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The Competition and Markets Authority (CMA) has provisionally found that Copart’s finalized purchase of Hills Motors raised competition concerns in the provision of vehicle rescue services in the UK.
Copart and Hills Motors both provide vehicle rescue services. This involves collecting damaged used vehicles and others on behalf of customers – including insurance companies, finance companies and car rental companies – and re-marketing them for sale through online auctions or, in some cases, managing the disassembly or destruction of the vehicles. Hills Motors is active in dismantling vehicles while Copart is not.
Following further investigation, CMA has now provisionally found that allowing Copart to buy Hills Motors could substantially reduce competition in the market for the provision of rescue services in the UK.
Copart is currently the market leader by a significant distance. Hills Motors, which has in-house demolition services and is a supplier of recycled parts, is one of a small number of players in the market for rescue services that has a track record of competitive success serving large national salvage contracts for insurance. company.
CMA temporarily dismissed concerns that the merger would substantially reduce competition for the supply of other used and damaged vehicles or the supply of recycled parts in the UK.
Kirstin Baker, chair of the independent expert panel that conducted this Phase 2 investigation, said:
“Auto insurance is a significant expense for many individuals and businesses and there is an increasing demand for insurance companies to minimize their environmental impact, while keeping prices low.
“There are very few rescue companies with a track record of servicing large national contracts for insurance companies, so we are concerned that these deals could reduce choice for customers and this could lead to higher prices or lower quality of service.
“We invite views on our interim findings and the possible solutions we have identified to address our concerns.”
The CMA has issued a notice of possible remedies with a deadline for comments by May 19 and asked interested parties to submit provisional findings by May 26, 2023. The statutory deadline for the CMA’s final report is July 20, 2023.
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