Dear Shareholders,
2012 was not an easy year for the vehicle repairs and spare parts market. For the first time since 1990, that is, from the beginning of the economic transition in Poland, we experienced a slowdown in the market growth, maybe even a slight decline. In view of this, Inter Cars S.A., with a turnover of almost 9%, proved its distribution strategy to be right. The company’s historic decision to address its offer directly to garages has made Inter Cars S.A. the market leader in Poland. Likewise, our decision to expand to Europe’s emerging markets allowed us to generate a substantial growth even in the time of the market downturn. Thanks to the increased revenues generated by our overseas subsidiaries, our company is becoming less and less dependent on the situation on our biggest market, i.e. Poland. We expect that by 2017 the revenues generated by our foreign subsidiaries will account for 50% of our total spare parts sales. Inter Cars S.A. aims at arriving at the most comprehensive product offer possible, in other words, we want to be able to offer anything that a modern garage needs. Although our offer of vehicle spare parts is the biggest in Europe, we should continue to develop, as there are still product groups where Inter Cars S.A. can increase its assortment and its market share. Our offer includes both Premium brand products provided by original equipment suppliers, as well as cheaper parts, under the so-called economy brands. By profiling our offer this way, we are able to meet the varied expectations of the market: customers seeking top quality original spare parts have a wide range of Premium brands to chose from, constituting an attractive alternative to the usually more expensive parts offered by Authorized Repair Centres. In turn, customers seeking savings are very eager to buy cheaper spare parts of comparable quality, constituting a reasonable choice in the case of older vehicles. Such division of Inter Cars S.A.’s offer makes our company resistant – to a certain extent – to the risk of sales decreases resulting from changes in the vehicle purchasing trends and in the overall financial situation of the society. Each time drivers seek savings, the demand for more expensive parts decreases, which, however, is compensated by an increase in the demand for cheaper products. Another goal we would like to attain is the development of our logistics. Despite the huge competition, we have managed to grow, little by little, and gain a reputation of a company capable of delivering spare parts to garages nationwide faster than any other distributor. The development of our overseas subsidiaries has helped us expand to the promising markets of Central and Eastern Europe.
In order to make the most of what we have managed to build over the years, we have decided to create ILS, an independent entity capable of offering top standard logistics and warehousing services to our business partners. I believe the benefits of outsourcing of this type of service are all too obvious to anyone. But what makes ILS stand out among its competitors is its perfect knowledge of the needs of the vehicle parts market.
Our strategy for the next two years will focus on the development of the sale of goods other than those constituting our main area of activity, i.e. the sale of spare parts for passenger vehicles. We find this market segment very prospective, both at home and abroad; so far our foreign subsidiaries have sold mainly spare parts for passenger vehicles. It seems that the era of two-digit growth figures has come to an end. Although the neighbouring markets may still take us by surprise, the volume of our sales and the position we have reached in particular markets have brought us to the conclusion that we should seek further development in pursuing activities aimed at optimizing our profits. This does not mean that we are going to forgo our investment in innovations such as the e-commerce channel. We continue to be driven by the passion to be pioneers, consistent with the philosophy of our founder, Krzysztof Oleksowicz. Inter Cars S.A. was born out of passion for crossing borders and extending possibilities.
Robert Kierzek
President of the Management Board