AUTOMOTIVE • YESTERDAY • TODAY • TOMORROW
INTERVIEW
FREE MARKET, INDEPENDENT WORKSHOPS IN EUROPE
21 KRAJÓW Z NASZYMI ODDZIAŁAMI
ALFRED FRANKE Founder of the SDCM industry association and its long-serving President, board member of FIGIEFA and CLEPA – the European organisations representing the interests of the automotive parts trade and automotive industry – and currently President of the MotoFocus Media Group, operating across multiple Central European countries. Expert, consultant, and friend of the aftermarket. His ties to the automotive world go back so far that, in motoring terms, he would long since have earned the status of a classic car, complete with vintage licence plates. He insists he only worked for a few days in his life – after that, he was simply living his automotive passion. Had it not been for that passion, he would have pursued another: spending winters as a ski instructor and summers as a carpenter and timberframe house builder.
GRZEGORZ KACALSKI Editor at Warsztatowiec.info.. He began working in the daily press while still a student, where he discovered that journalism is not merely a vocation but also a torment. He went on to spend several good years in the features department of a colour magazine. The work enriched him inwardly – and exhausted him in equal measure.
KRZYSZTOF OLEKSOWICZ Founder of Inter Cars S.A., President of the Management Board for 20 years and currently its advisor; a passionate automotive enthusiast.
A graduate of the Academy of Catholic Theology in Warsaw – a philosopher by education, a mechanic by inclination. During his studies he cultivated both interests in equal measure, He found solace among spare delving into the treatises parts. He has been covering of existential Thomist the independent automotive philosophers alongside the market for 17 years. As an workings of the internal amateur mechanic, he has a combustion engine. Before number of successful repairs embarking on his adventure of the Fiat 126p to his name. in the independent automotive market, he worked at a transport services depot, ran a roadside assistance business, and gained hands-on mechanical experience in Germany. A keen sportsman – mountaineer, veteran of numerous high-altitude expeditions, lover of highoctane fuel and adrenaline – he competed as a driver in rally events. These days, he finds meditative calm and fresh business inspiration on the golf course.
EDITION AUTHORS 2026
Alfred Franke Poland
Grzegorz Kacalski Poland
Krzysztof Oleksowicz Poland
Maciej Oleksowicz Poland
Witold Kmieciak Poland
Marius Mujdei Romania
Adrian Florea Romania
Kaspars Vilumsons Latvia
Artur Ilkevič Lithuania
Goran Smiljkic Serbia
Tomáš Reiterman Czech Republic
Alija Šošević Bosnia and Herzegovina
Harris Christides Greece
Tomasz Piluch Poland
Vihren Bogdanow Bulgaria
Petar Spiridonov Bulgaria
Sergiu Urechi Moldova
Vadim Škatov Estonia
Akos Szatmari Hungary
Vasyl Holovach Ukraine
Peter Baštič Slovenia
Mirko Rugle Croatia
Branislav Bučko Czech Republic/Slovakia
FOREWORD The independent workshop services and parts distribution market in Central and Eastern Europe is a truly remarkable phenomenon. The companies that grew out of it have built efficient, well-functioning businesses in their home markets. These enterprises – particularly in Poland – were built on the foundation of domestic capital that was, at first, extremely modest; yet they were never simply swept aside by Western competitors commanding vastly superior resources. It should also be noted that the independent automotive market did not merely grow without any state support – it grew without the knowledge of those in power, who one day discovered, to their utter astonishment, that a smoothly functioning sector of the economy had developed entirely on its own, without the assistance of ministries, government agencies, or public funds.
Although the independent automotive market forms an important chapter in the broader story of entrepreneurship, its history appears never to have been properly documented. Who knows – perhaps one day it will merit its own chapter in a serious academic work on the modern economic history of Poland or other CEE countries. Authors of such a work will certainly benefit from access to primary source material, among which the accounts of those who were not merely present at the birth of the independent market, but who actively shaped it, will play a special role. The conversations gathered here speak not only of the past, but also of the present and of what the future may hold. They are, too, a compelling story of resourcefulness, ingenuity, and hard work – qualities that were ultimately forged into success.
CONTENTS
THE 1980s: LIFE IN SHORTAGE
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YOUR FIRST TASTE OF THE AUTOMOTIVE WORLD AND A BREATH OF FREEDOM
11
THE TURNING POINT AND THE YEARS OF GENERAL PROSPERITY: THE GREAT REFORMS
30
BRANCHES AND DISTRIBUTION NETWORKS: POLAND IN THE EUROPEAN UNION
51
WORKSHOP NETWORKS
71
INTERNATIONAL EXPANSION AND BUYING GROUPS
78
THE FASHION FOR OWN-LABEL PACKAGING
83
SALES TOOLS
88
A TRIANGLE OF CONFLICTING INTERESTS
120
THE THORNY QUESTION OF SUCCESSION
123
CONSOLIDATION IN DEFENCE OF INDUSTRY INTERESTS
132
INTERVIEW WITH MACIEJ OLEKSOWICZ
158
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THE 1980s. LLIFE IN SHORTAGE After the decade of Edward Gierek and several years of prosperity fuelled by Western credit – prosperity that had already begun to unravel by the mid-1970s – the country’s economic situation deteriorated rapidly. The programme to build a „new and better homeland” had failed. Massive investments in heavy industry, construction, and agriculture had not delivered the expected results. The centrally planned economy, which took no account of free-market laws of supply and demand, had proved unworkable. The supply of basic consumer goods was faltering. Items such as washing machines and televisions were difficult to come by. At the same time, Polish society underwent accelerated motorisation, driven by the launch in 1973 of licensed production of the Fiat 126p at the Small Car Factory. Private vehicles were sold on a pre-payment basis, and their sale, servicing, and parts distribution were handled by the state trade and service network, Polmozbyt. The supply side of the automotive market functioned equally poorly. Car owners struggled to obtain basic consumable parts, which had to be „sourced” through personal connections or purchased on the parallel black market, where goods absent from the shelves of state outlets were available at „market-adjusted” – that is, substantially inflated – prices. The country entered the 1980s already mired in crisis, with shortages growing ever more acute. The authorities attempted to stabilise the situation by introducing price increases, followed by the rationing of essential goods – measures that were met with widespread public resistance. They proved ineffective regardless. A considerable proportion of goods, including fuel and spare parts, leaked from the official trade network into the unofficial market. The authorities sought to combat this through the prosecution of „speculators”, even establishing a dedicated body for the purpose – the Workers’ and Peasants’ Inspectorate. Despite heavy penalties and the public shaming of „speculation”, market shortages persisted until the very end of the Polish People’s Republic.
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Towards the end of 1988, when Mieczysław Rakowski took office as Prime Minister, the authorities attempted to liberalise the centrally planned economy. Among other measures, they introduced parallel sales of unrationed „commercial” petrol, offered at a significantly higher price than the rationed fuel. In December 1988 came a turning point: the Sejm of the Polish People’s Republic passed the Law on Economic Activity, widely known as the Wilczek Act, after its author, the then Minister of Industry. The Act opened the door to the development and establishment of small enterprises. And it was the first non-communist government of Tadeusz Mazowiecki that launched a radical systemic transformation, converting the centrally planned economy into a free-market one.
YOUR FIRST TASTE OF THE AUTOMOTIVE WORLD AND A BREATH OF FREEDOM GRZEGORZ KACALSKI: The 1980s were a time of utter, crisis-ridden misery. Flicking through the press from that era makes you realise that the scenes in Bareja’s films
Bareja comedy). Did you have any connection to the automotive world back then?
(the beloved Polish comedies of director Stanisław Bareja, iconic for their satirical portrayals of everyday absurdity under communism) weren’t just comic gags – they were situations that could genuinely happen. Take the one from Brunet wieczorową porą, where the owner of a Syrena picks up a fan belt in a butcher’s shop, handed over straight from the fridge (Brunet wieczorową porą, lit. “A Brunette Late at Night”, a 1976
graduating, I spent a few months at a state transport services depot – specifically in the engine overhaul department, which happened to align with my interests. I didn’t gain a great deal of hands-on experience there, but I did read every book on vehicle servicing that was available at the time. My particular hobby-horse was the carburettor of the Fiat 125p – I could strip it down, reassemble it, and tune it with my eyes closed.
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KRZYSZTOF OLEKSOWICZ: Just after
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12 ALFRED FRANKE: That was your introduction to socialist motoring. And when did you first have any dealings with Western cars? KO: Back in the 1970s I went to West Germany, where I found work with the owner of a Schrottplatz – a scrapyard. His name was Harald Ricken, and he dealt in vehicle dismantling, used
KO: In a sense – though I don’t think anyone yet imagined that within a few years we would have democracy and freedom, including economic freedom. I simply wanted to earn money, just as I had during holiday trips abroad, when I turned my hand
parts, and repairs. He was an outstanding mechanic, but also a superb trader – he dealt in used parts and whole cars with extraordinary flair. So it was under his wing that I earned my stripes as a mechanic, and along the way learned how a free market works. Here’s an anecdote. Harald was a remarkably striking figure – a genuine giant, built like a gladiator.
to all sorts of things. In one of those years I even took a leave of absence from university, because I had the chance to go to the United States, where among other things I washed windows at the Sears Tower in Chicago. Back then, a month’s work in the West earned you what you might make in a year in Poland. Incidentally, I used to bring cars back from abroad
As it happened, one day Jerzy Kulej – our two-time Olympic boxing champion – turned up at Harald’s yard. I remember that he was less interested in the cars than in Harald himself and his extraordinary physique. Kulej made a few jokes about it and, with the air of a connoisseur, squeezed Harald’s biceps, assuring him that within a year he could make him a heavyweight boxing champion. As we may recall, the champion himself fought in the light welterweight category, so he was no Goliath – which made the whole scene all the more amusing. AF: A charming anecdote indeed. But returning to motoring – were you already observing, even then, how the independent automotive market worked, how a free workshop operated,
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the know-how to put to use once Poland’s political system changed?
how parts distribution was organised? Were you, in other words, acquiring
WHAT ATTRACTED ME MOST WAS THE AUTOMOTIVE WORLD – RUNNING A WORKSHOP IN PARTICULAR, BECAUSE THE OWNER WAS ALLOWED TO EMPLOY PEOPLE: UP TO SIX EMPLOYEES PLUS THREE APPRENTICES, WHICH MADE YOU A GENUINE ENTREPRENEUR BY THE STANDARDS OF THE TIME Krzysztof Oleksowicz
13 and sell them in Poland. So even as a student I had a decent income. AF: Something one gets used to rather easily...
cooperated with the communist authorities – because he had contacts there. A female classmate said she’d look for work in a library. And I couldn’t see myself in either place.
