CMA decides on ECP/Andrew Page merger

Published:  31 October, 2017

Euro Car Parts’ acquisition of Andrew Page has been approved by the Competition and Markets Authority (CMA), subject to the sale of  nine depots.

The CMA found that the purchase of Andrew Page could lead to higher prices or lower levels of competition in Blackpool, Brighton, Gloucester, Liphook, Scunthorpe, Sunderland, Wakefield, Worthing and York. ECP must sell a depot in each area to a purchaser approved by the CMA for the merger to progress.

Professor Alasdair Smith, Inquiry Chair, said: “Following an in-depth investigation, we have found that this merger has the potential to drive up prices or reduce levels of service for customers in nine local areas. That’s why we are requiring a depot in each area to be sold to a buyer approved by the CMA.

“Outside of these areas, we did not find that the merger will further reduce competition compared to what would have happened if Euro Car Parts had not purchased Andrew Page.”

Sukhpal Singh, chairman of LKQ UK & ROI, commented:  “We are genuinely thrilled the future of the Andrew Page business has been secured, which celebrates its UK centenary this year. We remain committed to assuring that the Andrew Page ‘brand’ continues to thrive and remains separate from Euro Car Parts, but will benefit from our UK infrastructure, inventory and the financial support from the LKQ Corporation.

Martin Gray, CEO of Euro Car Parts, stated: “Euro Car Parts will continue to work with the CMA to bring this process to a conclusion and will update as appropriate.  We are delighted that approval has been clarified. This will provide welcome direction and confirmation for our customers, employees, suppliers and shareholders.”

ECP bought most of the Andrew Page business in October 2016, after the company went into administration.

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  • Certifying your future 

    The rate at which the modern car is developing to include new functions based on new technologies is exponential.

    The car owner is often unaware of this, as they see only the ‘HMI’ (human machine interface) that allows them to select and control functions and along with many other electronically controlled ‘things’, the expectation is that ‘it just works’.

    Two key elements are changing with today’s and tomorrow’s cars. Firstly, they are changing into more sophisticated, interactive electronic systems, which require high levels of software compliance. Frequently this can mean that the vehicle needs ‘updating’ which may apply to one system or the complete vehicle. Today this is increasingly conducted by using standardised interface (vehicle communication interfaces – VCI’s) and pass through programming by establishing a direct connection between the vehicle and the vehicle manufacturer’s website. This is now being used even at the level of replacing basic components, such as a battery or engine management system components.

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    Increasing isolation
    The in-vehicle E/E architecture is therefore not only increasingly complicated and inter-active, it is more vulnerable to incorrect repair processes. To ensure that this risk is minimised, the vehicle manufacturers are increasingly isolating any possible external connections from the in-vehicle communication buses and electronic control modules. Effectively, today’s 16 pin OBD connector will no longer be directly connected to the CAN Bus and in turn to the ECU(s) but will communicate via a secure in-vehicle gateway. There may also be a new standardised connection which becomes a local wireless connection in the workshop as well as having remote telematics connection, but in both cases, the access to in-vehicle data is no longer directly connected.
        
    Why is this isolation and protection of the in-vehicle systems so critical? Apart from the obvious protection against any malicious attack, there is an increasing safety issue. Thinking longer term, what happens when semi-autonomous cars or fully autonomous cars come into your workshop?
        
    The key question is how to conduct effective repairs on these vehicle systems. At first glance, it may be the basic servicing still needs to be done, but even this will become more difficult, with certain items already requiring electronic control or re-setting. As this develops into more sophisticated systems, the vehicle manufacturer may try and impose more control over who is doing what to ‘their’ vehicles, based on their claim that they have a lifetime responsibility of the functionality of the vehicle and therefore need to know who is doing what where and when. This may lead to an increasing requirement for independent operators to have some form of accreditation to ensure sufficient levels of technical competence before being allowed to work on a vehicle. However, there is also a strong argument in many European countries (the UK included) that this is a market forces issue and that it is the choice of the customer who they trust to repair their vehicle and it is the responsibility of the repairer to be adequately trained and equipped.

    What’s coming?
    Will this market forces attitude still continue when the autonomous vehicle systems are part of the intrinsic safety of the vehicle? This is increasingly becoming the case as these semi or fully autonomous systems take over more control of the vehicle and stop any driver control.
       
    Certainly, anyone attempting any DIY repair will find it much more difficult to access the information or the tools/equipment needed to repair their vehicle, as this will be beyond the knowledge and economic reach of the ‘Sunday morning repairer’, but should DIY repairs even be allowed in the future?

    This raises an interesting argument about who should be allowed to work on a vehicle as the correct repair procedures become increasingly critical. Of course, vehicle manufacturers will continue to have full access to the vehicle and it’s systems, which increasingly will be via remote (telematics) access. This may even compromise the access available to authorised repairers (main dealers), but is seen as a necessary requirement to ensure that the vehicle has been repaired correctly and that the in-vehicle software is still functioning correctly.

    The counter argument is that this also provides unacceptable levels of control and monitoring of the complete independent aftermarket – so what could be a solution?

    Controlling competition
    No one is trying to say that safety and security are not important, but there must be a balance as independent operators will continue to need access to diagnostic, repair, service and maintenance information and continue to offer competitive services to the consumer. The European legislator must protect competition, but this may also come with appropriate controls and this may mean that tomorrow’s technicians will need to demonstrate certain levels of competence, together with an audit trail of the work which has been performed in the event of a vehicle malfunction.

    Independent operators already need high levels of technical competence – necessary for the consumer and the effective operation of their own business, but in the future this may also mean a form of licensing or certification that is required by legislation. If this becomes necessary, then it has to be appropriate, reasonable and proportionate.

    The alternative is that the vehicle manufacturer could become the only choice to diagnose, service and repair the vehicles of tomorrow. I am sure we all agree that it is not what we want or need, so it may be that the increasing technology of tomorrow’s vehicles is the reason that the industry should now embrace change to mirror other safety related industry sectors, such as Gas Safe or NICEIC – qualified, competent and registered. The future is changing and the aftermarket needs to change with it.

    Want to know more?
    Find out how Neil’s consultancy for garage owners can benefit you by visiting xenconsultancy.com.

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