Block Exemption Drives Factoring Increase

All-makes parts supplier Motaquip suggests that more independent garages are setting up motor factor operations to support their core business and the driving force behind this trend is the changes in Block Exemption.

Motaquip says that new business start-up enquiries to its Partnership Programme from garage owners have more than doubled as garages are looking to enter the parts distribution chain. This contrasts with 2003, when only one in 10 of Motaquip’s enquiries came from independent garage owners. Block Exemption has been cited as the major contributory factor in this growth, which has left many garages needing a good source of quality parts.

Says Peter Cox of Motaquip: “Clearly, on many occasions, an experienced garage owner has looked at the local factor competition, analysed the supply opportunities and ensured that they have a team with strong factoring credentials to run the operation. Garages in an area know better than anyone when existing factors in an area are failing to deliver on their requirements.

“However, for some garages there could be wider automotive issues acting as a catalyst. Changes to Block Exemption legislation may well have caused a minority of garages to realise the benefits of supplying parts to other garages and some franchised dealers. However, on the other hand, increasing vehicle complexity and a fear for the independent sector in the future may have led some garages to look at additional revenue opportunities.”