KO: Quite. At the time, I still didn’t think I’d end up making a career in the automotive world. All I knew was that I wanted to run some kind of profitable
AF: Were you thinking of a trade of some kind? The authorities permitted private economic initiative only within very narrow limits. They rather resen-
business – enough to live comfortably.
ted „private operators,” but craftsmen were allowed to tinker away at things.
I remember that towards the end of my studies at the Academy of Catholic Theology, just before my master’s thesis defence, a group of us from the philosophy faculty were riding a tram along Marymoncka Street, talking about what we’d do after graduating. One classmate mentioned he might try to get a foothold at PAX – the Catholic association that
KO: True – the possibilities for running a business were very limited. You could import a second-hand injection moulding machine from the West and churn out plastic bowls or toys, or grow carnations in a greenhouse. Neither of those appealed to me either. What attracted me most was the automotive world – running a workshop
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14 in particular, because the owner was allowed to employ people: up to six employees plus three apprentices,
wholesaler – a company called Egon von Ruville. That was also where I met Klaus, a sales representative I would
which made you a genuine entrepreneur by the standards of the time.
later work with. The scene unfolded as follows: Harald was buying parts for repairs at his workshop and, half in jest, asked Klaus why he was getting such a modest discount.
Since I had an HGV licence, I also considered buying a used lorry and hauling goods – furniture, for instance. There was decent money to be made in that line of work back then. AF: So on one hand you were a private car importer, and on the other you were contemplating setting up a logistics company – but then, a little later, while you were working at Harald’s Schrottplatz, you had a sudden flash of inspiration. Do you remember how it happened? KO: The flash came in 1984, when one day Harald and I drove to a parts
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„You know, Harald, you’re simply too small a customer for a large discount,” said Klaus – which was extraordinarily funny, given that Harald, as I mentioned, was a powerful, two-metre-tall fellow. We all burst out laughing, but at that very moment a thought took root in my mind. I turned to Klaus: – Listen, Klaus – what kind of discount would you give me if I wanted to buy a larger quantity of parts to export to Poland?
15 Klaus was completely taken aback – he hadn’t expected anything like a formal enquiry. But he took it
The rates were negligible in any case, so the charge on a packet of bearing shells would have been laughably
entirely seriously and went to ask his boss what the company could offer me. The boss asked Klaus:
small. They waved me through.
– Do we actually have any customers in Poland?” – No. This would be the first, Klaus replied. – Then give him the maximum discount. And so it was that on that very day I bought new parts for the first time, with the intention of selling them. To this day I remember exactly what they were: Glyco main bearing shells for a Mercedes – the OM 615 engine, in the three most sought-after sizes. AF: Did you have any trouble bringing them into Poland? Did customs officers give you a hard time? KO: They weren’t remotely interested in my import. One officer asked casually what they were. I said bearing shells – little metal pieces for a car. And they left me alone. It would have been quite different if I’d been carrying a bag of tights or shopping from Aldi – they’d have descended on that in an instant. But for my bearing shells I didn’t pay a single penny in duty, because the customs officers couldn’t even be bothered to weigh them. At the time, private individuals paid duty by the kilogram of goods imported, regardless of whether it was bearing shells or an engine block.
I should also mention that I had a registered business in Poland – a roadside assistance service – and a stamp in my identity document showing I was employed. Without that, you simply couldn’t function normally: you’d be classified as „evading work,” which caused trouble at every encounter with the authorities, and a passport would have been entirely out of the question. So I paid some fees and taxes back home – a token amount – and even towed a few cars now and then. But above all, I could travel to Germany without any difficulty. AF: And so you became an importer and, for a time, the sole representative of Egon von Ruville in Poland. Right – you had the goods. Now you needed buyers. Did you place a small ad: – Mercedes bearing shells for sale, serious enquiries only, by post (laughs)? KO: Finding customers was the least of my worries – no small ads required. I turned up with my bearing shells at a Warsaw workshop I knew, one that specialised in Mercedes repairs, virtually as soon as I got back. I said to the owner: Listen, I’ve got a few sets of bearing shells here – such and such sizes – might you be interested? – How much?
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16 I named my price. He took the whole packet on the spot and told me to come back the next day to collect
to earn money. So I began making regular trips to Germany for parts, bringing them back to Poland and
the money. And that was my first transaction in new parts. From that moment I knew I would never again import used cars, bother with repairing them, stay up through the night to drive to a car market and wait for a buyer. There was no point struggling with all that when you could import and sell new parts into such a desperately hungry market.
selling them immediately to friendly workshops. My German colleagues at Egon von Ruville, who could see I was doing rather well, would say: – Krzysztof, why don’t you set up a company? We’d give you fifty thousand marks’ worth of goods on deferred payment.
AF: So you gave up car dealing and crossed over to the aftermarket side (laughs). Historically speaking, the roots of Inter Cars go back to the socialist era. KO: I wasn’t thinking about building a company at that point. As I said, my motivation was simple – I just wanted
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AF: It probably didn’t occur to them that in Poland you simply couldn’t just set up a company and go into business – that the monopoly on imports and exports was held by state trading agencies. KO: Right – the communist authorities had no desire for companies like that, and I dreamed of Poland being normal, like everywhere else. Being able to set up
17 a company normally, hire people normally, pay normal duties at a normal border and normal taxes.
AF: I’m a modest man – I haven’t made a great deal of it (laughs). You could say my career in the
I would have been happy, and the state would have had something to show for it too – but that normality was still a few years away.
automotive industry began in the authorised segment. It was a highly elevated position, in that it involved climbing ladders – rather unsteady ones – which demanded considerable expertise, particularly of the acrobatic variety. The objective of all this climbing was washing the lights in the factory halls during production line shutdowns (laughs).
GK: Alfred, did you also begin your adventure in the automotive world during the People’s Republic? AF: You could say so. My first brush with the automotive industry came during my student years, when – just before martial law was declared – I spent a summer in Munich. I found work there, believe it or not, at the BMW factory, in the department responsible for lighting. KO: I never knew that chapter of your biography!
KO: One might say the experience you gained there in balancing at height came in useful years later in your dealings with government ministries on behalf of SDCM (laughs). AF: It did indeed – though at the time I had no idea I would end up making a career in the automotive world.
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18 That summer job at BMW made me acutely aware of the vast gulf separating us from the West. In Munich
KO: What we took away from those times was precisely the ability to surmount obstacles – and there were
you polished light fixtures; at the FSO plant in Warsaw, the oldest layers of grime on the wooden-block floors probably dated back to the Bierut era. Even during my studies at the Warsaw University of Technology, I was already thinking about running my own business – I knew that working as an employee in a state enterprise simply wasn’t for me. I tried various things, all far removed from the automotive world. Since any kind of private activity in those days yielded considerably more than employment in a state institution, I wasn’t complaining – but I was constantly searching for my own path. Until, eventually, I stumbled upon the automotive trade and parts distribution. Demand, as you said, was so strong that even as a middleman between the newly
an enormous number of them under the Polish People’s Republic, obstacles that from today’s perspective seem utterly absurd. Take a simple example: there were two price lists – the official, government one and the unofficial, market one. Domestically produced cars actually gained in value the moment they left the factory. The market price of a vehicle diverged substantially from the official price – but you could only buy a car at the official price if you had an allocation voucher. So a Fiat 126p at a car market cost considerably more than a new one at Polmozbyt. I don’t know if you remember the story of the ferry that sank while transporting a cargo of „little Fiats.” The cars were eventually salvaged and ended up at auction, where private buyers paid more for them than the official Polmozbyt price.
emerging importers and workshops and shops, I developed my business at a fair clip – like an American travelling salesman (laughs). Until I eventually tied myself to one distributor for a good many years.
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GK: The unforgettable Stefan Kisielewski (a celebrated Polish writer, composer and political satirist, known for his razor-sharp critiques of the communist system) once observed that socialism is a system that heroically overcomes problems which simply don’t exist under any other system. Did that “heroic” overcoming of obstacles prove useful later, when building a business in a free Poland?
AF: That was one side of our automotive market. But there was another – the hard-currency side. Anyone who had dollars or deutschmarks could buy any car they liked through Pewex – not only Western makes but also the Fiat 126p and the Fiat 125p – at the market, export price, of course. Parts for Western vehicles, as well as oils, tyres and so on, could be sourced the same way. KO: The chronic shortages meant that things like batteries were run into the ground. In winter you’d bring them indoors overnight so the car would start in the morning. Those battery-carrying exercises are particularly lodged in my memory, since I happened to live on
19 the fourteenth floor and the lift in the building broke down regularly. So I had to lug the battery up the stairs. The ne-
give up salaried employment, plus a little capital to invest – because state banks in those days refused to lend
ighbours joked that it was part of my training for a Himalayan expedition.
to private ventures. Money could be obtained by earning it abroad during student trips, through small-scale cross-border trade, or by borrowing from family, if you happened to have affluent relatives. Running a business was easy in the sense that no one had any strategy, any vision, any thought of cost optimisation. Demand was so strong that everything sold, and margins were high.
AF: Another feature of the automotive landscape of the time was what were known as „locally made parts” – supplied by prywaciarze, the small private operators the authorities tolerated. So if you couldn’t get an original part for a Fiat 126p or a Golf, you took a locally made one, in the knowledge that its durability was anyone’s guess. KO: It was, in short, an era of staggering demand outstripping supply – which meant that even within the severely restricted conditions imposed by the state, you could create small enterprises and make money. All it took was a degree of courage to
AF: I remember, for instance, what an extraordinary success the so-called locally made radiator grilles for the Fiat 125p were – pressed from ordinary plastic.
Continued on p.
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INTER CARS ROMANIA
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MARIUS MUJDEI CLUSTER MANAGER: Romania, Greece, Hungary, Moldova, Albania, Italy He came to the automotive world by chance, starting out as a lawyer who was only supposed to „help with contracts.” He quickly swapped legal clauses for spare parts, however, and has been building the aftermarket with passion ever since. He laid the foundations of Inter Cars in Romania and today supports the company’s development across multiple Central European countries.
Marius Mujdei I came to the industry through a combination of circumstances. In 2002 I was hired as a legal advisor at a Bucharest company specialising in the distribution of spare parts for vehicles manufactured in Romania. The company also ran one of the largest workshops in the city. I was twenty-five at the time and had virtually no experience in the sector, so I set about learning the automotive world and the specifics of the parts range – drawing on the internet, but also on the knowledge of my colleagues in the company.
