Suncorp’s joint venture partnership with LKQ, known as Australian Collision and Mechanical Parts (ACM Parts) continues to raise eyebrows among the crash repair industry. VACC, on behalf of crash repair members in Victoria, says it has concerns about the joint venture and will continue to monitor the situation.
Writing previously in Paint and Panel, VACC likened Suncorp’s ownership of ten motor car insurance brands, its joint venture partnership with Capital S.M.A.R.T Repairs and the joint venture with LKQ, to putting Dracula in charge of the blood bank.
“Very soon, there’ll only be a few organisations controlling insurance premiums, policies, repairers and the parts used in the repairs,” VACC Executive Director, David Purchase, said.
Now, VACC has questioned the impact of the Suncorp/LKQ deal on consumers and the wider community. VACC has likened the domination Suncorp exercises on the repair sector to the market domination enjoyed by the large supermarkets over the retail grocery and fuel industry.
“I think there are similarities with the supermarkets’ control of their suppliers, and we don’t want to see that occur more than it’s already occurring in our sector,” Purchase, said.
“Our concern is that the insurers are attempting to dominate the industry from cradle to grave. If we are not careful, soon motorists will have no choice about who repairs their vehicle, no control over the quality of repair, no control over the parts that are fitted during the repair and ultimately no control over the re-sale value of the vehicle,” Purchase said.
VACC is concerned that if independent crash repairers are squeezed to the point of extinction, consumers will have little, or no, choice who repairs their vehicle. Competition will deplete to the point that the last of the small crash repair businesses will exit the market. Then, given a free run of the market, VACC argues, big businesses, like Suncorp, will control everything, especially the prices.
“Many retail automotive small businesses, including crash repairers claim that the big businesses they deal with increasingly treat them unfairly and, often, unconscionably. Big business counter claims that often small businesses can be inefficient, narrow minded and fail to adequately cope with changing market conditions.
“But what is clear is that small business is not listened to or taken seriously by big businesses within their industry, and, as it stands now, if we want to prevent the demise of the small business, then big business, and regulators have to make the playing field fair. And if governments have to intervene, then so be it,” Purchase said.