Suncorp Group announced a joint-venture today with massive international automotive parts company LKQ.
LKQ is a North American based global leader in the provision of green, aftermarket and reconditioned automotive parts and the partnership aims to establish an Australian parts supply and recycling business.
The business will supply cost effective, high-quality parts to the collision/mechanical repair industries and consumer market, says Suncorp.
Where necessary, aftermarket parts sold by the business will be independently certified to demonstrate ‘fit, form and function’ equivalence to OEM parts. The business plans to supply parts to the smash repair industry by 2014, and then progressively expand the program into the wider market.
Parts supply issues account for regular delays to returning cars to the road, and parts make up approximately half the cost of Suncorp’s repairs, with the company spending approximately $450 million on replacement parts each year.
“As part of Suncorp’s commitment to customer service and quality, the joint venture will seek to reduce long and expensive time delays for consumers by offering a more efficient alternative parts service to the repair industry,” said Suncorp Executive General Manager Sean Dempsey.
Independent research conducted by forensic engineering company Delta-V Experts found the total cost of parts in Australia for a $21,000 medium-sized hatch can be $114,081 – or 543 per cent of the car’s purchase price.
Dempsey said the business would take time to build and any expansion will be reliant on creating genuine value for repairers.
“The objective is to offer repairers an easier and more cost-effective alternative in terms of ordering, delivery and billing,” said Mr Dempsey.
“The business will only be a success if it provides a superior service for both repairers and customers – there is no intention of requiring aligned repairers to purchase parts from the business,” said Dempsey.
The business will build on the outcomes of a successful national green parts trial which saw Suncorp act as a recycled parts broker and increase the efficient use of quality alternative parts.
“In Australia, around 600,000 vehicles reach the end of their life each year – we see a great opportunity to respond to recent regulatory changes in the market, and reduce waste for the community by increasing the use of green parts in Australia,” said Dempsey.
LKQ Corporation is the largest nationwide provider of alternative collision replacement parts in the USA and a leading provider of recycled engines and transmission and remanufactured engines. LKQ also has operations in the United Kingdom, the Benelux, France, Canada, Mexico and Central America operating out of more than 500 facilities.