WE WERE THE FIRST IN ROMANIA TO INTRODUCE LOYALTY PROGRAMMES FOR WORKSHOP CUSTOMERS – PROGRAMMES, WHICH TODAY ARE ONE OF THE MOST IMPORTANT COMPETITIVE TOOLS IN THE MARKET
By 2007 I wanted to do more and have a genuine impact on the development of the Romanian aftermarket, particularly in the context of the opportunities that had opened up following the collapse of the then market leader, which had left a significant gap. The
The Romanian market was, and remains, a place of intense competition. In addition to local players, foreign companies were also operating there, and Romanian distributors were already using electronic catalogues. We entered the market somewhat behind the curve, as our catalogue at that time was not among the best.
opportunity came during a meeting with an Inter Cars representative, who proposed that I join the team. I accepted immediately, without even asking about the terms of employment. The company was completely unknown in the local market, but its parts range was impressive. From the outset we made it clear that we would not focus on the Dacia business, since there were already several companies offering original parts for that brand. A distinctive feature of the Romanian market was the geographical split of the vehicle fleet by region: German makes dominated in Transylvania, while French makes prevailed in Wallachia, for instance. It took several
We began our operations in Cluj-Napoca – the capital of Transylvania and the country’s second-largest city. Deliveries were made from the warehouse in Tychy, so Cluj-Napoca was well positioned for overnight delivery. For our warehouse infrastructure we used second-hand racking from Poland – old, but very solid, purchased from an OEM dealer. The transport and installation cost more than the racking itself, but we were excited to see everything moving forward. I remember that while we were installing the shelving one day, a man walked in and asked what we were doing. I told him we were putting up racking. „I can see that,” he said, „but
years for the situation to even out.
what are you planning to store here?”
I explained that we would be storing car parts, and I mentioned the company’s name. The next day, during his lunch break, he came back. He introduced himself as the branch manager of a competing company and said he would like to join us with his team. We decided to accept his offer, and today he is one of our best franchise partners. The first parts we sold went to a small nearby workshop that belonged to
The competition quickly grasped the company’s potential and responded immediately by expanding its own range. Market standards rose rapidly, and competition became fiercely intense. We were the first in Romania to introduce loyalty programmes for workshop customers – post-sale bonus agreements, for instance, which today are one of the most important competitive tools in the market. The VIP Club was also introduced by us and almost
one of our competitors’ networks. The transaction was modest in value, but for us it was enormously significant – a customer had found the parts they needed precisely at our place.
immediately copied by competitors.
Looking back, I can say that we had an enormous impact on the Romanian aftermarket. We developed our branch network in the northern part of the country very rapidly, and our growth was genuinely dynamic. Two years after opening the first branch, we launched our own warehouse near Brașov, and then began our expansion into the south and east of Romania, while simultaneously supporting Bulgaria, which was at that time a new member of the Inter Cars Group.
For Romanian workshops, parts availability is the top priority, followed by efficient logistics, then price and additional terms, and only after all of these comes after-sales support. Another characteristic feature of our aftermarket is the very high level of online ordering – in Romania this is the market standard, significantly higher than in many other countries in the region. If I were to recount all the dramatic or amusing situations we encountered, there would not be space for them all – but a few are worth sharing. We were the first country outside
Poland to launch a central warehouse operating on the Navision system. The new functionality was intended
Dawn was already breaking, we were exhausted, and morale was shaken. But we got through it. The following day,
to allow us to expand our operations across the entire country – at the time, 1,800 square metres of warehouse space was an impressive sight.
after the system bug had been fixed, we did it all again – this time without a hitch.
On the first day of testing, we asked our colleagues in Czechia how to activate the conveyor belt. The response from the IT department was brief: „We didn’t activate that module because we didn’t know your warehouse had a conveyor.” Fortunately we managed to resolve the problem quickly, but at the time it felt like a catastrophe. A rather significant „detail” had slipped through the net. The next amusing episode came two weeks after the warehouse launched. We had just signed a direct agreement with Bosch Romania, covering the distribution of batteries among other
There were also some amusing moments around trip organisation. The first time we took Romanian customers to Poland, we set off at midnight from Cluj-Napoca by coach. At Oradea, near the Hungarian border, a second group of participants joined us – and that was when the real mobile party began. Some of them already knew each other, and everyone had brought a bottle of home-made pálinka. On top of that, the coach kept stopping at shops along the way to replenish „supplies.” Eventually the drivers announced: „If we keep stopping every twenty minutes for beer and the toilet, we’re going to run out of driving hours. That’s no problem for us – we have bunks below deck – but you fifty lads are going to spend eight hours sitting in a coach in a car park.” We eventually re-
things. A lorry arrived at the warehouse loaded with batteries, and we decided to surprise the branches by preparing the shipments ourselves, overnight. We started around ten in the evening, entering orders from seven branches into the system, then began picking using scanners – eight to ten of us working. Around two in the morning we noticed that the warehouse was emptying while the system was still showing unfulfilled orders. A quick analysis revealed that after each line was picked, the system was automatically generating a duplicate order. We had to start picking all over again. You can imagine our faces – we had mountains of heavy batteries mixed up on pallets that all
ached Warsaw after twenty-one hours of travel and checked happily into the hotel.
had to be put back on the shelves...
in during difficult situations.
Looking back, I think that if I gathered together all the amusing moments from these eighteen years with Inter Cars, I could write a book. To close, I would like to say that I believe the Romanian team has been an inspiration to other teams – not only through its results, but through the practical support it has always provided without reservation. This gave rise to a network of cooperation between markets: the teams from Bulgaria, Hungary, Greece, Moldova, and Albania have supported other branches, helping new organisations and stepping
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INTER CARS ROMANIA
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ADRIAN FLOREA MARKET MANAGER An economist by training and a lifelong automotive enthusiast. He began his career in finance but ultimately found his way into the automotive parts industry – and stayed, because he believed in a vision of building something great. He has been with Inter Cars since the days when things were far from straightforward in Romania, both in terms of availability and trust. Today he sets the standards he once had to explain to customers over a first cup of coffee.
Adrian Florea I grew up in Romania in the 1990s and early 2000s, so my childhood revolved around Romanian cars. The engineering of the Dacia and the Oltcit held no mysteries for me. After the fall of communism, however, Romania was flooded with used cars from Germany. The first car I bought was a Mercedes-Benz C220 with a four-speed automatic gearbox. I put more money into repairing it than the car was worth, and ultimately sold it at a loss. But it was precisely that experience that bound me to the automotive world for good. I came to the aftermarket by chance – I became a financial director, which allowed me to combine the qualifications from my economics background with my automotive passion. To explain the specifics of the Romanian market, I have to come back to Dacia, because it is a brand that has
EVEN TODAY, THIRTYFIVE YEARS AFTER THE FULL OPENING OF THE ROMANIAN MARKET, DACIA HOLDS A DOMINANT POSITION – ACCOUNTING FOR 17.7% OF THE ENTIRE USED CAR FLEET AND NEARLY 30% OF NEW REGISTRATIONS EVERY YEAR market full of tension and uncertainty. After 2016 we entered a new phase of consolidation and leadership. We began investing in infrastructure, people, and systems. Our goal was no longer simply to grow – it was to lead.
left a deep mark on the Romanian automotive mindset. Even today, thirty-five years after the full opening of the Romanian market, Dacia holds a dominant position – accounting for 17.7% of the entire used car fleet and nearly 30% of new registrations every year. We launched at a moment that made our entry easier, because the 2008 crisis hit the economy hard. Workshops were looking for cheaper parts, efficient deliveries, and alternatives. We provided all of these – through our own-brand offering, competitive prices, and good availability. The years from 2008 to 2016 were a period of expansion. We opened branches, extended our reach, and built trust. Our mission
After seventeen years, everything has changed – both we and the market. Customers have become more demanding, more informed, and we helped educate them. It was a shared evolution. Today, Romanian workshops do not want to choose between price, availability, and technical support. All of these must come together in one coherent offer. That is what our customers expect.
was to become a significant player in a
the brand – they choose what is known
What distinguishes the Romanian market is the resilience and resourcefulness of its mechanics. Workshops are extraordinarily inventive, open to new developments, and willing to test and adapt new solutions. When selecting parts, Romanian workshops look first at
and trusted, including from the customer’s point of view. Product recognition captures the imagination and builds confidence. But equally important – perhaps even more so – is availability. A part must be available immediately; if a car is already on the lift, there is no time to wait. Purchasing decisions are therefore often made quickly, and the
some workshops simply cannot make it. Workshops that can manage their working time wisely, price their labour at a higher rate, and – above all – offer additional services to customers by making the most of their staff’s efficiency, have a better chance of remaining stable. Investment is necessary, but it should be undertaken step by step, in
priority becomes not so much „which” part, but „is it in stock right now.”
line with realistic capacity – that is the approach that delivers the best results.
The pace of technological change in the automotive sector is becoming an ever-greater challenge. Servicing modern vehicles requires not only experience, but also specialist equipment, access to technical data, and investment in software. That costs money. Add to that the shortage of people I mentioned earlier, and it is little wonder that some workshops are beginning to worry whether they will be able to keep up at all. When the oldest vehicles disappear from the market, what remain will be more advanced models – and those will require an entirely different approach.
Several amusing stories have occurred during my time in the role. The one that has stayed with me most vividly happened during the preparations for the anniversary edition of the Inter Cars EXPO in 2023. I was given the task of setting up the security fencing around the event area on the beach. The site was enormous – over a thousand metres of fencing – and the sun was beating down mercilessly. After several hours of erecting barriers we looked like a patchwork of contrasts: tanned and pale simultaneously, with the imprints of our T-shirts and sunglasses
That will be the moment at which
clearly visible on our skin (laughs).
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27 This was during the period when FSO had moved away from the earlier steel-strip grilles – very stylish, but
specialising in Western brands. The latter were few and far between. Firstly, there were relatively few such vehicles
troublesome to produce – and replaced them with components made from imported ABS plastic. Fiat 125ps fitted with these black grilles were considered more modern. Craftsmen sensed the demand for plastic replacements and produced them by fairly primitive methods. Despite the poor quality, they sold like hot cakes, as owners of older 125ps swapped their steel grilles for plastic ones. A spot of home-grown facelift, as it were.
in Poland; secondly, servicing them required a range of specialist tools that were fiendishly expensive and difficult to obtain – brought in from the West, either personally or through contacts. Then there were also some authorised service centres – by definition workshops operating to a higher standard. They had several service bays, a waiting area, and were usually well located, close to the city centre. Brands such as Volkswagen and Opel granted authorisation to such establishments.
GK: How did private car workshops manage in those days of universal shortages? KO: Workshops fell into two categories: those that repaired Polish and other Eastern Bloc makes, and those
AF: For the benefit of younger readers, it’s worth clarifying that in those days authorised service centres did not operate alongside car dealerships as they do today, for the simple reason that dealerships didn’t
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28 exist. The monopoly on car imports was held by state trading agencies such as Pewex and Baltona. KO: Nobody had heard of foreign brand dealerships yet. The socialist equivalent of a combined dealership and authorised service centre was the Polmozbyt network – where you went to collect your Fiat 126p or 125p and came back to have it repaired. The stories of buying one of those dream cars at Polmozbyt really do sound as if they were lifted straight from a Bareja film (see above). You’d try, for instance, to get to the workers privately to find out whether a particular car had rolled off the assembly line on a Monday. It was widely held that Monday Fiats were more likely to bear the hallmark of factory shoddy workmanship, since the workforce hadn’t yet recovered from the christening or name-day celebrations of the weekend.
