ELTA MBO leads to Lucas change

Published:  14 September, 2018

Changes  in the way the Lucas brand reaches the market in the UK and Ireland were announced at Automechanika Frankfurt this week.

ELTA Automotive has recently been the subject of a management buy-out, and as part of the new set-up the company has expanding its Lucas licence agreement for bulbs, wipers and switchgear to include continental Europe, as well as the UK and Ireland, while relinquishing its UK and Ireland Lucas licence for engine management to  Standard Motor Products Europe (SMPE), the brand's existing European licence holder.

ELTA

The ELTA MBO was formally agreed on 11 September, and sees managing director Ian Hallam, who has worked with ELTA since the company was incorporated 25 years ago, become the company’s co-owner, alongside long-term European partner Luxline spol. s r.o – lead by Vladimír Palacka. Ian Hallam and Luxline become equal shareholders of a new holding company, ELTA Investments replacing the previous holding company, Claverdon Fields.

“During a year of notable milestones, which has included our 25th anniversary, the launch of the PRO brands in the UK and now into the European market, “ said Ian Hallam, “the MBO is the highlight, not just from a personal perspective, but for what it brings to the overall package and what the company can deliver to its customers across all regions.

“We are collectively very proud of what the company has achieved so far, but in order to continue our upward trajectory over the next 25 years, there needed to be a fundamental change and that was only possible through a negotiated MBO, which although respectful of the successes of the past, is completely new and therefore able to move in the direction we believe is necessary.”

 On the Lucas shift, Ian observed “Although the PRO brand addition will provide many new opportunities in new territories throughout the world for ELTA, our relationship with the iconic Lucas brand remains extremely important and will be a cornerstone of our European offering. However, as would be expected, a change of ownership inevitably requires a new licence agreement with the brand owners, which is why we are particularly delighted to be able to announce that this has been secured and on a mutually positive basis for both parties. As a result, we are thrilled to have secured a new UK, Eire and continental European licence for automotive bulbs, wiper blades and switchgear. . “By ensuring the continuity of our product specialisms, with the added benefit of a significantly wider territory, allied to the ability to control our own destiny, not only with our own brands, but through a new corporate mind-set, we are on the cusp of great things.

“We can therefore, look to the future with confidence and optimism as it will allow us to continue to grow and launch into new markets, introduce more products and consequently make the ELTA proposition an even more powerful and effective offering for the changing face of the aftermarket and in so doing, ensure success for the next 25 years,” concluded Ian.

SMPE

As a result of the changes, Standard Motor Products Europe (SMPE) is becomes the official UK and Ireland licensee for the Lucas brand of engine management.

Since acquiring the rights to distribute the Lucas brand in Europe, SMPE has invested considerable resources in range re-profiling, packaging and cataloguing. Now, as part of this new, wider agreement, motor factors and garages throughout the UK & Ireland will have access to the programme under the Lucas brand image.

There will now be a period of transition as customers migrate over to the SMPE managed Lucas engine management programme, which includes Ignition coils, cam/crank sensors, air mass meters, lead sets, coolant temp sensors and oil pressure switches, engineered by SMPE in the UK and Poland.

SMPE Commercial Director Richard Morley said: “This is fantastic news for the UK and Ireland aftermarket, home of the Lucas brand. Through our continued success in developing the Lucas brand to customers throughout Europe, we are delighted to be able to offer UK and Ireland stockists the same benefits as we look to grow their sales of engine management products.  

“With the range at its best, our wider plans are to ensure the Lucas brand builds on its heritage and remains synonymous with quality and performance. Under SMPE’s stewardship, we are confident of achieving this.”

SMPE were also the principal suppliers of Lucas branded engine management during the 1990s. Going forward, SMPE will also be working closely with other Lucas licence holders of complementary product programmes.

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    We've been talking about Brexit for a while now. At least once in every issue there will be a story about the process of leaving the European Union, and the potential impact on the automotive sector.  
        
    While progress is hard to gauge, with every issue there is some new angle. It's difficult to keep up, so that handy phrase "as we went to press" gets used a lot. Using it yet again, as we went to press for the October issue, a deal with the EU seemed more likely. Reports were surfacing of Germany and the UK dropping certain demands that would enable an agreement. A positive development then.
        
    Have we been giving a balanced view through the process though, and are we asking the right people what they think? Maybe, and maybe not.

