COMMENT: The German aftermarket is restructuring

COMMENT
Franz W. Rother is Editor-in-Chief of Automobilwoche

German car magazine "Auto, Motor, Sport" recently tested four workshops belonging to Auto-Teile-Unger, a German service chain. The result was a small catastrophe: an oil change was charged twice, faults on the car that put safety at risk were not noticed, schedules were not kept and staff were rude to customers.

"The terrible performance of the repair workshop chain in Weiden crowns a service no burger stand would want to offer," the magazine's tester said about one location.

The members of ATU's board of directors are probably just as shocked about the result of the repair workshop test as investors at KKR, who took over the company in August.

Automobile manufacturers and operators of authorized garages, on the other hand, are probably quite pleased as the fast expansion of the repair workshop chain has been troubling them for quite a while.

ATU now has 484 branches in Germany and is planning to expand its network to 800 locations by 2014.

Other chains such as Autofit, Carat and AutoCrew also have ambitious expansion plans.

Of a total of 42,500 repair shops in Germany only half are authorized ones, and their number continues to decrease.

At the same time the number of repair contracts with authorized garages is falling.

No wonder. People don't want to spend too much. Low-cost chains' tempting offers are no longer noticed just by owners of old cars. Tests, after all, show that authorized repair shops don't always shine, despite car manufacturers' qualification measures.

There is no doubt that the European service sector, along with the entire industry, is in the middle of a major change.

This will be most obvious at the Automechanika fair, which starts in Frankfurt this week. It is the world's largest show for the aftermarket and fast-fit chains have a larger exhibition space this year than ever before.

The independent aftermarket will most definitely be the main subject at this year's show.

Auto manufacturers are concerned. Some of the carmakers that were not interested in the exhibition two years ago have returned to Frankfurt this year full of remorse. They will either introduce their own fast-fit concepts or they will try to keep their remaining partners happy.

In many cases the well-meant advertising campaigns might have come too late. Automobile manufacturers complicated matters for no reason during negotiations over standards and minimum requirements. Some experts even believe that the contracts that were negotiated under a lot of pressure are unethical.

Manufacturers now have to pay dearly for the tough course they set during negotiations that were triggered by the need to comply with new Europe-wide retail rules last year. Car companies will feel that where it hurts most: on their bottom line.

Some of them will be even more affected by this, as the new-car business in Germany and elsewhere in Europe is not living up to expectations. New distribution channels are opening up for the spare parts trade, with business moving away from carmakers to spare parts suppliers and independent chains.

In that respect, the terrible test result of those four ATU garages is only a small consolation for those who try to maintain the system of authorized garages. However, the disintegration of traditional structures within the aftermarket can no longer be stopped. And that is good.

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