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AF: Returning to independent workshops servicing Western cars – they typically specialised in a single brand, for the reasons already mentioned: the difficulty of assembling the necessary equipment, and of course acquiring the technical knowledge needed to repair vehicles of far more advanced construction than the socialist offerings. GK: Where, in an era when you had to hunt for a fan belt or a battery, did workshops source their spare parts? KO: As we mentioned, consumable parts for Western makes – belts, filters, spark plugs – could be bought at Pewex. More complex components, such as engine parts – bearing shells, pistons – as well as shock absorbers, were purchased through specialist foreign trade agencies.
29 You placed an order and then waited several weeks. Naturally, the cost was enormous relative to
produced locally – the „Łódź rings,” for instance, made by a certain private manufacturer, were well known.
average earnings at the time. AF: There were also workshops in those days that gave worn-out components a second life – though it has to be said it was a short one. Shock absorbers were „reconditioned” by cottage-industry methods, with the oil topped up and so on; clutch linings were replaced; there were workshops that carried out build-up welding on various engine components. Needless to say, this had little in common with today’s factory-standard reconditioning. KO: I remember one such shock absorber workshop near Teatralny Square in Warsaw. The owner would swear that his reconditioned units were actually better than new ones. Craft-made parts for Western cars were also
GK: Repairs carried out by such makeshift methods presumably didn’t last very long? KO: The quality was often variable, it’s true. Engines were overhauled using whatever methods were available: cylinders were sleeved, because oversized pistons simply weren’t to be had; new rings and bearing shells were fitted; valves were ground; and the whole thing was reassembled. An engine repaired in this way required an extremely long running-in period, and its service life was inevitably rather limited. Such repairs made economic sense under those conditions, because new parts from Western manufacturers were prohibitively expensive and hard to come by, while workshop labour, relative to the cost of parts, was absurdly cheap.
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THE TURNING POINT AND THE YEARS OF GENERAL PROSPERITY THE GREAT REFORMS The early 1990s were defined by radical economic reforms aimed at completing the transition from a centrally planned economy to a free market. These reforms passed into history as the Balcerowicz Plan. The country’s first order of business was to tackle runaway inflation, which had exceeded 600% in 1989. The budget deficit was reduced, the printing of money without backing was curtailed, capital expenditure was cut, tax reliefs were scaled back, and subsidies were drastically reduced – resulting in sharp rises in the price of coal, gas, and electricity. Interest rates on bank deposits were raised, but so too were rates on loans. Internal convertibility of the złoty was introduced, with the exchange rate set according to a so-called currency basket. In parallel, the liberalisation of economic life began. The state monopoly on foreign trade was abolished – from that point on, any willing party could engage in it. New customs tariffs were introduced. Changes were also made to the tax system, modelled on Western practice. The introduction of dollar-denominated settlements in trade with the Soviet Union caused a sharp rise in fuel prices and a collapse in exports to the countries of the former Eastern Bloc. The consequences were a fall in output, a deteriorating balance of payments, and a growing budget deficit. To boost the competitiveness of Polish exports, a sharp devaluation of the złoty was implemented. Parliament passed a law on companies with foreign participation, designed to attract foreign capital to invest in Poland. The reforms succeeded in bringing down inflation, reducing the budget deficit, and eliminating market shortages. Partial debt relief was also negotiated with foreign creditors, and the country’s foreign exchange reserves grew. A wave of bankruptcies and liquidations of state enterprises, along with reduced employment in those that survived, drove unemployment above 16%. Initially, the so-called shock therapy caused a sharp contraction in GDP: by 9.68% in 1990 and 7.02% in 1991. By 1992, however, the country had returned to a path of economic growth, which reached nearly 7% in 1995, driven in large part by the rapid rise of private enterprise. Between 1989 and 2018, Poland’s GDP grew by 826.96% – the best performance in Europe. Poland’s national income stood at 65.978 billion dollars in 1990; by 2017 it had risen to 524.5 billion dollars.
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GK: 1989 brought a turning point. Freedom of enterprise had technically been established at the
AF: We had formal economic freedom, but the market was still in its infancy. The Polmozbyt network inherited
end of 1988 under the so-called Wilczek Act, but it was only after the 1989 elections, when Tadeusz Mazowiecki became Prime Minister, that freedom truly exploded in Poland – not only political freedom, but economic freedom too. What did that mean for the market?
from the previous system was already struggling to maintain the supply of parts for just a handful of domestic car models. It was a lumbering, inert monolith, entirely ill-equipped to take on the trade in components for Western vehicles. A vast new market had opened up, waiting to be claimed by entirely new players.
KO: Above all, it meant a massive wave of used Western cars flooding into Poland. People began switching to Western makes en masse. However old and battered those cars might be, they were still better than the socialist Fiat 125ps, Fiat 126ps, Wartburgs, Ladas, and Škodas. That in turn instantly ignited extraordinary demand for parts and workshop services.
KO: In the early 1990s the imbalance between demand and supply remained enormous. Workshops couldn’t keep up with the work, and demand for spare parts and tools was growing at breakneck speed. Even with the borders now open, mechanics might wait a week for ordered parts – and when the goods arrived, they were
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32 gone in an instant, literally straight off the pallets. Looking back from today’s perspective, when we go to
the tools needed to service Western makes. So right from the start we included workshop equipment in our
great lengths to serve customers and deliver parts several times a day, it’s hard to imagine. But that is how it was. Around six in the morning a lorry would arrive with stock, and so would the first customers – quite a few of them. By the end of the same day the goods had vanished into thin air, and it was time to go for the next batch.
range. Interestingly, even in those still-modest times, workshop owners wanted the best-quality equipment from reputable manufacturers – which meant relatively expensive products.
AF: I remember that „vanishing” very well. Deliveries to our warehouse in the basement usually arrived in the afternoon. During the night we’d carry everything downstairs – seemingly for no particular reason, since from first thing in the morning customers would start carrying it all back out again, and by the end of the day the shelves looked like a butcher’s shop – or, for that matter, a state off-licence in the 1980s (laughs).
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KO: Demand was such that all you really had to do was go and fetch the goods and bring them to Poland – they sold themselves. You didn’t need to look for customers; the customers found you. It’s worth noting that contact with workshops was straightforward, since the garages specialising in Western vehicles were typically located close to the centre of Warsaw. Many of them were clustered around Rondo Daszyńskiego, for instance – where a striking office complex stands today, but which at the time was full of warehouses, scrap metal yards, and workshops. Speaking of which, it’s worth mentioning that there was also enormous demand for
GK: From that period I remember that automotive flea markets were enormously popular. Did they play any significant role in the parts trade? AF: Huge quantities of used components were sold there – often of unknown provenance – though there were also stalls selling new products. For companies that were then in the early stages of development, the flea market mattered not so much as a place to sell parts, but as a place to meet new customers, talk, and make arrangements – it functioned rather like an agora. Automotive shop owners from all over Poland would turn up. For anyone who didn’t live through it, it’s worth explaining that at the time very few people had heard of the Internet. The flea market was where you made contacts that would often develop into lasting business relationships. Distributors could also pick up intelligence on their competitors. We were all still sizing each other up. And we often learned that a new player had appeared on the market from our own customers. KO: New distributors appeared almost overnight. I remember that some were already worried that growing competition would soon put paid
33
to parts trading as a good business. But in the first half of the 1990s, the expansion of the vehicle fleet was so
GK: So to sum up – the early 1990s were a period of profound imbalance between demand and
rapid that even the growing number of players in the market couldn’t compensate for it. We still couldn’t keep up with demand. The same was true across virtually every sector.
supply. Companies were starting businesses with virtually no access to capital, and stock was turned over rapidly.
AF: I remember something from that period that would be utterly unimaginable today: catalogues were sold like popular novels – not left behind in a workshop or shop free of charge. They were highly prized items, and every workshop maintained a small library of catalogues from various companies, treating them as professional literature – a kind of technical reference compendium.
KO: After 1989, companies sprang up one after another, and with a handful of exceptions – private enterprises that had already operated during the communist era as craft workshops – no one had any capital. Everyone worked in much the same way: buy and try to sell immediately. Moving stock as fast as possible was a necessity.
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INTER CARS LATVIA
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KASPARS VILUMSONS MARKET MANAGER A veteran of the automotive parts industry. He values customer relationships, steady growth, and the ability to combine local experience with the international strength of the company. A motorsport enthusiast.
Kaspars Vilumsons I was working at a well-known and thriving Latvian parts distribution company. I might well be there to this day, had the crisis of 2008–2009 not shaken the entire market. In 2010 we opened the Inter Cars Latvia office, and I became its director. Entering the Latvian market a year after the great recession turned out to be the right moment. The cards were being reshuffled, and the industry was beginning to reorganise itself. Since the market was small and fragmented, a strong new player had a natural advantage – all the more so because the company had entered the Lithuanian market four years earlier and had experience of working in the Baltic states.
A LATVIAN WORKSHOP OWNER TAKES THEIR TIME DELIBERATING, BUT ONCE THEY HAVE MADE THEIR CHOICE, THEY STAY FOR THE LONG TERM. YOU MIGHT SAY: A LATVIAN RARELY CHANGES THEIR MIND – THEY COMMIT TO A CHOSEN PATH
We built everything from scratch, in the difficult post-crisis conditions. In terms of competition, our biggest challenge came from those who would drive to Poland themselves to collect stock and then sell it in Latvia. For the first two years, however, nobody took us entirely seriously. With time, consistent work began to bear fruit. The competition realised how strong we had become when our logistics centre in Mārupē, near Riga, opened. Initially we rented a warehouse across four floors – a significant investment by the standards of the time. Today our centre covers more than 18,000 square metres. Casting my mind back, I remember our first transaction clearly: it took place on 1 December 2010 and was rather symbolic in nature – we
If I were to identify what distinguishes the Latvian market from others in the region, I would say that Latvians are more reserved – as befits people of the North – and less readily trusting of new things. There is also a large Russian-speaking community, which is a legacy of our difficult history. Among Russian-speaking customers, decisions tend to be made faster – when something needs to be bought, it gets bought. I will admit that this helped us considerably in the early years. On the other hand, loyalty within this group can be lower. The
sold a set of windscreen wipers.
opposite is true of ethnic Latvians.
THE LATVIAN CAR MARKET HAS ALWAYS BEEN HIGHLY FRAGMENTED, AND VERY FEW PEOPLE HERE OPT FOR ITALIAN OR FRENCH VEHICLES. GERMAN AND SWEDISH MAKES ARE HEAVILY PREDOMINANT.
