Vehicle manufacturers' efforts to retain as much control as possible over the aftermarket sector are putting the independents under increasing pressure.
Take, for example, the move to reduce parts discounts to distributors. Already Ford has been lambasted by the Vehicle Builders and Repairers Association for following this path. The association says that repairers could suffer a cut of over 50% in their profits on certain jobs.
For many bodyshops, already experiencing wafer thin or non-existent margins, the option of absorbing the higher costs that are implicit in lower parts discounts does not exist. If these new discount levels stick, and if other manufacturers follow suit, a further shake-out of the bodyshop sector seems inevitable.
There may be other consequences, including a reduction in OE parts usage during the repairing process, perhaps compromising quality, and further increases in insurance premiums for vehicle owners. For manufacturers there may be a thin line to tread between creaming as much profit as possible from their aftermarket operations and gaining a reputation among consumers as an expensive marque for repairs.
After overtaking Ford last year to become the world's number two vehicle producer, Toyota is on a roll. In Europe, the company's sales target of 800,000 units a year has been achieved two years ahead of schedule. Emboldened by this success, Toyota's new objective is to shoot for 1.2m annual sales in Europe by 2010 and, based on the evidence to date, it would be foolhardy for rival manufacturers to dismiss this as pure moonshine.
Examples of Toyota's commitment to its European adventure come in various forms, the latest being an expansion of R&D, notably the recruitment of an extra 200 engineers in Belgium, bringing the total to around 350. This is viewed as essential if future models are to correspond more closely to the evolving preferences of European consumers.
Toyota has been encouraged by the ready acceptance in Europe of the Yaris, which represents the first model that the company has designed and produced specifically for the region's market. With growing assembly facilities in France and the UK, and now the move to inject a greater European dimension into future models, how soon will it be before Toyota ceases to be seen as a Japanese producer in the eyes of European car buyers, but becomes stateless in much the same way that Ford and GM are not regarded primarily as American groups?
Meanwhile, a vivid illustration of Toyota's pre-eminent position in many aspects of vehicle expertise has been provided by news that the company's hybrid technology has been licensed to Ford. Along with its compatriots Honda and Nissan, Toyota appears to have established an unassailable lead in what is widely expected to be the motor industry's next significant powertrain application.
These are depressing times for those who believe that the UK should have a strong and vibrant part of its motor industry under domestic control and ownership. Leaving aside the uncertain future of plucky MG Rover, which still clings to its ambition of remaining an independent small scale producer in a world where more and more the benefits of scale are paramount, recent weeks have been accompanied by some calamitous updates from Henlys. This is the former vehicle distributor, remember, which saw a brighter future in manufacturing and put all its eggs in the bus and coach basket.
Just five weeks after alerting investors to problems at its US operations, the company was minded to issue a statement in the second week of March to the effect that losses during the current financial year would be greater than expected. As a consequence the company's shares plummeted to their lowest level for 20 years.
How the company's shareholders must be ruing the day that management jettisoned the vehicle retailing interests. With Pendragon and Reg Vardy among the current darlings of the stockmarket, CD Bramall recently acquired for a juicy sum and the few remaining publicly quoted groups basking in high valuations in the expectation of further takeover activity, the decision to vacate vehicle retailing was, with the benefit of hindsight, a colossal blunder. The more so in view of Henlys' failure to grapple effectively with the management problems at its US subsidiary, allied to the depressed state of the bus market there.
Henlys is not alone, though. Earlier in the year, in mid-February, Mayflower issued its second profits warning in less than two months. As with Henlys, the company's bus manufacturing operations are responsible for the main damage.
Assuming that they remain in control of their own destinies, both companies will now need to determine whether they have the luxury of waiting for an upturn in bus markets and, equally importantly, whether they have the appropriate managerial, technical and financial resources in place to capitalise on future opportunities.
The long running saga of Volvo's attempted takeover of Scania, to produce a blockbusting Swedish-based truck and bus producer capable of matching the world's strongest, is deeply unsatisfactory from a number of standpoints. For a start, Volvo has good reason to feel aggrieved by having its ambition thwarted four years ago by the European Commission on competition grounds.
This barrier followed Volvo's acquisition of a substantial stake in Scania which had to be divested by April 23 at the latest in order to comply with the EC's demands.
In the event Volvo was able to sell its holding of Scania's B shares (with restricted voting rights) through a stockmarket placing but struggled, and ultimately failed, to find a buyer for the more valuable A shares. Instead, Volvo has established a new holding company, called Ainax, to which the shares will be transferred prior to their distribution to Volvo's own shareholders in mid-2004. However, this move has cost Volvo dear since its has been forced to take a writedown on the shares, leading to a restatement of the company's fourth quarter earnings which now show a loss of SKr 2.4bn (£176m) compared to a previously reported profit of SKr1.6bn (£117m).
Recent years have been unsatisfactory for Scania too, characterised by uncertainty over its future ownership. The company has been deemed a takeover target for American, European and Japanese groups. At one time a link-up with MAN seemed only a matter of weeks away, and more recently Hino made an offer which was rejected for being too low. All the while Volkswagen lurks in the background with a holding of 19% and may yet fulfil its long desired ambition to enter the heavy commercial vehicle sector, although perhaps not at the present time in view of difficulties elsewhere.
The likelihood therefore is that Scania will remain in play and hence vulnerable to an offer from another vehicle producer, despite the fact that its all-important A shares with their high voting rights will be more widely held once Volvo concludes the distribution through Ainax. On the other hand, with its strong market position and robust financial performance - and now freed from the brooding presence of Volvo - maybe Scania will be tempted to do some hunting of its own.