Over the Counter May 2005

Canadian Tire Plans to Triple PartSource Count

Canadian Tire Corporation, Limited has announced a strategic plan that will, among other things, see its PartSource chain triple in size.

The new strategic plan is for the 2005 – 2009 period and follows a similar plan as it has followed for the past four years.

“Over the past four years we have successfully implemented our business strategy and, in the process, enhanced our core capabilities,” says Wayne Sales, president and chief executive officer. “The work we initiated in 2001 helped us develop a number of exciting business opportunities with growth potential. For example, we introduced the Concept 20/20 store-merchandising format, improving sales and enhancing our customers’ shopping experience. We established the Canadian Tire Bank and made the transition from a retail credit card company to a bank credit card company, more than doubling our gross average receivables. We also acquired and successfully integrated Mark’s Work Wearhouse, expanded the PartSource network, and increased our brand presence in gasoline retailing across Canada.

“As we look at the goals that we have set for the next five years, we believe there are further opportunities to unlock value from our existing businesses. We have a strong balance sheet, a unique and successful mix of businesses and a team that is completely focused on implementing our plans to deliver long-term value for both our customers and our shareholders,” added Sales.

Specific to the PartSource chain, currently with under 50 outlets, the company says efforts will focus on building new stores and pursuing small-scale acquisitions to nearly triple the size of the chain to approximately 130 stores by the end of 2009.

The plan is also to continue the company’s program to replace traditional stores with larger, more modern, new-format stores, many of which feature the new Concept 20/20 format. In total, Canadian Tire’s incremental store count will increase by 24 from 457 to 481 by the end of 2009.

Ontario Mandates Aftermarket Part Notification

Ontario’s new Consumer Protection Act (CPA) is expected to mandate important changes in the way repair operations conduct their business.

“The main variance in the way you must do things under the CPA involves repair estimates,” says William Birkimsher, director of the Automotive Aftermarket Retailers of Ontario (AARO). “Under the current MVRA regulations, a written estimate for work to be done is necessary only if the customer requests one. Under the CPA, a garage will be required to give all customers a written estimate, and cannot charge for the repairs if it fails to do that.”

The act, which will become law on July 30, 2005, will require, for example, that any aftermarket parts must be identified in writing to the customer.

Shops will be required to provide a written estimate prior to performing the work, though they may charge a reasonable fee for giving an estimate.

Under the current Motor Vehicle Repair Act, estimates are only required if the customer asks for one. Under the new law, if a written estimate is not given, the shop cannot charge for the repairs.

The new law does open up some questions, as it is expressly permitted to charge for diagnostic procedures only if subsequent work is not carried out. This appears to be a move to compensate a business for the time and effort to dismantle and reassemble components in the event the consumer opts not to have the work done. However, the question of how to handle systems diagnostics has been unanswered.

As with the current law, the cost of repairs may not exceed the estimate by more than 10% unless prior authority has been obtained and properly noted.

Shops must feature signs that explain their pricing levels and policies and how they calculate labour rates. Estimate information must also be posted.

For more information, visit http://www.e-laws.gov.on.ca/DBLaws/ Statutes/English/02c30_e.htm. The main area of interest will be “Part VI- Repairs To Motor Vehicles And Other Goods.”

Affinia Sells Beck/Arnley Subsidiary

Affinia Group Inc. has announced the sale of its subsidiary, Beck/Arnley Worldparts Corp., to Heritage Equity Group, Inc.

Heritage is a privately held company funded entirely by private investors, and in part by Beck/Arnley management, though Affinia Brake & Chassis representatives in Canada have stressed that the company will continue to represent the lineup here.

Executives from both companies said that the deal will allow improved focus on each business: Affinia as a marketer of products it manufactures, Beck/Arnley as a niche marketer.

Autobody Training Gets Boost

Centennial College in Toronto, Ont., has announced plans to build an advanced autobody training facility.

The project is supported by private-sector partners and the Ontario government and will be located at the college’s Ashtonbee Campus in Scarborough, Ont.

The Ministry of Training, Colleges and Universities is funding the college’s Autobody Lab Renewal proposal from the Apprenticeship Enhancement Fund. The ministry is providing $531,450 towards the project, while industry partners PPG, TEC3 Innovations and their suppliers have committed to providing more than $400,000 in equipment. An additional $100,000 worth of donations is anticipated.

The existing lab will see virtually all of its equipment replaced with the latest paint technology. The state-of-the-art facility will be used to teach apprenticeship, post-secondary and continuing education Autobody Collision Damage Repairer and Automotive Painter programs. Renovations will take place over the summer in preparation for fall 2005 classes.

Uni-Select CEO Takes Role With Industry Council

Jacques Landreville, president and chief executive officer of Uni-Select Inc, has agreed to represent the automotive aftermarket on the Canadian Automotive Partnership Council.

The Canadian Automotive Partnership Council (CAPC) is an industry-led organization formed in September 2002 to address key competitive issues facing the Canadian automotive industry, including both the original equipment and aftermarket segments, on a variety of issues. Membership comprises the CEOs of Canada’s five assemblers, and four leading parts suppliers, representatives of industry associations, the president of the Canadian Automotive Workers Union, the president of the University of Windsor, and provincial and federal Ministers of Industry.

“Mr. Landreville’s comprehensive knowledge of the automotive aftermarket at all levels of the distribution chain make him an excellent choice to represent the interests of the industry with governments,” says Automotive Industries Association of Canada president Ray Datt.

Landreville replaces Robert Blair of Carquest Ltd., who could not continue in his role on CAPC as he has been reassigned to new responsibilities working for Carquest in the United States.

OBITUARY

Jack Davies

Jack Davies, founder of Davies Auto Electric Ltd., in Mississauga, Ont., former president of the Automotive Industries Association of Canada, and recipient of the association’s Distinguished Service Award, passed away Saturday, April 2 at 78 after a five-year battle with cancer.

Davies, who was an active member of his church and gave freely of his time to many charities, was particularly committed to his work as a volunteer at the Scott Mission and the Sleeping Children Around the World charity, which resulted in six trips for the cause to India.

Over the years, Davies served as an ambassador for the automotive aftermarket through his continued involvement in industry events and organizations.

In memoriam donations may be made to the Scott Mission, Sleeping Children Around the World, or the Global Hunger and Development Appeal, c/o St. Philip’s Lutheran Church.