A Latvian workshop owner takes their time deliberating, but once they have made their choice, they stay for the long term. You might say: a Latvian rarely changes their mind – they commit to a chosen path. Russians have a saying: „Davay, makhnyom!” – roughly translated as „Let’s just do it now!” Latvians, by contrast, say: measure seven times, cut once. Each of these mentalities has its advantages and disadvantages. You need to understand them and know how to work with them when building a business. The Latvian car market has always been highly fragmented, and very few people here opt for Italian or French vehicles. German and Swedish makes are heavily predominant. Volvo, for example, enjoys enormous popularity here – far greater than in Poland. One could joke that Latvians like their cars large, luxurious... and old (laughs). Compared with other Central European countries, workshops in Latvia more frequently service older vehicles.
Over the past year the average age of cars being serviced has fallen slightly again, which may seem concerning. We still have a „window of time” in which workshops can prepare calmly for servicing more technically advanced vehicles that require specialist knowledge and tools. The story I tell my colleagues from other countries over a beer is both dramatic and comic. A lorry loaded with goods from Poland collided with a refuse truck on the Riga ring road. Fortunately nobody was seriously injured. Since our logistics centre was nearby, the decision was taken to tow the damaged vehicle there. The driver decided he would stay in the cab until the recovery truck arrived. It was summer, so we agreed. He settled himself into the cab in a rather peculiar position – with one leg bent underneath him. The next morning, during his rounds, one of
WHAT AM I PROUD OF? THE FACT THAT WE ARE THE FORTIETH LARGEST COMPANY IN THE COUNTRY – IN A RANKING THAT INCLUDES MAJOR STATE ENTERPRISES AS WELL.
our security guards decided to look into the wrecked lorry. He opened the cab door and saw a single scratched leg sticking out. He apparently nearly fainted. Fortunately, all ended well. What am I proud of? The fact that we are the fortieth largest company in the country – in a ranking that includes major state enterprises as well.
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AF: Worth noting: a few distributors from the Eastern-vehicle parts segment managed to pivot to Western-vehicle parts. Some of those companies are still doing well today. KO: Right. There are examples of successful conversions, but mainly in the commercial vehicle market. Very few managed it in the passenger car segment. There was one major company – a genuine powerhouse in domestic-vehicle parts – I remember a conference at which they announced they were entering the Western-vehicle parts market and had the resources to do it. The manoeuvre ultimately failed. Meanwhile, distributors who had previously specialised in parts for Star, Jelcz, and Kamaz trucks – commercial vehicles from
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the socialist era – managed perfectly well with Western-brand parts.
AF: One could say that while everyone’s business model was broadly similar, distinct product prof iles began to take shape. A company f rom Gdańsk, for instance, carried parts f rom Italian manufacturers, which at the time were cheaper than those f rom German f irms. So-called „Italian goods” were considered a budget option and for a period attracted considerable interest on a Polish market that was still not wealthy. I remember envying them their success – they were selling parts literally straight out of the car. They didn’t even need to carry them down to a basement like we did (laughs). KO: I didn’t have access to „Italian goods” at the time, so I traded in premium products through German distributors.
39 AF: And you were expanding your engine parts range considerably – the area you’d started with, after
French, Italian, Swedish, American, Korean, and Japanese vehicles. Our overriding stocking strategy was to have
all. Many other companies focused more on consumable parts: belts, filters, brake pads, and so on.
a full shop stocked with every part needed to carry out complete repairs. Our suppliers at the time were German distributors such as Hans Pries.
KO: There were broadly two approaches to building a parts range. One was the classic category-management approach – focusing on shock absorbers, for instance, and building a range across as many vehicle models as possible. The other system, which we adopted at Inter Cars, might be called a „complete repair” approach: building a comprehensive parts range for a given segment of the vehicle fleet. For us, that meant Mercedes and Volkswagen to start with, to which we added the other German makes. Then came
AF: The company I was associated with for many years, on the other hand, took a category-focused approach to building its range. We offered parts for virtually all vehicles, but only across a dozen or so product categories. Unlike you and a handful of other distributors, however, we sourced our goods indirectly – through a Danish company called Tridon, which was a pure packager. So we had, for example, excellent belts in a Tridon box with Gates inside (laughs).
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40 Initially that model worked extremely well, but when we started competing with companies that sourced Gates products directly from the factory, our product turned out to be too expensive, because the price had to account for the packager’s additional margin. KO: Yes – after those first „romantic” years of the 1990s, when everything sold, in any quantity, straight off the pallet, the moment finally came when you had to think seriously about how to build your range. I learned by spending long hours in workshops, finding out what they needed. Here’s an interesting detail: thirty years ago, just as today – as the latest surveys show – workshops above all wanted to buy premium products in premium manufacturers’ packaging. In the still-impoverished Polish market of the time, that might have seemed surprising. AF: MotoFocus research shows that workshops today continue to prioritise premium products, though over the more-than-thirty-year history of the independent market there was also a period when they reached for lower-priced options. One could say that today’s preference for parts from reputable manufacturers is the product of hard-won experience.
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CATALOGUES WERE SOLD LIKE POPULAR NOVELS – NOT LEFT BEHIND IN A WORKSHOP OR SHOP FREE OF CHARGE Alfred Franke
GK: What intrigues me most, as an observer, is what determined that after the period when the market absorbed goods like a sponge and everyone was doing splendidly, some companies continued to grow dynamically while others stagnated – or even began to wither. Many disappeared altogether.
KO: Because workshops now know that manufacturers who also supply the OE market deliver to the aftermarket not only the highest-quality product, but also knowledge, technical data, and training – all of which are simply indispensable when repa-
KO: Our success was determined first and foremost by the right product range – the „complete repair” approach I mentioned, covering all the components needed for a given job. If a workshop mechanic could buy a shock absorber from a distributor but not the bearing or the bump stop, he had to go looking for the remaining parts elsewhere – running between wholesalers and wasting an enormous
iring ever more complex vehicles.
amount of time, and therefore money.
41 There were certainly companies offering a wide selection at very competitive prices, but without
players who remained were those who had focused on parts trading.
the complete repair range.
KO: But we provided that well-stocked shop where the mechanic could find a split pin, a washer, a gasket – all the small essentials that individually didn’t amount to attractive products, but gathered into a complete repair kit gave us a competitive edge. It would sometimes happen that a workshop bought its shock absorber from a competitor but came to us for the rest: the bearing, the bump stop, the bump stop sleeve. Over time, they came to see it was simply more
KO: True – people kept approaching me on multiple occasions with proposals to move into computers or fuel. I refused categorically, which some people simply couldn’t understand. From the very beginning, what interested me was developing a company in an industry I knew and had a feel for. Here’s a small anecdote. In the 1990s I ran into an old university acquaintance by chance. One thing led to another, and it emerged that we were both running businesses – his funded largely by money his wife had inherited. He proudly told me he had several companies. „You know, you have to diversify. If you’re hanging on one sector and a downturn comes, you’re finished,” he said. He asked what sectors I operated in. I told him I dealt in parts. „And how many companies do you have?” he pressed. „Just the one – the parts bu-
convenient to buy everything under one roof – at Inter Cars. Worth noting: our range was put together by working mechanics – practitioners who drew on their workshop experience to put together complete repair kits.
siness,” I said. He shook his head with a pitying look at my recklessness (laughs). Those were the times when Polish businessmen were trying to grab every opportunity going and might have ten or fifteen companies at once.
AF: That was a very shrewd approach to building a parts range. Assortment policy really did form the foundation of a market development strategy. Bear in mind that in the early 1990s nobody was counting costs, because margins were so high that companies simply didn’t worry about it. That came somewhat later. Some disappeared from the market because they began diversifying into ventures outside
AF: If I were to pinpoint the moment when the parts market shifted from the simple buy-and-sell formula to the long-term building and implementation of development strategies, I would say 1993 or 1994. And already by 1992, the first automotive trade fair had been held in Poznań – a place to make a great many contacts, get a sense of what the competition was doing, and measure
the automotive world. Over time, the
your own approach against theirs.
AF: So those customers came to you – while in product categories such as brake pads, discs, shock absorbers, and exhausts, you couldn’t compete with distributors who had the full range for every make on their shelves.
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42 KO: For us the pivotal year was 1994, when manufacturers of consumable parts – clutches, for instance – opened
outpost from behind the recently lifted Iron Curtain. Their arrival in Poland began to civilise the market,
their doors to us, enabling us to add complete product lines from A to Z to our range. These were, and I want to stress this again, premium products, which had been our focus from the very beginning. With hindsight, it is clear that this contributed to our success for an additional reason: although the margin on premium products was proportionally lower than on cheaper parts, the absolute margin per unit was higher, because premium products are simply more expensive – while the cost of distributing them is the same as for cheaper alternatives.
and gave us a great deal to learn from.
AF: By the mid-1990s, Western manufacturers were taking a very keen interest in the Polish market and no longer regarded us as some exotic
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GK: Did suppliers – particularly the large manufacturers – attempt to organise the Polish market on their own terms? KO: Some had their own strategies. There were companies that carefully selected their distributors and ensured that their chosen group understood and respected the territorial boundaries set from above – as the industry put it, „from river to river.” There were suppliers who had selected distributors but imposed no territorial restrictions at all. And there were manufacturers who chose a single distributor and granted them exclusive rights.
43 AF: There were also suppliers selling in Poland through agents who conducted their own commercial policies. It would sometimes happen that these agents, chasing the biggest possible turnover, sold to anyone and everyone – leading to rather entertaining situations in which a given brand had thirteen „exclusive” importers. I remember one such agent who had managed to antagonise so many distributors – having dragged them into price wars – that as a precaution he arranged a special back door in his office, through which he could make a rapid exit should any enraged client manage to get past the secretary and storm his office with the intention of grabbing him by the lapels – or perhaps by the tie (laughs). KO: It also happened that manufacturers with two commercial brands would carve up the market by giving one
THOSE WERE THE TIMES WHEN POLISH BUSINESSMEN WERE TRYING TO GRAB EVERY OPPORTUNITY GOING Krzysztof Oleksowicz
brand to one distributor and the other to a different one. The result was that both were effectively selling the same product – just under separate labels.
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INTER CARS LITHUANIA
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ARTUR ILKEVIČ CLUSTER MANAGER: Litwa, Łotwa, Estonia He began his adventure with the automotive industry through trips to trade fairs in Poznań, collecting catalogs and negotiating discounts. Over time, he became an important Inter Cars partner. He always believed that freedom at work, including freedom from wearing suits, is a force that builds good relationships and lasting business.
Do you remember when you first encountered the aftermarket? I know it was a long time ago. That’s true, we were young, fresh after independent, with an open road ahead of us. We had lots of ambition and determination, but also very little knowledge about the automotive industry. Every day we learned something new. We weren’t af raid of difficulties or obstacles. I quickly became interested in the Polish market because Lithuania and Poland are neighbors, somewhat like “big and little brother.” Many Lithuanian companies had and have strong connections with Polish business. We too were looking for contacts, partners, and ideas precisely in Poland. We traveled, observed, copied what we considered interesting, and adapted it to our market. Were you already thinking about some closer cooperation then, or were you just probing the Polish market? Naturally, everywhere and on every occasion we left information about our company, because at that time we already had our own network of automotive parts stores in Lithuania. Every year we tried to visit automotive trade fairs in Poznań. There we gained new contacts and skills that allowed us to build our own business.
