Outlook: Kwik-Fit/Ford

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The Independent Online
IF THERE'S no money to be made in manufacturing, move into services. That, in a nutshell, seems to be the strategy behind Ford's pounds 1bn acquisition of Kwik-Fit, as well as its planned takeover of the RAC, where it is a shortlisted bidder. Ford executives were yesterday waxing lyrical about "cradle to grave" service, the concept of a total motoring company which would sell you your car, service it, repair it at the roadside, maintain it in road worthy condition and presumably eventually consign it to the crusher.

The idea sounds logical enough. Most people probably spend at least the cost of a car keeping it on the road over the lifetime of the vehicle, so it may make sense for a manufacturer to tap into that after-birth market.

But there is absolutely no reason why those who shop at Kwik-Fit should be any more prone to buy a Ford than they are already. The only possible synergy between Ford as a manufacturer and Kwik-Fit as a service provider would be if Ford chose to force its own exhausts and other components through the Kwik-Fit network.

If that's the case, then the competition authorities might want to take a close look, not withstanding Ford's insistence that there are no such issues to address. Otherwise, these purchases should be seen as more of a diversification for Ford away from manufacturing, rather than a logical extension of it.