Trucks are important for us

 

Inter Cars is a huge company dealing in sales of spare parts, and also developing product range for trucks.  In the opinion of customers it is associated with passenger cars segment.  Why?

- No wonder, as we started with selling spare parts for passenger cars.  The owner of Inter Cars have always wanted to develop the product range of truck parts, even before we became a stock exchange company. First step was taken back in 1996.  For several years this segment had been developed, but a bit "by the way" of the normal course of operation, i.e. passenger cars.  Between 2002 and 2003 we speeded up much, creating the first garages of Q-Service Truck chain.  It was an important moment, as before we sold spare parts for trucks mostly to wholesalers, and at that moment we turned to companies which are assembling the parts directly on vehicles.  This triggered a real market war and change in mentality.  We needed two years to convince the market, that we are able to supply smaller customers.  I remember that there was a totally different atmosphere in passenger division than in truck division.  The latter were much fewer so it has been more like a family atmosphere.  In 2013 I created a team of specialists dedicated for truck market.  We understood that despite having a stock of truck goods of around PLN 70m we still did not have the right stock.  Our offer was built on the basis of market leaders, what was not necessarily good for us.  Finally we understood that we have seven makes of trucks, 70 engines and 36 transmissions - our team started creating the product range in order to have everything needed to repair them all.  We stopped looking at the competition.  We built our offer thematically, i.e.: I am repairing an axle, does Inter Cars have everything that I need to do it?  Before it happened that we had some more important elements, and all the rest had to be bought from the competition. 

 

Did this work? 

 - Yes, at the beginning of 2014 we went through a small success, when people understood that Inter Cars can be treated seriously in truck segment as well.  Also a bit helpful ws the fact of changing the vehicle park connected with implementation of EURO 5 norm.  In July one of our daughter companies QST signed a contract with ZF company and became their franchise.  Thanks to this we have almost 400 customers purchasing parts for transmission from us.  All activities taken by us from 2006 mean that we have a strong basis on which we are building organic growth.  Inter Cars is one, and we look at the market this way.  We do not divide it any more into truck and passenger segment.  Although for years the core business were passenger parts.  Today the situation is changing, growth in passenger market is more and more difficult, whilst sale of spare parts for trucks in Inter Cars is systematically growing faster than the market.  Our potential is extensive distribution chain.  We have 168 branches in Poland, 60 of them specialize in truck segment. 

 

There will be a difference between truck market and passenger market, as we have 18m passenger cars and about 270k trucks of loading capacity above  16t?

 - Statistically it balances, our usage of passenger cars is similar to Western Europe.  Trucks work much more and much harder.  We decided that we will not approach our parts only from commercial point of view but also technically.  We have divided trucks into several parts or systems, and than we found out how many and what trucks drive around Poland.  This way we have created packages of parts for our Branches, because we knew that in this region there is a fleet of specific kind of trucks and in other region, of other trucks.  Our work is constant modification and development of that packages, to make them fit local market needs even better. 

 

Why?

 - Most of trucks are purpose made for the customer.  There are no two the same truck tractors made by e.g. MAN from one day of production, they are always somehow different. 

 

How can we compare the number of parts for trucks sold by authorized garages of the manufacturer and you?

- There is data available about what parts are needed for trucks of 2-, 3-, 4 years of age.  After Euro 5 there has been a change.  Their sales, in authorized garages grow.  Generally we can assume that original parts are 10-15% of total number of parts used in garages. 

 

And how big is the whole market of parts and running materials? 

 - We are counting only on the aftermarket.  So we are close to the leading position in truck segment, but we are counting trucks of loading capacity more than 7.5 ton - all the rest is added to passenger market.  That is why the turnover of truck department seems to be moderate.  In authorized garages, the parts are responsible for about half of turnover, and in the aftermarket in independent garages they constitute even 60-65%.  We are trying to make so much noise as might be necessary to show, that truck in Inter Cars is really important.  As at today, the share of sales of truck spare parts is at the level of around 10% in totoal sales.  Our aim is to reach the level of 20% and this should make us market leader in Poland. 

 

 

The market is changing.  E.g. integration in Volvo group made it more difficult for garages servicing Renault trucks to purchase the parts from different sources.  There are changes in the chain... 

 

- ... several garages are already cooperating with us.  Actually all the time there is something happening on the market, and if anyone from a garage is considering his future, we have the offer for him.  Within Q-Service Truck chain we have now 70 garages.  We want to create a Premium group of 30 out of them all.  Such garages which have nothing to be ashamed of in comparison to OE garages. 

 

Truck market is difficult? 

 

- I am fighting with this phrase.  For years I have been dealing with garages.  It was all about to know what a particular vehicle is composed of.  This knowledge about construction and operating of a vehicle is much necessary, this is the secret. 

 

You are saying that one of difficulties is lack of human resources... 

 

- Only those with suitable knowledge.  That is why we are training them ourselves for our needs today, using our trainers, and for the future, thanks to "Young HR" programme. It is a programme dedicated for schools which are educating future mechanics.  We are equipping their training rooms with the most modern, cutting edge devices and tools.  They are a bit lottery trainings, but we believe that a part of those young people will finally get to us. 

 

How big stocks do you have? 

- We have 1,600k spare parts on stock, among them around 35k for trucks.  Right now we are beginning a new stage of construction of our new Logistics Centre in Zakroczym.  A warehouse with a storage area of  40k sq. m. will be built there, and as a result we will need to reconfigure our delivery chain and distribution chain. 

 

And what about parts suppliers, is it more or less of them?

 

- In total we have about 1,000 suppliers, 150 of them from Premium class.  For trucks we have around 300 suppliers.  Most of our purchases come from Western Europe, though there are some product lines which are dominated by suppliers from Far East. 

 

Quite surprising is your expansion into foreign markets, such as Romania. 

- We are present on 12 markets now, and on some of them our growth is really high, e.g. in Romania.  The policy of the company is that first we are realizing our development plans home, and next in foreign countries, that is why truck sales programs are built by our colleagues from those countries, using our experience gained on Polish market. 

 

Thank you for the interview

Interviewer: Alexander Głuś

 

 

Source: Polski Traker

2014-12-01