WHOLESALE PRICE LISTS STILL TOOK THE FORM OF PAPER NOTEBOOKS OR INDEED THICK BOOKS FILLED WITH CODES AND RETAIL PRICES, WITH COMPANY REPRESENTATIVES WRITING IN DISCOUNTS BY HAND Of course! Wholesale price lists still had the form of paper notebooks or even thick books with codes and retail prices. There were no electronic catalogs yet. We walked between stands, collecting these price lists. Company representatives manually wrote discounts on them – sometimes even 40–45%. One company even offered 50%! You knew how to negotiate hard! Maybe so (laughter), but honestly speaking, those discounts were never used by us and it only ended with gathering information then.
I remember those times well – everything was still analog and nobody
I have a vivid memory from those trips not directly related to automotive. I was surprised by how many trade fair visitors moved around in wheelchairs. I asked locals where such a large number of people with disabilities came from. The answer I heard was simple and painful: – It’s not that we have more of them, they just live more normally here. In your country,
had heard of online catalogs.
they don’t have such opportunities.
Unfortunately, that was a sad truth. Fortunately, after regaining independence, we are slowly but effectively recovering the values of the free world. What did the Lithuanian parts distribution market look like? Did as many companies operate there as in Poland at that time, where basically anyone who started importing parts
knew from trade fairs in Poznań. We talked about work, how things were going for him, for us, and he also gave me some advice then. Later we called each other more and more frequently, conversation topics became more and more concrete, and I also received advice on how to improve our business. Finally, we began closer cooperation, buying
could make money?
goods from the Polish company.
In the 1990s, Lithuania was very similar, though due to market size there were fewer companies than in Poland. These were still pre-consolidation times, so many players operated, everyone was selling something, demand was growing due to replacing the old post-Soviet vehicle fleet with used Western cars.
Initially, our cars picked up goods from Poland once every two weeks. Later more and more frequently. We also developed cooperation, implemented exchange systems, and accelerated purchasing processes. From today’s perspective, these might have been small steps – but they built our business. This is how Inter Cars became our partner.
And everything was going well until the memorable year 1998 finally came. A massive crisis began in Russia, which also hit Lithuania hard because post-Soviet countries were strongly connected to Russian and Belarusian markets. Business practically froze overnight. I suspect companies in Poland also felt it. There was also a downturn; companies had to start counting costs for the first time because it became harder to achieve high margins.
Do you remember any moment from that period that stuck in your memory? I remember well how with the owner of our LT company, Žeraldas Šatavičius, we went to Poland for a trade fair organized by Inter Cars, then still organized in the warehouse in Czosnów.
Same with us, just on a larger scale. Many small businesses ended, and others began merging. Our company also wanted to find some strong
There wasn’t a good road to Warsaw yet, and the border had to be crossed with considerable time allowance. Organizing the trip, finding accommodation – all of this was problematic. We left in the evening, arrived in Warsaw at eight in the morning, this time without adventures. On the roadside, at the highway exit,
partner. And then one day a Polish
we drove into bushes and there,
acquaintance called me, whom we
of course, changed into suits.
And when we arrived at the trade fair, we immediately felt uncomfortable because we were probably the only ones wearing suits. My Polish wasn’t perfect yet. And my boss’s was, to put it mildly, even weaker. So I also served as translator and guide. We sat in the front row in front of the stage and waited for the official opening of the trade fair.
Let’s say a few more words about the specifics of the Lithuanian market. What priorities guide Lithuanian workshops when choosing spare parts? Do quality, price, or other factors matter more to them?
Finally, around noon, some people began appearing on stage – all in jeans and t-shirts with the company logo. My boss asked: “Who are these guys?” And I said: “I don’t know... maybe security?” Because in our country, businessmen and their people are serious guys in suits. And here was a stage, microphone, informality – somehow it all looked strange from our perspective.
centers from other Central European countries is primarily the expectation of product availability. They want parts to be available on hand.
When I started listening to what they were saying, I understood that the Inter Cars owner and board members were on stage. When I explained this to my boss, he experienced cognitive shock (laughter). I see that those suits, or rather their absence, is a particularly vivid memory... That’s true! Because that’s when it dawned on me that I would also like to work that way, without a dress code, but having freedom in thinking and acting. I think that’s precisely what decided that I do what I do.
It seems to me that what distinguishes Lithuanian workshops among service
An understandable expectation – workshops don’t have time to wait for parts when a car is waiting on the lift... Exactly. So the shortest possible time from placing an order to delivering parts to the workshop is a key competitive advantage for distributors. Companies that can ensure wide and quickly available assortment win. Though of course quality also counts. The product should be quickly delivered and also high quality. What does the fleet of cars that come to independent workshops look like?
It was 2002, and since then our cooperation has been deepening more and more. Over more than 20 years, we’ve
Generally, the number of cars using independent workshops is slowly growing, though this is probably proportional to the change in the size of the vehicle fleet in Lithuania. However, you can see that compared to other countries in our region, independent workshops repair more
really experienced many good and
and more older cars, and their ave-
difficult moments, ups and crises.
rage age dropped again last year.
For the independent automotive market, it would probably be better if workshops repaired increasingly newer, not increasingly older cars. That’s true. On one hand, focusing on older models doesn’t require such investments in increasing competencies and modern equipment. But on the other hand, wealthier users drive more modern cars, and repairs of more technically advanced vehicles bring higher income. Therefore, workshops should be aware that it’s worth working toward acquiring this customer group, and thus investing in workshop development to offer an increasingly wide range of services, not falling behind ASO standards. What are the biggest pain points of Lithuanian workshops? IN firs place workshops have problems with personal, Workshop owners mainly report problems with access to appropriate diagnostic software, equipment, and of course technical data. In the future, probably not so distant, workshops will have to cope with repairs of increasingly technically advanced vehicles, so investments in competencies will be essential. Absolutely. One thing connects with another. But it must also be said that investing in workshop development isn’t easy due to various economic barriers. Workshops must cope
under conditions of rising costs, including energy, heating, but also employee wages. This in turn means that the need to increase workshop revenues is becoming more and more urgent. An increase in hourly rates is necessary, which should translate into opportunities for investment in company development. This is fortunately happening, but investment needs in equipment and training are so large that revenue growth is still insufficient. How do you think independent automotive workshops operating in Lithuania are perceived today? Do service owners attach importance to how their customers perceive them? And what factors, in your opinion, most strongly influence this image? Workshop image in customers’ eyes is very important for Lithuanian service centers because it’s one of the key elements allowing effective market competition. Besides, it’s a topic that regularly appears in our conversations with workshop owners. Most often they emphasize that the foundation of a good reputation is mechanic competencies and customer service quality, and these are the two things that directly influence driver trust. Although the quality of repairs themselves is also not overlooked, I get the impression that in Poland it’s more often highlighted as the main element building workshop reputation.
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49
GK: And once the market had more or less settled, you needed fresh ideas for competing effectively. KO: After building the right broad range and – crucially – ensuring availability, which already required significant capital commitment, the next element of a development strategy was introducing new sales tools. I remember what a moment of joy it was when we printed our first price list! AF: Setting prices and producing price lists was no easy task, partly because inflation was still considerable. Margins typically varied depending on whether a product was fast – or slow-moving. Though I remember one curious detail: a steering track rod end that happened to fit both the Ford Escort and the Morris Mini – physically the same part – had two different prices. If someone was buying it for the Mini, they paid considerably more than if they were ordering it for the Ford. It is also hard to imagine today that we started out without computers – orders were made out by hand, and the only electronic device in the office was a calculator. „Excel spreadsheets” were done with a ruler and a pencil, and orders were sent by fax, which frequently lost the connection.
THE NEXT ELEMENT OF A DEVELOPMENT STRATEGY WAS INTRODUCING NEW SALES TOOLS. I REMEMBER WHAT A MOMENT OF JOY IT WAS WHEN WE PRINTED OUR FIRST PRICE LIST! Krzysztof Oleksowicz
I would come back in the afternoon to collect the reply from my supplier. After the telex came the fax, which was considerably more convenient – except that printouts sometimes arrived completely black. In the early 1990s generally we had dreadful problems with telephone communications. Getting through to someone abroad was a genuine feat. There was a special number through which international calls were easier to place, but using it was prohibitively expensive.
KO: And before that – the telex. I used to go to the telecommunications office, where I had an „arrangement” with one of the operators. There was always a queue of entrepreneurs from every conceivable sector waiting to use the machine. I would give the
AF: Do you remember how you used to gather information on which part numbers were selling – the kind of data that today’s algorithms handle automatically? I recall that in those days the word „computer specialist” was more likely to con-
operator the part numbers, she would
jure up an information desk clerk
key them in and send them off, and
than a programmer (laughs).
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50 KO: My method was as simple as it was effective. I would take a catalogue – piston rings, for example – drive
GK: Would you say that any one model proved superior?
to a few friendly workshops, and the owners would put ticks next to the part numbers that interested them. If a reference got three ticks, it was in high demand. Two ticks – it could be worth stocking. A single tick meant a customer might occasionally come looking for it. And anything with no tick at all wasn’t worth bothering with.
KO: The main argument for selling through a shop rather than through your own branch is that the shop owner is a peer to the workshop owner. They share the same daily concerns – staff, the tax office, social insurance, the fire inspector, theft, and so on. They understand each other perfectly, and after work they can go for a beer together. And there is a second point: selling through wholesale partners means lower costs, since it requires no controlling function. You simply deliver the goods and make sure you get paid on time.
GK: Right – as they say, everyone did their best with what they had, with varying degrees of success, until eventually the going got tough. What turned out to be the pivotal event? KO: The dramatic change came with the Russian financial crisis of 1998. Customers from the East had been accounting for a third of Polish distributors’ turnover. And suddenly that entire post-Soviet market collapsed. Customers from Russia, Ukraine, and Belarus disappeared overnight. We found ourselves in a completely new situation. What I call the age of general prosperity was over. Cost reduction now had to become a key factor in any development strategy.
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AF: After the Russian crisis – around the turn of the millennium – came a period of intensified competition and price wars that lasted for many years. One could argue their legacy is still with us today. The era of enormous margins was over. Companies that had been able to accumulate capital earlier and invest in warehousing, stock, and IT systems were able to reap the rewards of that foresight.
