Is your business approved?

Independence is the one of the defining principles of the UK automotive aftermarket; What happens if that freedom is eroded?

Published:  19 June, 2023

Running a vehicle repair business is never a simple task – all those awkward customers, and sometimes staff, not to mention your competitors around the corner, key suppliers, technical training and all the various tools and equipment needed, to mention but a few.
    
However, when all your planning and hard work come together, your business succeeds because your team work hard to ensure that you provide a great service that is valued by your customers and the final result is that you are profitable. Great job!

Key elements
What I haven’t mentioned are those key elements that are outside of your control, but which directly or indirectly impact your business. The list may be longer than you think and probably includes not just variable costs, such as when a war impacts energy costs so greatly, but closer to home in every sense of the word, are those elements where compliance is required, but that which you need to comply with are outside of your control.
    
Local planning restrictions, parking constraints or business rates are all critical and can be decided without any consultation.  Perhaps more concerningly, the UK government can implement legislation that directly impacts your business without consulting with you. The most recent example is a very detailed document that amends a whole range of legislative requirements for vehicle type approval. At this point, I imagine that your eyes are glazing over and your brain has simply asked ‘why should I worry about this?’ Let me explain, as this is critical to your ability to diagnose, service, repair or maintain your customers’ vehicles – which is rather fundamental to the success of your business model!
    
The automotive aftermarket requires access to a wide range of technical information, tools, training and spare parts, but all of this originates directly, or indirectly from the vehicle manufacturer who have their own dealer network, so are not incentivised to support competition from the independent repair sector.

Critical
A quick history lesson is needed here of why legislation is so critical for the Aftermarket. In the 1980s, it was a simple issue of interpreting the first electronic systems’ blink codes, followed in the 1990s as vehicles became more technically advanced, with the ability to access and use the data and DTCs as the basis for repair and maintenance. This had become an increasingly key issue and the legislator needed to act to ensure that effective competition was still possible. This was created as part of the European Motor Vehicle Block Exemption Regulation (MV-BER), which provided an exemption from Competition Law requirements when main dealers had geographical monopolies when selling vehicles, but also supported competition between authorised and independent workshops. This came into force in 2002. This provided a framework that detailed what a vehicle manufacturer had to make available to independent operators (i.e. all aspects of the aftermarket – diagnostic equipment, tools, spare parts, training, technical information etc.) on a non-discriminatory basis when compared to what their main dealers could access and use. This was a good basis, but in legal terms it is based on Competition Law which was difficult to enforce if a vehicle manufacturer was deemed to be non-compliant.
    
The legislators in Brussels (the UK was still part of the EU at this time) were made aware of the difficulties of an independent workshop trying to legally challenge a vehicle manufacturer (i.e. good in principle, difficult if not impossible in practice), so decided that as this was predominately a technical issue that it should become part of the vehicle type approval requirements. This allowed a much more detailed description of how access to a wide variety of requirements must be made available to independent operators and which in turn, could be checked by the type-approval authority, both at the time a vehicle was type-approved or later if a non-compliance was raised via an aftermarket trade association. This was introduced in 2007 as part of the Euro 5 Type Approval regulation and has been significantly updated in 2018, before coming into effect from September 2020.
    
The MV-BER has also now been revised to better reflect the realities of the market and is being implemented from 1 June this year (so, as you read this, basically right now), but behind all of this legislation, Brexit has occurred.
    
Although the Department for Transport (DfT) had issued two previous consultations to which various Aftermarket associations had responded, without being informed by the DfT, these associations learned between Christmas and New Year that a new UK Regulation had been implemented that came into force at 23.00 on 31 December 2022 (effectively 1 January 2023) as part of the UK government’s overall revisions of EU legislation that will still apply in the UK. This new Regulation (2022 No. 1273) was a 141-page list of detailed amendments to various pieces of legislation that refer to vehicle Type Approval.
Serious concerns

This was designed to help tidy up the quite complicated array of vehicle type approval requirements for vehicle manufacturers. However, for the aftermarket, there are some serious concerns. These range from the deletion of important references, such as the access to repair and maintenance information (RMI), as well as the security forum which created the SERMI scheme to provide standardised accreditation for independent operators to access anti-theft related RMI from all vehicle manufacturers, to completely deleting EU secondary legislation.
    
However, although this new Regulation retains the reference to the EU type approval regulation that came into effect in September 2020 (EU 2018/858), it does not reference what has subsequently been enacted in the EU to provide the greater technical details of ‘how’ the requirements must be fulfilled (secondary legislation), only the what’. In other words, the retained UK type approval regulation uses expressions such as “Manufacturers' obligations to provide vehicle OBD information and vehicle repair and maintenance information,”  but without stating the process, costs, conditions or the detailed content of how this will be done.
    
As another example, the legislation states: “Manufacturers shall also make training material available to independent operators and authorised dealers and repairers,” but again, not the details of how this would be done, so when trying to book onto a vehicle manufacturer’s training course perhaps no places exist for 12 months or more for independent repairers.
    
Equally, the UK government has not provided any indication of what they may be considering to provide this further technical detail – and without this, independent operators will be increasingly controlled by what a vehicle manufacturer chooses to impose, ultimately restricting independence and competitiveness. Against the background of other Type Approval requirements for vehicle cybersecurity, embedded applications for diagnostics or prognostics for bespoke service and maintenance requirements (which are fully controlled by the vehicle manufacturers), the UK government needs to wake up and smell the coffee and listen to the needs of the UK aftermarket to ensure consumer choice for competitive vehicle repair and maintenance services are covered by detailed secondary legislation.
                     
xenconsultancy.com

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