WOJCIECH TWARÓG, Inter Cars:
Efficient logistics is the basis of a success in distribution of spare parts. For the garages, the most important thing is availability of spare parts, that means the shortest possible time between placing an order and delivering the goods to the garage. No-one can afford for a repaired car to block the stand waiting for the parts.
To WOJCIECH TWARÓG, Member of the Management Board of Inter Cars SA, talk Grzegorz Kacalski and Krzysztof Rybarski.
The birds sing that something has moved on the market. So have we finally lived till the end of crisis?
Actually, we can see a very interesting situation. The first quarter as for sales revenue was quite bad, we could still see stagnation. But the second one was just outstanding. In July sales revenue was also outstanding. It was history-high result for Inter Cars.
How can we account for such a rapid change of the market trend?
It seems that last year people postponed repairing their cars. After the winter, especially so long like this year, many drivers have finally taken decision that they need to visit a garage in order to keep their car in the right condition. This, in my opinion, might be the explanation of Spring change. I suppose that some influence on the situation also have some psychological aspects. People just got used to the word crisis. Such taming of the word “crisis” helps to recover from it.
And how does Inter Cars look in the rank? Does it continue to increase its market share?
Last year, at a zero increase of the whole market, we managed to record a 10 per cent increase. Of course our daughter companies abroad had their big part in this. But also in Poland we recorded a plus result, that means we managed to increase our market share, which is now around 22-24%. This means that we are absolute leader. I think, that real assumption is an increase of market share up to 30%.
What plans for development does the company have for the next few months?
We want even more to deal with so called monocultures, that is those segments of goods, which for many years have been dominated by small, specialised suppliers. We can list here: mufflers, batteries, tyres, lubricants. We are also entering stronger the segment of crash repairs. We have implemented a new packing system, and our product range already contains some new suppliers. We have started cooperation with Saint Gobain, and thanks to this we can also offer car glass.
How do you want to compete with those specialists?
Our advantage is our logistics. We reach practically every place in Poland several times a day. So why not to use this advantage when trading those products as well. For example, tyre garages stopped ordering goods to keep them in stores, because of very low margins on them. They do not want to invest their cash and take the risk of staying with unsold goods, and such situation happened this year to many of them. They prefer to order tyres particularly for the customer. On a national scale this leads to such situation, that when there is a season peak for tyres (because, e.g. unexpectedly winter came), immediately you need to transport around eighty thousand tyres all over Poland. I think that we are the only company, which can cope with such situation from logistic side of it.
So the winner is the one which delivers the goods the fastest?
Efficient logistics is the basis of a success in distribution of spare parts. For the garages, the most important thing is availability of spare parts, that means the shortest possible time between placing an order and delivering the goods to the garage. We could see this very clearly within last months, when the demand for garage services rocketed, and there were queues lasting several weeks in garages. In such situation no-one can afford to have a place blocked by repaired car, because it is waiting for parts, because time is money. The required part must get to the garage as soon as possible. We are ensuring this.
Well, so there are so long queues to garages, we should envy them.
We need to keep in mind that there are big seasonal fluctuations in the industry. Of course, in May and June the customers have to make a visit two weeks before. But when you visit the same garages in January or February, you will find mechanics waiting for the customers.
Because of difficult economical situation did you not notice that interest in premium brands decreased and people get more interested in cheaper products? People are trying to save money.
We did not notice this. Regarding the quality of products, the trading policy of Inter Cars does not change. We are concentrated on selling goods of well known brands from premium segment and we generally do not promote our own brands, which are just an extra part of our offer, not the core business.
Also garages associated in our garage chains use the policy of promoting parts of only top quality. Of course, if the customer insists of assembling cheaper product, we can offer him one as well.
At this point I want to add that goods in our product range always meet the quality standards and norms. The quality of those goods is constantly monitored in our laboratory. We treat this very seriously, as we are operating on such a big scale and we cannot afford to make any mistakes.
How does Motointegrator platform develop? Does it have a big influence on revenue of Inter Cars?
It is hard to measure the results of Motointegrator, because we cannot look at the operations of the platform only by the sales revenue. The main aim of Motointegrator is to direct the customer looking for parts online to a bricks and mortar garage. It is very often this way, that the customer using Motointegrator finds a garage, next he goes directly there, without making the order online, because he thinks that this way it will be cheaper.
Of course the user does not pay anything for Motointegrator services, but still many customers still prefer not to register services online. For the sales itself it has no meaning, but it influences the statistics. So the real meaning of Motointegrator is much bigger than financial results of the platform.
Mechanics very often complain that more and more customers check prices online. And those are very often much lower than prices in the garage. This is very often a source of many misunderstandings.
Yes, such behaviour is becoming more popular. The only way to deal with this situation is to resign from margin on reselling spare parts and at the same time increase the cost of service for the customer. Of course we are not able to implement such changes, they must be implemented as a free chice of garage owners. But there are examples in the world which confirm possibility of operating this way. In US the Internet caused flattening the prices of spare parts, but at the same time the cost of services increased. I suppose that in the future Polish market will also implement such solution.
Is Inter Cars not afraid of competition of Internet sellers?
Frankly speaking, this is not a competition for us. In most cases e-commerce means that the seller gathers orders from buyers, and afterwards he buys the goods and sends them to the customers. Very often e-sellers purchase those goods from us, and it is easy to trace, as we have exclusivity for many of those products. They buy from us with a large discount, add a small margin (which they can afford, as they have low operating costs) and sell the goods, spoiling the market and working against the profit of the garages. We are monitoring e-commerce and such customers very often just loose the discounts that they have.
Finally we would like to ask, what can we expect from a visit at the Inter Cars EXPO?
This year we are coming back to already checked formula of an industrial event. From the very beginning the Fair was designed to be an aftermarket celebration, where all participants of professional automotive aftermarket of spare parts and services could meet. Making it a mass event made the formula to disappear. But of course there will be many attractions awaiting our visitors. This year especially worth noticing is the first in Poland Night Motor Show, to which I would like to invite you all.
Thank you for the interview.
source: Świat Motoryzacji
Warszawa
09-13
M. / No 9
