Interview with President of the Board, Robert Kierzek
In the period of so called transformation, many companies were established, which are now doing very differently. What in your opinion decided about the success of Inter Cars?
There is no simple answer to that question. In running a business many decisions are taken and the number of good decisions must be bigger than the number of wrong decisions. In Inter Cars the total number of good decisions was and is bigger. In case of our company it was a mixture of many factors. But the key to success, at least in the first stage, was hard work of the founder of Inter Cars - Krzysztof Oleksowicz, who had the perfect feeling of the market and luck to people. He was able to inspire others with his vision. He was also able to predict changes and did not only adapt to them, but what is even more important, created market trends. This is thanks to him, that we are the biggest company in the industry, number 1 in Poland and number 5 in Europe.
Should we understand entering foreign markets as possibility of operating in case of a crisis on Polish market?
Surely, entering foreign markets was a form of diversification of the business. At that stage we were considering how our business should develop. At that time, and it was 11 years ago, it was mostly about Czech and Slovakia. We were also helped by a coincidence. People who were willing to use the business model used in Poland by Inter Cars came to us. The Management Board took a decision that we want to go the same way with those people and this way, companies with 100% ownership of Inter Cars were established. We need to remember that a bit earlier, Inter Cars Ukraine was established, but that company developed variously and Inter Cars was a shareholder in that company. Our mutual relations were helped by the trust of people. For the business to develop, one needs to find proper people, trust them and have money when they are needed, as without investment business cannot be done.
And talking about money - did the IPO of Inter Cars bring expected benefits for the company?
Inter Cars gained a strategic investor some years before the IPO at the Warsaw Stock Exchange. After the Russian crisis in 1997-98 most of the companies from our business sector in Poland were feeling its negative influence, and so did we. We had some financial problems and we needed development capital. Because of this we took advantage of found offer, and the IPO was a natural consequence of above investment. Investor of Inter Cars realized its profits selling shares on the stock market. Thanks to being present on the Stock Exchange it was easier to merge with another stock market company - JC Auto in 2007. Operations of a company listed on a stock exchange is fundamentally transparent. This transparency regarding spending financial means is much helpful in the business. Being a company listed on a stock exchange we also are a subject to assessments. The stock market is a lens through the company is seen and thanks to which its prestige is growing.
Inter Cars sells and remanufactures spare parts, manufactures semi-trailers, sells motorbikes and commercial vehicles, renders trainings for garages. Is Inter Cars a multiple industry company?
A multiple industry company - this associates with a vary old-fashioned company to me. The origin of adding other business activities in Inter Cars was very simple. At the beginning we were offering only spare parts for passenger cars, but many of our suppliers also had goods for trucks in their product range. So we decided to introduce them in our portfolio. Later we decided to launch tuning parts. In 1997 we started creating Q-Service garage chain. With the semi-trailers it was that some man came to us with an idea of how could Inter Cars supply companies manufacturing semi-trailers. At that time there were quite a lot of them. We had parts from manufacturers, which were also used by the semi-trailer producers. After a while, looking at the portfolio of those parts we decided that manufacturing such a trailer is not so complicated, and this way Feber company was established. Similarly happened in case of remanufacturing of parts. On of our branch owners had his own remanufacturing business, which he wanted to develop. We bought the business from him and invested in it - this way Lauber was established. An in such a way, step by step, the scope of activity grew. Lately we have established a professional training department.
The business can develop only if it takes care of the environment it is operating in . It is just like with a tree, if you cut off the branches, it will not grow and will die. So we have organized a programme for the youth "Young HR", a training support for garages and we also support garages regarding environment protection and waste management. For owners of the cars we have also offered Motointegrator.pl service.
The philosophy of Inter Cars is that Customer is the most important....
Yes, and we do care for the other party to feel the same way. Many companies care only about their profit. Of course we are also interested in the profit, but also an independent garage needs to earn to develop. Everyone needs to realize that each ling of this "food chain" needs to earn money. And finally, the customer owning a car also needs to earn somewhere. Whereas one always needs to show respect to other people, and this rule we managed to implement inside and outside our company. We treat our Customers like partners, and not only payers.
The aim of the management board is a harmonious development of Inter Cars, based on market partnership and consideration for business environment in which we are operating. We wish to be a place, where the Customer can find all that he needs for running his business. It is in line with our strategy of "one stop shop", which means that in Inter Cars the Customer can find all that he needs in one place.
Big companies have problems with fast information flow and decision making. Is dividing the company into smaller ones helping to improve the information flow?