AF: And the wholesaler takes responsibility for keeping the shelves stocked with the right product range. He watches his costs and tries to sell as much as possible, because that is how he builds his own business. It is an arrangement that benefits both parties. KO: Absolutely – it’s very difficult from the perspective of a head office to choose the right premises for a sales point in a location that is convenient for customers, to decide where the car park should be, think about wall colours, furniture, display layouts, and a whole host of other details.
51
BRANCHES AND DISTRIBUTION NETWORKS POLAND IN THE EUROPEAN UNION Following the political transformation of 1989, one of the foremost goals of Polish foreign policy became accession to the European communities – and, from 1993 onwards, to the European Union. In 1997 the European Council decided to open accession negotiations with five Central and Eastern European states, including Poland. The EU enlargement process was formally launched on 30 March 1998. Poland declared that it would be ready for membership by the end of 2002. After an examination of the compatibility of Polish law with EU law, substantive accession negotiations began. Thirty-seven task sub-committees were established, each responsible for drawing up Poland’s position in a particular area. The conclusion of Poland’s negotiations with the European Union came on 13 December 2002, at the EU summit in Copenhagen. The Accession Treaty was approved by the European Parliament on 9 April 2003 and adopted by the Council of the European Union on 14 April 2003. It was subsequently ratified by all member states. In Poland, the ratification process took the form of a national referendum, held on 7–8 June 2003. Nearly 80% of voters answered yes to the question of whether they consented to the accession of the Republic of Poland to the European Union. The Accession Treaty, which formed the legal basis for Poland’s accession and that of the other nine Central and Eastern European countries (as well as Cyprus and Malta), was signed on 16 April 2003 in Athens. On 1 May 2004, Poland became a full member of the European Union.
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55
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INTER CARS SERBIA
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GORAN SMILJKIC MARKET MANAGER An economist by training who tied his professional life to the automotive world twentytwo years ago. He spent over a decade working at vehicle manufacturer representatives before turning to building the independent market in Serbia. He likes to unwind from intensive work through sport – futsal in particular. As he puts it, nothing relaxes him quite like a good match.
Goran Smiljkic After completing my economics degree, I had many possible directions to consider for my career. Several fields interested me, but I couldn’t quite make up my mind about any of them. One day my then girlfriend – now my wife – encouraged me to apply for a job at a dealership for a well-known car brand. And that is how it started. I eventually landed in the aftermarket when a former colleague got in touch and told me he had applied to a foreign company that was about to enter the Serbian market. I was taken on – not because of my experience, but because of my desire for a partial change of direction. The Serbian market has historically had its own particular character, largely due to the local car manufacturing tradition at the Zastava factory in Kragujevac. Some Zastava models
IN SERBIA, CUSTOMERS TEND TO BE MORE IMPULSIVE AND TEMPERAMENTAL THAN THEIR POLISH COUNTERPARTS. THIS CAN LEAD TO PURCHASES DRIVEN BY EMOTION – MORE BY THE HEART THAN THE HEAD
enjoyed enormous popularity in the country thanks to their affordable price. Over time, however, as production came to an end, those cars virtually disappeared from the streets. It’s also worth noting that used car owners in Serbia have a clear preference for German makes and diesel engines. More recently, however, the new vehicle market has been showing a noticeable trend towards petrol engines and hybrid powertrains. When it comes to how Serbian workshops are run, day-to-day advance planning – and above all any long-term business vision – still lags behind their counterparts in Poland, for example.
Customer expectations are broadly similar to those in Poland: they want to know what they can get, when, and at what price – and they also expect the supplier to be their „best friend” in business. Stability and the image of a reliable partner are very important too: what is promised must be consistently delivered over the long term.
In Serbia, customers tend to be more impulsive and temperamental than their Polish counterparts. This can
Right at the beginning, when there were only a handful of us at head office, we had a practice: whenever
lead to purchases driven by emotion – more by the heart than the head. It sometimes works in favour of sales, but it can equally be an obstacle when trying to build a relationship based on long-term partnership.
we opened a new branch, we would go out with the sales representative to visit potential customers. We had an understanding between us: we would not enter the conversation – we would simply observe how the representative conducted the meeting. Afterwards we would analyse what had gone well and what needed improving. The amusing part was that customers took us for new „field” staff, and would then say to our representative: „Listen, that colleague who was with you – I don’t think he knows much about parts. Tell him this probably isn’t for him, he won’t make a living at it” (laughs).
AT THE VERY MOMENT WHEN NOBODY IN SERBIA YET KNEW US AND WE NEEDED TO BUILD BRAND AWARENESS, EVERYONE SHUT THEIR DOORS .
There was one particularly difficult moment early in our operations that I will never forget. We opened our first branch in January 2020. By March of that same year the COVID-19 pandemic had broken out. At the very moment when nobody in Serbia yet knew us and we needed to build brand awareness, everyone shut their doors. Workshops didn’t want to let anyone in for fear of the virus. That was when we had a moment of real doubt, wondering whether we had what it would take to realise the idea that was driving us. But we held on.
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55 AF: Building a network based on wholesale partners meant accepting a lower margin, since it had
KO: Stock replenished itself automatically. But our range wasn’t perfect yet – it didn’t cover every possible
to be shared – but also lower costs, since there was no need to maintain branches. Loyalty from a wholesale partner was another matter entirely, however. Besides, such a shop could not have survived without putting together complete repair kits, which it could only put together by sourcing from several different distributors. The franchise model adopted by Inter Cars, on the other hand, combines the advantages of working with an independent entity with the loyalty ensured by a closely integrated franchise partner running a branch.
repair kit. So franchisees were allowed to source the missing parts from other importers – what we called running their own “side business.” The branch’s job was simple: put together a complete kit for the workshop, even if that meant sourcing some items from the devil himself, let alone from our competitors. Keeping workshops happy mattered more than blind loyalty to us as the franchisor.
GK: Could an Inter Cars branch take stock from other distributors if the head office happened not to carry a particular item?
AF: I should mention that we too had a branch episode. As early as 1992 we opened a branch in Katowice, near the Spodek arena, managed directly from head office. It developed very poorly, however – generating considerable costs while delivering minimal turnover – and we eventually
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56 closed it without regret. We then moved to a model of cooperation with independent wholesale partners, which was also what our main supplier recommended. KO: The failure of direct sales to workshops stemmed f rom the fact that you didn’t have the complete repair range – that full shop stocked with all the small components needed for a repair. Assembling a complete kit was something a shop could do, given that it had several different suppliers and good relationships with workshops. AF: I remember that many respected foreign experts in the industry maintained that building your own branches made no sense whatsoever, and that cooperation with wholesalers was the only rational and economically sound approach – because it required far less capital commitment, with investment costs shared between the distributor and its wholesale partners. At a time when companies didn’t have an abundance of f ree capital, that was particularly signif icant.
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AF: And yet you didn’t choose that model. You wanted to go your own way. KO: I wanted to build a system that was more efficient in terms of stock flow. I also saw the drawback of the model based on independent wholesalers that you mentioned – the risk of partner disloyalty, since wholesale partners are entirely free to buy from whichever importers they choose. The franchise system allowed us to avoid that. A franchisee is completely relieved of any need to think about stock – that is our domain as the franchisor. What they must handle independently are premises, staffing, building relationships with workshops, and managing costs – everything a wholesale partner does. Like a wholesale partner, they are close to the workshop and find it easy to establish common ground with its owner. GK: Given the success of your franchise network model, one might have expected everyone to follow the same path.
KO: Van Heck, the industry guru, said as much. His view was that the only model that made sense was cooperation with wholesale partners, because the owner of such a shop is a small entrepreneur in direct contact with another small entrepreneur – the workshop owner – and they can build a genuine peer relationship. As I mentioned, I
KO: A franchise network could only be built by a company that held a leading market position and had a wide enough range that branches would rarely, if ever, need to draw on other importers to assemble complete repair kits. Also worth noting that the franchise branch network is a Polish invention – no foreign company has adopted this model in its own market. We, on the other hand, have successfully exported the
didn’t dispute this reasoning.
franchise system. Inter Cars builds
57 its own branches abroad through its subsidiaries in exactly this way.
KO: Quite so. I have never claimed that our strategy has a monopoly on success. But observing the development
GK: Why has no foreign distributor copied the idea?
of our market, I am inclined to conclude that consistency is what matters above all. If you sell through wholesalers, you cannot then serve workshops directly, because that means competing with your own wholesale partners. If you opt for franchise networks, you don’t simultaneously set up centrally managed branches alongside them.
KO: There is a sensitive point in the franchise concept. A situation can arise in which a franchisee earns more than the chief executive, which is often psychologically difficult for the latter to accept. The franchise system can therefore only be implemented effectively where the board is owner-managed – which in the West is now largely a thing of the past. With us, many franchisees earn more than members of the management board. AF: It should also be said that there are distributors operating successfully in the market who work exclusively with their own branches, selling parts purely in a B2B model and forgoing retail sales entirely.
GK: A distribution company from the Tri-City region, which was once near the top of the market but no longer exists, ran both centrally managed branches and franchise branches at the same time. KO: It started with a network of what the industry colloquially called „state branches” – its own sales points managed from head office. But seeing how rapidly our franchise branches
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58 were expanding, it began opening franchises alongside its own branches – and on top of that, in pursuit
in Warsaw. Initially he wasn’t at all convinced by the idea. He said: „Business is going well for me – why
of the largest possible market share, it also cooperated with independent wholesalers. This led to internal tensions and conflicts. In a „mixed” arrangement of this kind, the centrally managed branches are favoured by head office staff, which puts the different branches in competition with one another on unequal terms. While there were only a few such points, spread far apart, this wasn’t a serious problem. But as the network grew, so did the issue. There were too many mushrooms floating in that broth.
would I change anything?” And I said: „Krzysiek, first of all, you’ll free up the capital you currently have tied up on your shelves, because from now on the entire warehouse will be financed by Inter Cars, and stock will replenish itself automatically. You won’t need to worry about what you’re running short of or where to find the money to expand your range – we’ll provide the whole system. Your turnover will grow, and you’ll sleep soundly at night.” And Krzysiek decided it was worth getting on board.
AF: If I remember correctly, though, your first branch wasn’t actually a franchise?
AF: I’m not surprised Krzysiek wasn’t immediately „convinced” (laughs). I knew him from when I was just starting out in the automotive world, and he was already an old hand. I think it may have been a negotiating tactic on his part. I remember our very first
KO: Technically it was a directly owned branch, but it was created to fulfil a different function. The branch on Waryńskiego Street specialised in parts for French and Italian vehicles, while the main branch on Powsińska handled German makes. So it wasn’t a classic branch in the conventional sense. Our franchise branches came later, built on the foundations of existing shops – and sometimes even small importers. GK: What persuaded those businesses to tie themselves to Inter Cars and trade full independence for a cooperative arrangement?
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meeting, when I was establishing a trading relationship with him. Once he had pushed me hard in the price negotiations and secured genuinely good terms, it turned out that was only the beginning. He then proposed that for every additional 2% discount, he would bring us a new major customer. He got what he wanted – and we gained five significant new clients.
