Since the changes to block exemption came into force in October 2003, vehicle dealers can now choose whether to carry out repairs and servicing themselves or sub-contract them to an authorised third party.
In addition, repair shops that meet manufacturer quality standards can now become authorised repairers and quote for fleet repair work. The car maker cannot limit the number of repairers in any one area and the repairer can work with any number of car makers.
However, there has not yet been a rush of independent repairers clamouring to become authorised. Part of the problem is that they would have to spend in the region of £30,000 on upgrades to premises, equipment and training. However, changes are underway that will bring financial savings.
The Office of Fair Trading has already called on manufacturers and dealers to lift restrictions on where new cars can be serviced while under warranty, a move that could wipe millions of pounds from fleet costs. In a report, it claims that motorists could be paying up to £500m a year for car warranties that stipulate franchised dealers must be used instead of potentially cheaper alternatives. But although wider choice could bring lower prices, fleets need to ensure safety standards are not compromised.
While speaking to European fleet managers at a recent conference, Steve Simpson, head of European development at HSBC Vehicle Finance, said suppliers need to treat business car drivers as a “VIPs” and work together to shape the customer experience. He said this would give real added value, thus creating real business growth.
For the dealer, Simpson predicted the changes would bring the benefits of collaborating with other market players and a real opportunity to increase fleet market share. Dealers might dispose of city centre sites and decamp to purpose-built out-of-town premises, which could either help or hinder fleet servicing requirements. There would be new entrants and new propositions with financial services and retail service, working 24-hours a day, seven days a week, through operations offering while-you-wait services, he added.
Greg Taylor, commercial director at leasing firm ING Car Lease, says his firm has embraced the spirit of the changes by adding 450 independent dealers to its books to offer servicing on customer cars. “Block exemption regulations should increase the number of maintenance and repair suppliers, and more choice should result in cost savings for fleets,” he says.
But it may be some time before cheaper garage services and greater competition become truly universal. Taylor explains that it’s still too soon to tell if service levels will change. “Drivers may notice that lead times for the collection and delivery of vehicles will reduce as more outlets are able to service their vehicles. However, infrastructure development will need to take place and leasing firms will have to reassess the network before we see any real changes,” he says.
View our archived webinar, including Oracle and a host of ‘Fast Data’ experts, to discover how financial professionals can help create a Fast Data business
Reinmoeller, professor of strategic management at Cranfield School of Management, has proposed an Eight Actions Model to help organisations increase margin and perform ahead of market expectations
When thinking about Iran as a potential market it’s important to go in with open eyes. This means being aware of some of the myths as well as being clear on the challenges
Third of UK companies with defined benefit pensions schemes are paying out more from their scheme in pensions than is being received in contributions