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When analysing the car servicing and repair market drivers, the ‘usual suspects’ include: car parc size and age profile; average car mileages; build quality trends; service intervals and content; new car warranties; labour rates …. with political and legislative factors barely a consideration. However, that could be about to change with the government’s review of the MOT test regime.

This is the second review of MOT testing in three years. The 2008 proposals, to postpone the first MOT test to four years from first registration and to test vehicles every two years thereafter (4-2-2), were not enacted.

But in mid-April 2011 the Secretary of State for Transport, Philip Hammond, announced informally (via a newspaper report) that the government would be consulting on proposals to adopt either a 4-1-1, a 4-2-1, or a 4-2-2 frequency regime. The current frequency of 3-1-1 does not seem to figure in the new review.

Any changes to MOT testing will have an impact on the retail market for car servicing and repairs. In our latest report on the market, we have not included the possibilities in our forecasts because at this stage we don’t know the outcome of the review.

We estimate that the total retail servicing and repair market including MOTs in 2010 was worth £9.46 billion (excl. VAT). A move to a 4-2-2 regime will reduce the market by at least £500 million in lost MOT test fee income – equivalent to the annual labour of 5,000 technicians.

In our most recent consumer survey of 15,725 motorists we noted that 70% of MOTs were completed by independent garages, which will obviously be hardest hit by any watering down of test frequency.

On top of the loss of MOT test fees there is the likely loss of associated work; servicing and repairs. From our consumer survey the chart illustrates the type of work carried out on cars over three years old. So, for example, 8.8% of motorists visited a provider for an MOT, routine service and one or more repairs. Nearly half of all visits to a provider included an MOT test.

Work carried out during visit to provider (3+ year-old cars)

In all likelihood, the number of repairs will stay the same if MOTs are less frequent. However the number of routine services could fall if motorists break the habit of the proverbial ‘service and MOT’. As a result, the more pessimistic forecasts of redundancies and independent garage closures could well come true.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in August 2011.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

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