Scrappage: scrap the negativity?

Vehicle manufacturer-led schemes have put scrappage back on the agenda. We were worried last time – should we be worried now?

Published:  28 November, 2017

With new car sales on the slide during 2017, vehicle manufacturers delved into their big ideas bag and pulled out a classic from the turn of the decade: Scrappage. At the last count, 17 carmakers  including, Volkswagen, Skoda, SEAT, Audi, Ford, Mazda Renault , Hyundai and Toyota had set up schemes. Money on the table varies, but some are offering motorists up to £8,000.

While these are all manufacturer schemes with no government backing, they bring back memories of 2009-2010 when the official programme was offering motorists £2,000 to scrap their old banger. Many in the aftermarket were pulling their hair out at the thought of customers scrapping perfectly sound older cars to get a discount on a brand new vehicle that would probably not see the inside of an independent garage for some years.     

The freedoms of Block Exemption and the overall business acumen of the aftermarket may have mitigated the damage a few years ago, but now it’s back on the agenda. There are even suggestions that government might consider another official scheme to accelerate the exit of diesel vehicles from our roads. You know, those diesel vehicles that a previous government encouraged in the first place?

Talk about dirty politics.

Anyway, while the manufacturer schemes mostly expire by the end of the year, should we be concerned about the return of scrappage?

Impact
Wendy Williamson, CEO at the Independent Automotive Aftermarket Federation (IAAF) is not a fan: “In general, vehicle scrappage schemes can – and do – negatively impact the aftermarket long-term. An example of this is the 2009 scrappage scheme which removed up to 400,000 serviceable vehicles from the aftermarket and did little to support UK jobs, as most vehicles acquired under the scheme were from non-UK factories. Through offering consumers an incentive, scrappage schemes may be seen as a cynical ploy to increase new sales. And herein lies a major problem, as we’re not just talking about off-road cars consigned to the scrapheap that were due their MOT or service, or requiring replacement parts. While the independent automotive aftermarket is very adept at servicing newer vehicles, much of the servicing and repair of new, zero to three year old vehicles is with the main dealer.

“New vehicle sales are declining, hardly surprising given the highs reached in recent months and years but, the repercussions for the aftermarket could be far worse with new vehicles flooding the market thanks to scrappage schemes.”

Legislative loophole
One obstacle of a potential newer vehicle parc for the aftermarket is the forthcoming Type Approval legislation. This relates to the diagnostics, repair and maintenance of vehicles and are an important step towards improving the legislative framework for independent operators. Over 184 amendments were approved and importantly for the aftermarket included a number of key revisions, the most important of which is keeping the OBD port to the vehicle open and accessible.

Wendy has serious concerns here: “There is a risk that some of the vehicle manufacturers would use a legislative loophole to replace the OBD connector with another system in new models of cars, potentially gaining a monopoly on access to vehicle technical condition data.

“A new vehicle parc makes this more feasible and also raises the question of data access.  If we get the access rights that we should enjoy under current legislation then providing the workshop has the right tools and equipment they should be on a level playing field with the franchised sector.

“However, the information the aftermarket currently receives in not at the same detailed level as the dealer network and this is

For Wendy, the larger issue is not scrappage, it’s what’s coming down the line behind newer cars: “The big threat at the moment is that through ‘the extended vehicle’ the aftermarket will no longer be able to enjoy unmonitored access to the vehicle information.”

Minimal
Opinions on scrappage vary however. While scrappage takes vehicles out of the car parc,  more are always coming in. Terry Gibson, head of member services at the Independent Garage Association (IGA) feels scrappage is not a big concern, or even that relevant to the sector: “So called ‘scrappage’ schemes are good for car sales – period. The last time there was a genuine
So, garages are not losing business, and hopefully not losing sleep either. After all, from a legislative and a practical standpoint, today’s independent aftermarket is a much more sophisticated place – they can handle more modern vehicles in larger numbers – why not let them come?  “Exactly,” replies Terry. “Modern independent garages invest heavily in tools, technology and training to keep pace with changes in vehicle technology. We say – bring it on.”

Of course, legislation can change, and you sometimes take your life in your hands when you trust it to committee. Brexit could have an impact on the Block Exemption Regulation (BER) and Type Approval might not go ‘our’ way. Could independents lose the right to service new vehicles without invalidating the warranty?

Terry has a positive view: “While there is no certainty in this area – and a certain amount of noise in some quarters, the high volume of European cars sold in the UK suggests that it is unlikely that we will see any wholesale change in the right to repair arena.”

