Jeff Williams, chairman of the Australian Motor Body Repairers Association (AMBRA) has released the following statement on the group's concerns over the IAG genuine parts trial.
"The MTAs body repair division committees have raised a number of significant issues impacting all state members through AMBRA, the national division of the Motor Trades Association of Australia (MTAA).
"Over the past six years IAG has been trialling a parts acquisition and distribution arrangement in NSW and Victoria, and more recently Queensland. This sees the insurer working with a number of manufacturers to supply OEM parts under an exclusive use only by the IAG preferred network repairers. These parts will be distributed via a targeted dealer arrangement which will see contracts awarded to dealers offering IAG better cost benefits on parts. IAG has commenced discussions in both South and West Australia with a view to extending the trial into these two states.
"IAG is looking to select those dealers to provide parts though this exclusive parts program. The MTAS and AMBRA have concerns around the negative impact this arrangement will have on dealerships and repairers that are unable to participate through their inability to price match and/or meet their criteria.
"A meeting was held with IAG, the Australian Motor Body Repair Association (AMBRA) and state small business commissioners in Melbourne. The purpose of the meeting was to allow IAG to provide further detail as to how the trial will work and how individual businesses in both the dealer and body repair sectors will be affected.
"Your MTA and AMBRA are seeking further advice on behalf of Members. What we do know is as follows:
1) IAG has met with a number of manufacturers to participate in this exclusive supply of parts around Australia.
2) IAG has met with a number of dealer groups to outline IAG’s process for participation in the use of their system.
3) Experience from the trial to date supports the suggestion that the majority of dealers stand to lose their parts business generally to a larger group. As an example, IAG has reported that there are 11 dealers in both Melbourne and Sydney covering 13 brands and are participating in the trial.
4) IAG is stressing that participation in the program is voluntary for both dealers and repairers, therefore avoiding any breach of third line forcing laws.
5) IAG has stated that only a participating partnered repairer, that is those repairers who are part of the IAG partner repair network will receive exclusive access to fit new OE parts under this program.
6) Non-partnered repairers cannot be guaranteed OEM parts at assessment, rather a considered request for (NDS) non dealer sourced parts being used
"Repairers need to be fully appraised on how these IAG exclusive parts supplier relationships will impact on your businesses.
For dealers talk to your manufacturer to find out if they are participating and if so, how do they intend to ensure that all dealers have a fair and equitable path to participate in this trial.
"If you are a repairer, talk to your suppliers to find out if they are participating and if so, how this will impact on you. AMBRA is still to gain clarity to what effect this programme may have on your current parts margins
All associations through their body repair division, will continue to work to ensuring a fair, transparent parts supply chain
"IAG has committed to ongoing and continuous dialog with AMBRA and any further considerations will be communicated."
IAG has responded to AMBRA's statement saying: "As IAG recently advised in the news release of February 2017; IAG is conducting a trial in Sydney and Melbourne with partner repairers, who wish to participate, to help better understand the parts distribution model and networks within Australia.
"The number of distributing dealers and partners participating in this trial in both Melbourne and Sydney was not an exercise reducing the number of dealers, but more of aligning the dealers with the number of franchises and smash repairers participating.
"The trial operates within the terms of PDS documents and our publicly available parts policy.
"IAG has committed to extend the trial to Queensland, South Australia and Western Australia to ensure a national understanding of the smash parts sales and distribution markets."