Select Committee on Trade and Industry Appendices to the Minutes of Evidence


Memorandum by the Automotive Distribution Federation



Automotive Distribution Federation (ADF)

  The ADF is a not for profit organisation representing manufacturers, importers and independent wholesalers (motor factors) of vehicle parts and accessories.

  Membership of the ADF includes a wide range of companies varying in size from global automotive parts manufacturers (many of whom supply components for use when vehicles are assembled—"Original Equipment" or "OE suppliers"), through national and regional networks of parts distributors, down to local family businesses wholesaling parts and other items to their local garage trade.

  The ADF was established in 1930 as the Motor Factors Association, changing its title in 1990 to reflect a broadening of its membership across the whole sector of vehicle parts distribution. Policy is decided by an elected Council of members and executed by a small permanent secretariat.

  The Federation has no commercial undertakings with its members (other than by Membership subscriptions) and so can present an authoritative and unbiased view of issues pertaining to the independent automotive aftermarket.

  Should any further information regarding the ADF and its activities be required, please contact the Federation's offices.


Description of the Independent Automotive Aftermarket

  The "Aftermarket" is the sector of the motor industry that deals with maintaining, servicing and repairing vehicles after they have been put into service— "on the road".

  The "Independent" sector is that part of the Aftermarket that is not linked to the distribution chain organised and controlled by the Vehicle Assemblers (VAs) and their franchised dealers.

  Parts and other materials required for servicing or repairing a vehicle may be sourced either from a franchised dealer or through an independent distributor (motor factor). Dealers would tend to supply items solely for the marque for which they are a dealer, whilst motor factors would supply parts to suit all marques or makes.

  Motor factors generally source their stock from the original equipment supplier of the parts, although there are a number of non-OE suppliers into the market and many OE suppliers supply parts for vehicles for which they do not have original contracts.

  Parts supply has regularly been an arena in which claim and counter-claim of "poor", "sub-standard", "copy", "pirate", "spurious" and other derogatory terms have been bandied about by the Vehicle Assemblers (VAs) in an effort to obtain a foothold in a sector of the market in which, for many years, they have failed to take an interest.

  The Independent Aftermarket has found that, in considering proposed legislation, vigilance is required to ensure that VAs' misleading statements regarding the quality and suitability of parts supplied through the independent sector are not allowed to go unchallenged. It is with this background that we wish to comment upon "End of Life Vehicles" proposals.


Commentary on specific clauses

  As identified in Section 2, our perspective on ELV legislation is coloured by the activities of various Vehicle Assemblers (VAs) in trying to establish a dominant market position vis-a"-vis the independent suppliers of replacement vehicle parts and accessories. The independent parts aftermarket wishes only to ensure access to the market and efficient handling of parts requiring scrapping or recycling.

  For that reason the submission made to the European Commission by the European sub-committee (CLEDIPA) of our "umbrella" international association (FIGIEFA), concentrated upon the insertion of an "anti-monopolisation" clause into Article 3(1) of the Regulations. This amendment provides that the Directive "shall apply irrespective of how the vehicle has been serviced and irrespective of whether it is equipped with components supplied by the VA or with other components which have been fitted as spare or replacement parts".

  This amendment was accepted by the Commission and is included in the text. However, it is possible that even this phrase may be misused by VAs seeking methods by which sections of the motor industry; ie the independent (non-franchised) dealers; may be disadvantaged. Ideally the independent parts aftermarket would have substituted "as replacement or retrofit parts".

  That protection for the consumer, through the inclusion of the "anti-monopolisation clause", is maintained is, in our view, essential.


Role of Remanufacturing

  We understand that there are new proposals for inclusion in the Directive regarding aspects of recycling and recoverability from vehicles at the end of their life. It appears that Vehicle Assemblers (VAs) will in the future be required to give a list of how a vehicle is composed in order that it may be recycled most efficiently. In this context, we understand, definitions of what constitutes a "re-used" part are to be agreed.

  We feel that considerable effort will be required to establish clear definitions of recycling and recoverability. These definitions will require statutory status and means will have to be found to ensure the consumer is protected from misuse of the terms and misuse of the parts themselves. There are significant dangers from the unregulated reuse of vehicle components.

  Reuse—scrap—used—second-hand—recycle—recondition—rebuild—remanufacture, are all terms that are currently misused by various sections of the motor trade. Depending upon the component concerned, and its use in a safety-critical section of the motor vehicle, there is a varying scale of acceptability for reuse of components.

  As examples: A rear light cluster incorporating tail, stop and indicator lights is easily transferred from a scrap vehicle to another in service with little chance of compromising the safety of the vehicle.

  However, reuse of a brake disc calliper from an old, or crashed, vehicle will require expert engineering knowledge and equipment to ensure it operates effectively and does not compromise the safety of the vehicle and its occupants. Similarly, steering and suspension components, electrical and electronic units, air bags and other passive safety system, will all require expert examination and detailed reworking of the item. Even away from the "swap it over" mentality of the scrap yard, there are still degrees of reworking components; from reconditioning through rebuilding to remanufacturing.

  In order for the legitimate remanufacturing companies to perform their role and, in so doing, protect the environment, they need access to component performance information from the original supplier of that component or from the Vehicle Assembler who installed it. This is particularly important in relation to components which are either engine management units or report to those units. Lack of the appropriate data, in a usable form, will hamper the efficient recycling of components.

  Significant assessments on the problems of, and benefits from, recycling of parts has been done by two major industry groups. CLEPA—the European Association of Automotive Suppliers and the European chapter of APRA—the American Parts Rebuilders Association. A copy of an APRA booklet on this topic is enclosed.

  The ADF supports the views of these two organisations on the topic of recycling parts.



  The ADF is convinced that the measures included in the "End of Life Vehicles" Directive will prove beneficial to the environment and to the benefit of vehicle owners, as long as the current competitive elements in the market are allowed to continue. The attempts by Vehicle Assemblers to distort market forces and reduce competition, to the detriment of the consumer, must be resisted.

  For the further protection of the consumer and in the interests of road safety, we feel that measures to regulate the supply of recycled parts need to be introduced. We, along with other trade groups, are ready to assist in any further examination of this problem area and would welcome the opportunity to develop an industry-wide code of conduct.

  The ADF will be pleased to offer any further information or advice deemed necessary by Members of the Committee.

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