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    David Dawson, co-owner at Preston's Car Doctor contacted Aftermarket to express frustration regarding the coverage of Brexit in the magazine. He had this to say:  
        
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    "I know it’s not automotive news but there will be many opportunities like this for the automotive industry outside of the EU post Brexit. The Germans French and Italians will still want to sell cars to the UK. It just annoys me that the media constantly go on about how bad it will be when we leave the single market. There will be many opportunities and upsides out of the EU even on WTO tariffs."
        
    David added: "I read Aftermarket magazine, both online and the printed version and have done for many years. However in recent times many of your articles paint a dim picture for the industry outside the EU would be nice to read something positive for
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    Having heard from David in the north of England, we thought we might take views from other businesses around the UK, to see what they think the impact of Brexit will be on their business.

    Access
    Turning our attentions south, we asked Kevin Pearce from 2018 Top Garage winners Cedar Garage in Worthing his views on whether Brexit will have a positive or negative impact on the aftermarket. "I think it could go either way," mused Kevin. "I don't see any positives it can necessarily bring. On the negative side, I think we could struggle to get hold of technical data and manufacturer-specific information." According to Kevin, UK consumer buying choices have built up a car parc that could swing things 'our' way: "Considering the number of vehicles we actually import, especially the German stuff, we should actually be in a very strong position to dictate terms. If they want to continue to sell cars to us, whoever is negotiating for the UK should be able to dictate terms on that. Going forward, in terms of telematics we need to make sure the aftermarket stays on the right side of the manufacturers to make sure we continue to get access."
        
    Cedar Garage recently opened a German marques-only outlet, so we wondered if he thought Brexit might have a specific impact on the business's ongoing endeavours: "If it does, not for a long time," replied Kevin. "I think generally it will all come down to how well the negotiations go. We have good access to all the data we need for the German brands. So long as Brexit does not get in the way of that, I can't see how it could cause a problem.
        
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    We went onto ask if Cedar Garage's customers had displayed any noticeable Brexit jitters: "So far it does not look like that at all. We have not seen anything like that. All of our customers are carrying on as normal. If any of them say, ‘I can't afford this or that’ I don't think it affects our trade that much. Maybe if it was car sales, but definitely not in terms of the repair market."
        
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    Uncertainty
    How you feel about the relative opportunities and threats of Brexit can largely depend on where you are sitting. For businesses in Northern Ireland however, Brexit has its own special issues. Starting with the more general concerns,  Colm Higgins from CH Autoservices  in Magherafelt, Northern Ireland said: "I think the biggest issue for most garages, with the position we are in, particularly the go-ahead guys who are into diagnostics, is access to data. This is the issue we would want to address first and foremost. We rely on the access to manufacturer data that is assured through European regulations like Euro 5, so obviously we are concerned. With Brexit nobody really knows what is going to happen.
        
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    "Obviously the price of parts and access to parts, is something to be concerned about as well. MOTs too, as well as emissions. Are we going to establish our own standards? Are we going to be governed by European rules? Or are they going to be similar to the European rules? Is it a chance for the UK to make its own emissions standards. If so will they be similar, or less?  
        
    Colm continued: "Also, what affect will it have on the car parc? What cars will we be working on? Are we going to see a change in consumer activity as well? What the good guys seem to do is look at what people are buying and how the market is going and see the trends. Obviously electric vehicles is something we have invested in here. Is that going to be impacted by that? Is it going to be more or less. It is important to get an idea of where things are going to go. The biggest problem is that nobody knows.
        
    "Almost everybody has a German or French car in the UK, or at least a European car. What is going to  happen? Are they going to be taxed more? In the second hand car market we are still seeing the effects of years of uncertainty over diesel."
        
    "The key thing for any business is to be ahead of the curve or at least be aware of where it is going before it gets there. For any business you would be absolutely crazy to  bury your head in the sand. It gives you a very good reason to read the latest industry news so you know what is going on."
        
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    "There is already a lot of that happening in Northern Ireland" said Colm. "We are about an hour's drive from the border. Some of my customers in trade sales, they sell a lot of cars to the south because the Pound is weak. We can make the most of that depending on the situation, as we can buy stuff from down there and sell it up here, or vice versa. I am optimistic, and we can make the most of that kind of situation. Because we are so close to the border,
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    Despite these concerns, Colm remained confident: "Anyone who is in the higher end of this business is ready to adapt to change. In the next few years you won't see an engine or a piston as it is all going to electric motors. It is change or get out really. Brexit is another factor in the motor trade, albeit one that is going to affect your life in a big way."

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    Your views
    We found a mixture of views from business owners on both sides of the argument. Do these views on Brexit chime with your own? Or do you have an opinion not expressed here? We would love to hear from you. Get in touch with us via alex@aftermarket.co.uk to tell us what you think.

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