Automotive Blog

The gloves are off!

121112 Halfordsbanner

One of the most contentious issues in the franchised dealer versus independent repairer battle for market share is whether independents are actually cheaper.  Both sides make strong arguments in defence of their price competitiveness, but there’s not yet been a knock-out blow.

Events took a new twist in the UK last week, following a complaint by the SMMT (interestingly the trade organisation for the manufacturers rather than dealers, who share their umbrella organisation, the RMI, with the independents) about a website advertisement posted by Halfords Autocentres, the #1 UK independent repair chain.  They protested to the Advertising Standards Authority, who regulate all UK advertising, that the claim that Halfords was “50% cheaper” than main dealers was misleading.

The Advertising Standards Authority found in favour of the SMMT, so Halfords have reluctantly amended their advertisement, illustrated below, to add some more detail on the basis of the claim, and revising the claimed advantage to 40% - but 60% if the customer takes advantage of some special online offers.  Not sure that SMMT and the franchised dealers will be too happy with the result, and I’m sure that the publicity of the investigation will drive more people to the Halfords site.

121112 Halfords

To us, as people who pay for our own car servicing, and as researchers, the claims seem some way off the mark, and some UK dealer groups such as Vertu are reporting 80%+ overhead absorption against a sub-60% UK average on the back of a concerted campaign promoting price competitiveness.  However, as aftersales volumes decline (see our report “Modelling the EU aftermarket” and briefing “Modelling scenarios for reducing aftermarket decline” which we will be updating next year), the fight for the customers’ attention will intensify and we can expect to see more protests like this one.

Source: Motor Trader.  Image: Halfords

Written by Steve Young

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