whose figures have failed to meet expectations. The reason for this are put down to increasing sales of new cars in the States as they come out of recession coupled to the complexity of modern vehicles.

The problems are the same in the UK. The UK car market has shown 31 months of consecutive growth, with this September being the biggest in a decade. We are definitely showing signs of a reduction in used parts sales from motorists replacing their vehicles rather than repairing them. As for complexity, many DIYers have given up the challenge. In some ways eBay has compensated for this in the short term but it has also served to force prices down which many report is now having a negative effect.

The article about AutoZone in the States makes a very interesting point. Although DIY sales have dwindled, commercial sales have increased and when Autozone’s figures are compared to US companies that have a larger share of commercial sales, it becomes clear that this is where the growth is. AutoZone’s conclusion is to put more emphasis on the trade sale market.

This is where the UK market significantly differs. We don’t have that established trade market to sell into. The market is out there and available to us, You only have to read about FAB Recycling’s success in trade markets to understand that growth in both turnover and profits are to be had but, we have to create that market for ourselves if we want to build this area, and build it we must if we want a long term future. Take a read of this month’s article concerning BMW’s developments in carbon fibre; it doesn’t look like we are going to be making a fortune out of the scrap in the future.
So how can we do it?
We have said it many times before, standards, standards, standards! No one will buy with confidence without a recognised standard - how can you? We recently covered the ARA body panel standards and we have a follow up article all but written which covers their mechanical parts standards. But it’s no use us writing about them - you have to work to them. MVDA need to adopt these standards and modify them where necessary to suit the UK market. Maybe then, they can get an agreement with bodies such as the ABP Club who represent body builders so both sides of the equation know what is required and expected from green parts. Maybe they could have a gold standard for members complying so bodyshops can have confidence in both the company and the part that is being supplied.

Then we need technology - technology that talks and links. We need bodyshops that can order a green part as easily as an OEM or pattern part. This should be possible if the commitment is there. After all, something like 97% of bodyshops use Audatex and this is key to linking into the green parts market. If this package would allow for green parts to be ordered in a similar way as it allows for OEM and pattern parts, then this would offer no hurdle to the body shop.

What we need next is a pool of parts large enough to offer an effective service to the bodyshops. This unfortunately is where things start to fall apart. We as an industry seem reluctant to pull together. We would need a structure to control it and the system would have to be open to all provided they make the grade. We would need amalgamation of parts availability from multiple software providers and top of the list we would need a uniformity of standards so everyone’s stock and services were comparable. I won’t even mention pricing at this point! The MVDA should be the most likely body to control a standard so should also be a likely contender to oversee the development of such a service. This cannot be in the control of any one business as this would only create the problems we have now.

If we do all this, and we can put aside differences and work together then the potential is vast - the crash repair parts market is £1.5 Billion a year in this country - now that’s worth having a go at! We shall look at many of the issues raised in more detail over the coming months.

November 2014

Latest stories

Who’s buying our salvage vehicles in Europe?
It seems that there are some questions surrounding the purchasing of vehicles by other European countries, in particular Cat B vehicles. One of our readers asked us the following:
Diesel and petrol car sales to be banned from 2040
In recent news and following on from France’s commitment to take polluting vehicles off the road by 2040, Britain has also followed suit by banning the sales of all new diesel and petrol cars and vans by 2040. The final plan is due by the end of July.
Palladium cost has increased, hitting a 16 year high
Automakers may have to decrease the use of palladium and seek an alternative due to higher prices of the metal
There is a use for rusty old cars!
This years’ Glastonbury featured ‘Cineramageddon’ – an interesting use of old vehicles.
The pressure’s on for tyres!
The Tyre Recovery Association (TRA) and National Tyre Distributors Association (NTDA) warn of rising costs on tyre recycling due to regulatory changes and market conditions, factors that will affect used tyre collectors and re-processors.
Volvo to go electric by 2019
Volvos plan is to launch five electric models between 2019 and 2012 and a number of hybrid models and they aim to sell one million electrified cars by 2025.
We’re not a scrap yard, we’re a vehicle dismantlers
Atf Pro met up with the guys at Skan 4x4 Ltd to take a look at their great setup.
Code of practice flawed, the opinion of the BVSF
One has to be concerned when the insurer’s new Code of Practice (CoP) that received its “soft launch” a week or so back isn’t supported by either the Motor Vehicle Dismantlers’ Association or the British Vehicle Salvage Federation, two of the main owners of the pre-existing code.