Assuming the schemes all succeeded, a surge of new cars coming into the parc could speed up some of the more worrying trends, like connected car. However, the industry is resilient says Terry: “Although it’s true that some of issues around connected cars may present challenges for independents, the inevitable outcome of an increase in challenge is an increase in solutions – driven by the efforts of trade bodies like the IGA.”

It’s not a simple picture is it?  “Very little is simple these days,” adds Terry, but one thing is for sure, independents will never lose customers if they continue to focus on the personal service and honest communication that creates the lasting customer relationships that are the hallmark of independents’.”

For industry consultant Andy Savva, scrappage is a non issue: “I don’t worry about scrappage. As far as I am concerned it is a marketing ploy to pull forward sales. Then again, I was never concerned about my business being damaged by older cars being superseded by newer models.”

Andy’s concern is more about business planning in the aftermarket: “Concerns about scrappage are really come down to fears about change and the ability to plan ahead. Unfortunately, many businesses in our industry don’t do so well in this area.”

Andy believes businesses have all the information they need to work forward and invest, if they look at the sales going on at any given moment: “When I was running my garage, I focused on the three popular brands in my area. I would look at the sales figures and know that cars from those brands were going to be coming through my doors for the next three or four years.”

Planning
Knowing what to do is one thing, applying that knowledge is another though: “In the aftermarket, most garage owners don’t plan ahead. The average mainstream garage might be looking a few days ahead, or a couple of months at best, but not much further than that. It is one of the problems we face as an industry.”

For those who are looking forward, there is a bright side to this, although it’s a little hard on those who don’t: “Within five to seven years, a third of the garages currently in trade won’t be in trade, which means there will be more business for those who are looking forward.

“It’s not just independents who struggle remember – if franchised dealers need scrappage to sell cars, what does that say about their ability to cope?”

On diesel sales dropping as EV and hybrid sales rise, Andy observes: “EVs and hybrid sales are rising, from a very low starting point. If you think your business should be going in this direction, look at where these sales go, look at what’s selling in the local area and plan investment accordingly.

“It’s not rocket science.”


Related Articles

  • Aftermarket scenario planning  

    Definition of uncertainty:
    a state of having limited knowledge where it is impossible to exactly describe the existing state, a future outcome, or more than one possible outcome.

  • Brexit and BER: IMPACT 

    What are the possible outcomes of Brexit for the UK aftermarket and should we be concerned?

  • technologies of electric and hybrid vehicles  

    In the previous two issues, we looked at the way batteries store energy. We could in fact compare a battery to a conventional fuel tank because the battery and the tank both store energy; but one big difference between a fuel tank and a battery is the process of storing the energy. Petrol and diesel fuel are pumped into the tank in liquid/chemical form and then stored in the same form. Meanwhile, a battery is charged using electrical energy that then has to be converted (within the battery) into a chemical form so that the energy can be stored.

    One of the big problems for many potential owners of pure electric vehicles is the relatively slow process of
    re-charging the batteries compared to the short time that it takes to re-fill a petrol or diesel fuel tank. If the battery is getting low on energy, the driver then has to find somewhere to re-charge the batteries, and this leads to what is now being termed ‘range anxiety’ for drivers.

    Whilst some vehicle owners might only travel short distances and then have the facility to re-charge batteries at home, not all drivers have convenient driveways and charging facilities. Therefore, batteries will have to be re-charged at remote charging points such as at fuel stations or motorway services; and this is especially true on longer journeys. The obvious solution is a hybrid vehicle where a petrol or diesel engine drives a generator to charge the batteries and power the electric motor, and for most hybrids the engine can also directly propel the vehicle. However, much of the driving will then still rely on using the internal combustion engine that uses fossil fuels and produces unwanted emissions. The pure electric vehicle therefore remains one long term solution for significantly reducing the use of fossil fuels and unwanted emission, but this then requires achieving more acceptable battery re-charging times.

    Charging process and fast charging
    Compared with just a few years ago, charging times have reduced considerably, but there are still some situations where fully re-charging a completely discharged electric vehicle battery pack can in take as long as 20 hours.  It is still not uncommon for re-charging using home based chargers or some remote chargers to take up to 10 hours or more.

    Although there are a few problems that slow down charging times, one critical problem is the heat that is created during charging, which is a problem more associated with the lithium type batteries used in nearly all modern pure electric vehicles (as well as in laptops, mobile phones and some modern aircraft). If too much electricity (too much current) is fed into the batteries too quickly during charging, it can cause the battery cells to overheat and even start fires. Although cooling systems (often liquid cooling systems) are used to help prevent overheating, it is essential to carefully control the charging current (or charging rate) using sophisticated charging control systems that form part of the vehicle’s ‘power electronics systems.’