Inter Cars is currently over 170 branches in Poland and over 160 branches abroad, 12 European markets, manufacturing companies Lauber and Feber and over 6k people in the organisation. So we can say that Inter Cars is a corporation, but we are trying to behave like a family business with horizontal relations. There is no such situation that the board of directors is closed for employees. We do not behave like a typical corporation and thanks to this we, as the board of directors, have fast access to knowledge which exists on all levels. In many cases this allows us to take a decision faster, as we get to know about the problems faster. However at some level of development, there is no chance to manage the whole company on all levels. The Management Board must trust managers and this move was made much earlier by Inter Cars than by all competing companies. This empowerment has existed since the very beginning of the company. I joined in 1992, when the company was only 2 years old, and I gained trust and had access to much important information. After 2-3 years of work, many decisions depended on me and I did not have to consult all with the owner, as opposed to the situation which is in many companies even up to now. Such a company has a chance to develop. People in Inter Cars are trusted and have a freedom of operation. Of course, many of us make mistakes, but it is important to have more positive decisions. Each branch of Inter Cars is a separate company, similarly the logistics and marketing. Despite often complicated relations, such system works well also because people can feel that something depends on them. Employees are not only robots, following orders coming from "the top".
What threats for the industry can you see, people speak about falling margin, internet-based shops?
Dangers can be divided into short-term and long-term ones. Long-term is the change of attitude of a man to a car, as a synonym of mobility. For the time being, a car is still a symbol of mobility, as Internet is, via which one can communicate without leaving their house and deal with many things from home. According to American survey, teenagers in the USA do not need cars for anything now. For them, the car is a source of problems - one needs to pay for its maintenance and running. It can be substituted with public transport or be rented. In the future, the function of a car for private user will be changed, as the drive of a car. These long-term threats need to be diagnosed and solution to them needs to be found. Some threat for independent garages may be activities of car dealers, who want to keep as big market share as possible. They offer cheaper services and spare parts to owners of older cars. In the past, a new car under warranty was serviced at the dealer's garage, and later, after warranty - in an independent garage. Now, independent garages fight for new cars, at least regarding maintenance inspections and running parts. Whilst car dealers fight for older cars. Advantage of independent garages is their number, and dealers are mostly located in the main cities, so the competition will surely be hot there.
On the other hand, looking at short-term threats, Internet is rather not a one. Internet changes the market, new players appear, who try to use this tool better. Internet brought price transparency, and thanks to it the Customer can compare prices of parts or services. Internet can be helpful if one knows how to use it properly. We have launched Motointegrator.pl platform, only the market needs to get grown up to it.
Is Motointegrator a tool in this competition?
We have launched Motointegrator.pl thanks to which owner of the car communicates with a garage. By the way, a small remark: Motointegrator is not another e-shop. What is Motointegrator.pl? Independent garages must constantly fight for the customer, we want to make this fight easier. Under Motointegrator brand name, there are now 5,000 garages. Thanks to the platform, owner of the car can find a garage suitable for him, arrange a visit to repair of maintain the car, knowing beforehand how much the whole service shall cost. The customer can also order parts for the service, and we shall deliver them to a chosen garage. It is hard, in just a few words, to describe all the advantages for the garage resulting from being a part of the chain. This is an issue for another interview. We do believe, that Motointegrator will increase the prestige of independent garages, because what makes them better is the quality and timeliness of the services they offer, using spare parts from premium market segment.
We are being read by entrepreneurs, garage owners. What advice can you give them regarding development?
A simple advice is firstly to be honest, for the employees as well as for the customers, as this is crucial. I suppose that the main problem of independent garages is that they are all treated alike, the good and the bad ones. Many garages render services on a level even higher that the best OE garages, as they employ the best mechanics and have wide experience and cutting edge garage equipment. However there are also unreliable garages, which simply cheat customers. And this blame is later influencing the whole industry of independent garages - almost 20,000 companies. This is used by the dealers, who say: we are operating perfectly, whilst the independent ones are the grey economy and Mr Handy in a garage who is just looking for a chance to cheat the customer. In a variety of garages there are many different people/ There are people who want to work, and for them it is unimaginable to cheat a customer, and others who build their business on cheating as a life philosophy. But for the business to develop, one needs to earn and invest. One does not need to complain that the taxes are too high. Taxes are paid by everybody, and despite this some garages can operate well and other cannot. One needs to observe the garages which are developing, and use their methods. Investment in people is also important. One needs to send them to trainings and also to invest in modern garage equipment. A modern garage should service modern cars, as repairs of old cars cannot bring any profit, for sure.
Thank you for the interview.
Interviewer: Ryszard Polit.
Source: Auto Moto Serwis
2015-04-01