Suncorp has stared down growing criticism from motor trades associations, saying it expects further acquisitions from its joint venture in the automotive spare parts market as the business grows.

As reported by insuranceNEWS.com.au last August, the insurer has linked up with US component specialist LKQ Corporation to form ACM Parts, in a bid to tackle excessive mark-ups and delays in the spare parts chain.

ACM has already bought NSW vehicle salvage business Frank’s Parts for an undisclosed sum, and Suncorp spokesman Duncan Bone told insuranceNEWS.com.au “further acquisitions of similar businesses” would follow.

He says the joint venture is a unique approach from an insurer in the Australian market.

“We wanted to consider how we might improve the claims experience and commissioned a study to look at issues in the supply chain.

“Ultimately, it is not a very efficient supply chain. ACM hopes for more of a one-stop shop.

“In the long term it should bring the cost of premiums down and a faster resolution of claims. It should make us more competitive.”

ACM has also teamed up with US parts certifier NSF International, which will begin by testing and certifying a select group of parts common to Australian vehicle models.

This is a major step forward, Mr Bone says.

“When it comes to the parts they will be certified – you’ll know they’re quality parts. Right now that doesn’t always happen.”

He brushed off criticism that the joint venture could affect small business in the crash repair industry.

“I’m not sure too many parts dealers can be considered small businesses,” he told insuranceNEWS.com.au. “It is a market that needs further competition. We see a gap there and it will ultimately benefit the end user.

“Our organisation will have to compete just like any other.”