    Importantly, the overheating problem does in fact become more critical as battery gets closer to being fully charged, so it is in fact possible to provide a relatively high current-fast charge in the earlier stages of charging; but this fast charging must then be slowed down quite considerably when the battery charge reaches around 70% or 80% of full charge. You will therefore see charging times quoted by vehicle manufacturers that typically indicate the time to charge to 80% rather than the time to fully charge. In fact, with careful charging control, many modern battery packs can achieve an 80% charge within 30 minutes or less; but to charge the remaining 20% can then take another 30 minutes or even longer.   

    Battery modules
    Many EV battery packs are constructed using a number of individual batteries that are referred to as battery modules because they actually contain their own individual electronic control systems. Each battery module can then typically contain in the region of four to 12 individual cells.  One example is the first generation Nissan Leaf battery pack that contained 48 battery modules that each contained four cells, thus totalling 192 cells; although at the other extreme, the Tesla Model S used a different arrangement where more the 7,000 individual small cells (roughly the size of AA batteries) where used to form a complete battery pack.

    The charging control systems can use what is effectively a master controller to provide overall charging control. In many cases  the electronics contained in each battery module then provides additional localised control. The localised control systems can make use of temperature sensors that monitor the temperature of the cells contained in each battery module. This then allows the localised controller to restrict the charging rate to the individual cells to prevent overheating. Additionally, the localised controller can also regulate the charging so that the voltages of all the cells in a battery module are the same or balanced.

    One other problem that affect battery charging times is the fact that a battery supplies and has to be charged with direct current (DC) whereas most charging stations (such as home based chargers and many of the remote charging stations) provide an alternating current (AC). Therefore the vehicle’s power electronics system contains a AC to DC converter that handles all of the charging current. However, passing high currents through the AC to DC converter also creates a lot of heat, and therefore liquid cooling systems are again used to reduce temperatures of the power electronics. Even with efficient cooling systems, rapid charging using very high charging currents would require more costly AC to DC converters; therefore, the on-board AC to DC converter can in fact be the limiting factor in how quickly a battery pack can be re-charged. Some models of electric vehicle are actually offered with options of charging control systems: a standard charging control system which provides relatively slow charging or an alternative higher cost system that can handle higher currents and provide more rapid charging.

    Home & Away
    One factor to consider with home based chargers is that a low cost charger could connect directly to the household 13-amp circuit, which would provide relatively slow charging of maybe 10 hours for a battery pack. However, higher power chargers are also available that connect to the 30-amp household circuits (in the same way as some cookers and some other appliances); and assuming that the vehicle’s AC to DC converter will allow higher currents, then the charging time could be reduced to maybe 4 hours operate (but note that all the quoted times will vary with different chargers and different vehicles).

    Finally, there are high powered chargers (often referred to as super-chargers) that are usually located at motorway services or other locations. These super-chargers all provide much higher charging currents to provide fast-charging (as long as the vehicle electronics and battery pack accept the high currents); but in a lot of cases, these super-chargers contain their own AC to DC converter, which allows direct current to be supplied to the vehicle charging port. In effect, the vehicle’s on-board AC to DC charger is by-passed during charging thus eliminating the overheating problem and the high current DC is then fed directly to the battery via the charging control system.

    In reality, the potential for re-charging a battery pack to 80% of its full charge in 30 minutes or less usually relies on using one of the super-chargers, but battery technology and charging systems are improving constantly, so we
    will without doubt see improving charges times for
    newer vehicles.  

  • DENSO launches new sensors for Toyota and Lexus  

    DENSO has added 10 camshaft and crankshaft position sensors to its range. The five new crankshaft position sensors have 129 applications across the Toyota and Lexus range incorporating both past and present vehicle models. The eight new camshaft position sensors have 119 applications across the same vehicle pool.

  • HELLA Hengst  

    When it comes to filtration, both independent workshops and motor factors want a product that has a reputation for high quality, but is reasonably priced and with excellent availability. HELLA’s logistical abilities and Hengst’s specialist knowledge and manufacturing expertise mean motor factors and garages benefit from this combination of the best of product and service. With more than 1,600 references for passenger car and light commercial vehicle for air, cabin, fuel and oil that cover more than 90,000 applications and 95% UK car parc coverage, HELLA Hengst provides motor factors and their customers with the answer.
    www.hella-hengst.com


Search

Sign Up

For the latest news and updates from Aftermarket Magazine.


Poll

Where should the next Automechanika show be held?



Facebook


©DFA Media 1999-2016

Mentés