Hekla abandons Bílson deal over competition concerns

Hekla, a car dealership, has abandoned its planned purchase of Bílson after an investigation by the Competition Authority indicated that the markets in which the companies operate could be defined more narrowly than previously, mbl.is reported. Bílson owner and mechanic Bjarki Harðarson said he was surprised by the decision, given that the companies have a combined 17 per cent share of the market for Volkswagen and Skoda repairs.

Hekla has a 9 per cent share and Bílson 8 per cent in the market area, which extends from the capital region west to Snæfellsnes and east across the southern coast to Höfn. Bjarki said that could hardly be considered a dominant market share and argued that the purchase would protect the interests of his customers, who own Volkswagen and Skoda vehicles.

He also said that all workshops effectively have equal access to technical information. Any workshop can carry out the same work as Bílson, apart from warranty repairs, and any company can apply to become an authorised service provider if it meets manufacturers’ requirements.

Warranty repairs are not profitable, Bjarki said, because they involve substantial costs. He would prefer not to handle them, but said they were part of the service customers expected Bílson to provide.

Bjarki described the Competition Authority’s approach as strange and said he did not understand the agency’s reasoning when companies in other sectors had been allowed to buy up competitors.

He wants to sell Bílson as he is beginning to consider retirement. He has run the company for nearly 42 years. Two of his schoolmates founded it in 1984, and Bjarki bought into the business during its first months. He bought one of them out a few months later and became Bílson’s main owner in 1986.

“I am just a mechanic who started with both hands empty, and I wonder what the point is of the Competition Authority’s efforts,” Bjarki said. “If I shut down the company, would that benefit Volkswagen and Skoda owners?”