Replacement parts – true to type?

What would be the outcome if a wider array of replacement parts were subject to Type Approval?

By Neil Pattermore | Published:  28 December, 2017

The aftermarket has developed for well over a century to provide choices to the vehicle owner concerning how their vehicle is repaired, with an increasing choice of replacement parts and emanating from all of this, ‘affordable mobility’ for vehicle owners and drivers.

However, this may now be under threat, and with it, the very basis of your business as a part of the  aftermarket value chain. In the past, replacement parts have principally been in one of three categories. First, lower cost items without any specific requirements – other than they fit and work. Second, parts which are specifically designed to be of matching quality that directly emulate the original part. Thirdly, original (OEM) replacement parts that formed part of the original vehicle design when it was type approved.

This choice and availability of spare parts is provided by both local and national distributors who provide a wide range of replacement parts that allow vehicles to be serviced and maintained throughout their life, with the lower priced parts becoming more popular as the vehicle gets older. The UK Consumer Rights legislation imposes that any part, which now also includes any digital content, must be ‘fit for purpose’ and cascades into a ‘duty of care’ and ‘liability’ between the parts distributor, the garage and the vehicle owner.

Under review
Unfortunately, there is a cloud on the horizon. The existing vehicle Type Approval legislation is currently under review in Brussels and although the existing version contains requirements for some replacement parts to be type approved, it is being proposed to implement an extension of these Type Approval requirements to cover more replacement parts. The Type Approval of these replacement parts is deemed necessary to ensure that vehicles continue to comply with their original ‘whole vehicle Type Approval’ requirements throughout their service life and is seen as an increasing issue with automated systems and autonomous vehicles.

Existing type approved replacement parts include windscreens, tyres, headlamps, catalysts, exhaust systems, DPFs and brake disks, drums, shoes and pads. These all show an ‘E’ mark that confirms where they were tested to meet type approved requirements, e.g. E1 is Germany. System and component Type Approval requires that a ‘sample of the Type to be Approved’ is tested by the ‘Technical Service’ (i.e. a test centre) to the requirements of the relevant European Directive, which is increasingly now based on the UNECE Regulations agreed in Geneva. Its technical specification is documented and that specification forms part of the approval. Both the parts distributor and the workshop need to be confident that an audit trail back to the original replacement parts manufacturer’s certificate exists to prove that the part is legitimately type approved to protect their own liability, should they be challenged to prove that the part’s Type Approval marking is legitimate.

This proposed widening of the replacement parts Type Approval is not a simple problem. Apart from braking components being covered under UNECE Regulation 90, there are no dedicated test methods for these replacement parts. This creates two significant issues. Firstly, when a vehicle is type approved, it is the system that is tested (i.e. engine emissions, steering, braking etc.) but for replacement parts, it is not clear what specific replacement item should be type approved. For example, should it only be the principle components such as an electric motor, or would it be just a bolt or washer that helps secure a steering rack? Secondly, as there are no test methods established, would this mean that a component could only be tested on a complete vehicle and if so, unless it is a new vehicle, how do you know if other components on that vehicle are working correctly?

Clearly, it is not clear.

Burdens and costs
This proposal also means significant additional burdens and costs to complete these new obligations which ultimately will have to be paid for by the consumer. This is likely to lead to increased cost of servicing and replacement spare parts, but without any direct benefit to the consumer over what is happening in the market today. It would also mean that specific design and functional specifications would need to be provided by the vehicle or system manufacturers, which is likely to raise intellectual property and design rights issues.

Enforcement will be a market surveillance issue, but there are limited resources available from the Governmental agencies, so all workshops would now need to be confident of the legitimacy of the Type Approval marking of components before installation. This has already led to dawn raids on parts distributors in some European countries. Ultimately, this proposal is likely to impose less choice for consumers, as fewer parts manufacturers would risk the cost/volume investment, with higher prices for those parts that remain available.

From the vehicle manufacturers‘ perspective, they conduct whole vehicle Type Approval which includes all systems and their inherent parts and components. For the vehicle manufacturer’s replacement parts, they are deemed to be Type Approved if they are identical to those fitted to the original type approved vehicle. For aftermarket replacement parts,  each replacement part would have to be tested for each of its applications, meaning not only finding examples of the actual vehicles, but also the test centres that can conduct the Type Approval testing. There is a real proportionality’ issue here, especially with no dedicated test methods for the Type Approval of these replacement parts.

Reduced choice
Behind this issue, some vehicle manufacturers and also some Member States consider that although vehicles are subject to Type Approval, aftermarket replacement parts are not and this is deemed as being both unfair and un-regulated. It is claimed that by Type Approving aftermarket replacement parts, that it will create a level playing field for all replacement parts, but I don’t agree –  it seems to me that the vehicle manufacturers have the most to gain and that it will ultimately be the consumer who suffers through having a reduced choice of replacement parts, which will also be more expensive.

Today, for just about every other part or component of the vehicle there is no current requirement for ‘E’ marking or any form of direct testing to pre-determined standards. If a part is replaced and the vehicle remains safe, secure and roadworthy, it is perfectly acceptable – if aftermarket parts did not fit and work correctly, then they would not be fitted or they may flag a fault code or fail an MOT.

FIGIEFA (the European association of spare parts distributors) have robustly challenged these proposals as both unwarranted and disproportionate. Additionally, they consider that it would distort competition, rather than improve it and would raise costs with very limited benefits. Repair workshops would increasingly buy original parts from their local dealer to minimise any risk of using non-Type Approved parts – undermining the competitive choice of the Aftermarket and increasing consumer costs.

Sorry, but did I miss who would be the major beneficiary from all of this?

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    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?

    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.”

    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.”

    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?”


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