KO: It all came down to the good relationships we had with our partners. I can give you a concrete example – my conversation with Krzysiek
KO: True, the initial conversations were tougher, but prospective franchisees fairly quickly came to see for themselves that the system worked, because shops that became branches recorded enormous growth in turnover, which streng-
Pietrzak, who became our franchisee
thened their position in their local
59 markets. Within two or three years, a branch could multiply its turnover tenfold compared with what it had
what was convenient – stopping at one on the way to work and the other on the way home, for instance. In the
achieved as an independent shop.
early days we had a rule that there would be only one Inter Cars branch in any given city. Later, in the 2000s, our franchisees began opening additional points, and branch groups emerged, sometimes comprising several dozen locations. This reduced costs, streamlined logistics, and improved the efficiency of sales representatives, who could be given responsibility for particular product categories – something that proved especially effective once we moved into the commercial vehicle parts segment.
AF: I think there was one further factor that made former independent shops want to become branches. Their owners could see that branches of other distributors were opening nearby. They felt threatened and wanted to take shelter under the wing of a strong partner. They simply had to choose which one they were prepared to build their future with. KO: Inter Cars was the largest distributor, with the widest range and the best availability. That determined the franchisee’s position in the local market. Our support allowed them to outcompete their rivals in the region – which for a private entrepreneur is the decisive factor. GK: Can Inter Cars branches compete with one another? KO: Yes, but they must observe certain rules. Offering lower prices or longer payment terms is not permitted. A branch cannot give a customer an extra discount simply to win the sale. AF: What happened when a new branch opened and a customer who had always shopped at the existing one wanted to buy wherever was more convenient?
GK: Was the path of building the branch network entirely smooth, or were there sharp stones along the way that you occasionally trod on? I appreciate that in business, talent needs to be accompanied by a fair amount of luck – but I find it hard to believe that even for a company as well organised as Inter Cars, everything went without a hitch. KO: Of course there were misfires, and with some franchisees we had to part ways. AF: Looking back, would you have done anything differently in creating the franchise model?
KO: They simply bought wherever suited them. It was quite common for customers to alternate between one branch and another, depending on
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INTER CARS CZECH REPUBLIC
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TOMÁŠ REITERMAN MARKET MANAGER It was chance that brought him into the automotive world straight after school, with no prior industry experience. He quickly found his feet in the world of spare parts and grew alongside the company’s Czech operation. Over the years he has built the company’s position in a demanding market already occupied by Škoda and established local players, contending with fierce competition and suspicion towards a „new player from Poland.” A calm strategist who values good logistics, hard data, and solid customer relationships.
Tomáš Reiterman After finishing school I was browsing
In the early days, one of the main argu-
the job market and came across a vacancy for a junior product manager. I had zero experience, but I decided to apply. They got back to me, I went for an interview, and to my surprise I was offered the role – and so began my long adventure in this industry.
ments used by the competition against us was simply that we were a company from Poland. I believe this argument stemmed from a fear that we would disrupt a comfortable equilibrium by offering higher discounts and lower prices, destabilising the established order in the aftermarket. That never happened. At the same time, attracting experienced industry people – both for us and for our franchise partners – was a major challenge. Many of them were reluctant to join a newcomer. All the more gratifying, then, to see that situation changing today.
The greatest challenge was breaking old habits and building a strong branch network from scratch in the relatively small Czech market, which was already divided among the largest European players and well-established local competitors.
ONE OF THE KEY DECISIONS THAT CONTRIBUTED TO THE STABILITY AND SUCCESS OF OUR NETWORK WAS TEMPORARILY KEEPING SOME BRANCHES IN THE CZECH REPUBLIC UNDER DIRECT CENTRAL MANAGEMENT
One of the key decisions that contributed to the stability and success of our network was temporarily keeping some branches in the Czech Republic under direct central management. As everyone knows, the franchise model is part of Inter Cars’ DNA and brings many benefits. I believe, however, that building the network exclusively through partners would not have been realistic. The goal is not only to open branches, but to ensure their long-term stability – particularly in regions where getting started is more difficult. I therefore regard this step as important, with a view to ultimately handing those branches over to partners. The second important decision was opening a mini-hub in Prague, and subsequently in Lipník nad Bečvou. These moves helped us address weak points, shorten delivery times, improve logistics and service quality, and prepare for future growth.
With a touch of irony, I can say that we were better prepared for the difficult moment of the pandemic than our
Today’s customer has a very clear idea of product prices and a practically unlimited choice. They can
competitors – because we had already been through several internal crises. In 2019, for example, the fire suppression system in our warehouse in Nupaky was accidentally triggered, flooding the entire product gallery. In an instant we lost access to 100,000 lines and a critical logistics hub. Thanks to the dedication of all our staff and a robust infrastructure, however, we implemented an effective solution and customers barely noticed any disruption.
pick and choose from the offers of many competitors providing similar services – which means competitive advantages must be sought in service quality, logistics efficiency, and so on. We are increasingly focusing on specific segments, such as tyre service centres and agricultural customers. These businesses operate differently from typical passenger car workshops, and we need to adapt to them accordingly. A characteristic feature of the Czech market is that Škoda parts were the first and most important benchmark for customers when assessing our range, pricing, and service quality. Škoda continues to dominate the Czech market, though its share is gradually declining.
IN 2019, THE FIRE SUPPRESSION SYSTEM IN OUR WAREHOUSE IN NUPAKY WAS ACCIDENTALLY TRIGGERED, FLOODING THE ENTIRE PRODUCT GALLERY. IN AN INSTANT WE LOST ACCESS TO 100,000 LINES AND A CRITICAL LOGISTICS HUB
If I were to identify a particular trait of Czech workshops, I would point out that compared with neighbouring markets – Poland and Slovakia – our service centres are considerably more reluctant to raise their labour rates. Plans to increase rates are less common here, and almost a third of workshops are not anticipating any changes in this area in the near future. This naturally feeds through into the question of wage growth, where we also observe greater caution than in neighbouring countries. Workshops are fully aware of the need to invest in development, but in the current climate that represents a significant challenge for them.
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65 KO: Certain details, certainly. The model was built around the principle of „pass it on” – meaning that the franchisee was a beneficiary with guaranteed returns. But they should also have had an obligation to reinvest a portion of their profits and share them with their employees. Unfortunately that was never clearly stipulated, and with hindsight it seems it should have been. I am firmly of the view that employees should be treated as partners, because they are the ones who build the business. GK: Moving away from the topic of branches – I wanted to ask about a particular quirk of our Polish automotive market. Some years ago someone explained to me that in the well-ordered Western markets, each distributor has one leading supplier in each product category, so companies divide up the manufacturers between them and everyone trades peacefully. In Poland, by contrast, there is complete chaos in this respect – everyone has the same products as everyone else, which produces ferociously intense competition and drives down margins. KO: This came about because when the Polish parts distribution market was first taking shape, availability from our suppliers was patchy. Sometimes something was in stock; other times it wasn’t. The fact of the matter was that we, as Polish distributors, were initially regarded as second – or even third-tier customers. German manufacturers had built long-standing relationships with their
domestic customers, and German distributors, compared with Polish ones, were Gulliver to our Lilliputians. As a result, they stood ahead of us in the supply queue and received their orders first. Essentially, circumstances forced us to work with multiple suppliers of the same products. That way, if parts from one manufacturer were unavailable, we could offer the workshop a component from another. It meant better availability – though on the other hand it made our work considerably more complicated. GK: On the subject of challenges – today, success in the parts distribution market depends on having the right sales tools, including IT systems. Companies have large IT departments and sophisticated software; and yet they started out, as Alfred described, with an „analogue Excel” made with a pencil and a ruler. What did the early days of computerisation look like? AF: At the beginning we had a one-man IT department in the form of Mr Jacek, who handled our systems and essentially customised a purchased sales management package to such a degree that it became almost a bespoke product designed specifically for us. Progress in IT meant that almost every day we would write down a list of modifications that needed urgent attention and hand them to Mr Jacek, who would implement them as best he could.
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HERZEGOVINA AND
INTER CARS BOSNIA
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ALIJA ŠOŠEVIĆ MARKET MANAGER He started out as a student doing part-time work at Peugeot, and today manages Inter Cars’ operations in Bosnia. He came to the company through a recruitment process – and thanks to his wife, who encouraged him to respond to an anonymous job advertisement. In his work he combines an engineer’s passion with an athlete’s energy. He believes that business is a team game with high stakes.
Alija Šošević After 2010, following the recession triggered by the 2008 crisis, the company I was working for at the time began to run into difficulties. On my wife’s initiative, I approached a local recruitment agency in response to an anonymous advertisement that did not name the company. After a series of tests and three face-to-face interviews, I was offered the role – and so my adventure with Inter Cars began. At the automotive trade fair in Zaprešić in 2016, I met a large number of the company’s customers and colleagues from Croatia and Bulgaria. Talking with them, I came to understand that this was a large and successful company whose greatest strength lies in its people and the relationships between them.
A COLLEAGUE IN THE PURCHASING DEPARTMENT CONFUSED THE CURRENCIES AND ENTERED PRICES IN BOSNIAN MARKS INSTEAD OF EUROS – HICH MADE THE FILTERS HALF THE PRICE THEY SHOULD HAVE BEEN, AND SALES TOOK OFF IMMEDIATELY
What excited me most was that I was not walking into an already established business – I would have to
was approved. I shook hands with the members of the management board, and we launched the project. A great deal of work awaited me: ICBA as a
build it myself. In 2016 I came to Warsaw with a ready business plan, which
company did not yet exist – it had to be registered, the first employees
hired (today they form the management team), a suitable office found for the start, the first franchise partner identified, a location for the first branch secured, and so on.
us apart from local competitors and defined the direction of development. Without false modesty, I can say that the standard of service in the Bosnian aftermarket rose significantly with our arrival.
Although Bosnia and Herzegovina was part of Yugoslavia and even had
The early days were not easy and we stumbled more than once. I remember an epi-
its own Zastava factory, we also had a Volkswagen plant in Sarajevo that produced the Golf 2, and before the war had already begun turning out the first Golf 3s. After the war, it was Volkswagen that came to dominate our roads. As recently as five years ago, German makes accounted for more than 70% of the market. And to this day, the Golf 2 remains among the five most frequently registered car models in the country. Most workshops could not wait for the changes we brought as an international distributor. Solutions such as eCAT, training programmes, VIP schemes, investment in equipment, and a pre-
sode that happened when we began working directly with Mann Hummel. A colleague in the purchasing department confused the currencies and entered prices in Bosnian marks instead of euros – which made the filters half the price they should have been, and sales took off immediately. As soon as we spotted the mistake, we corrected the prices at once and personally visited customers across the country to explain the situation. Customers laughed it off and agreed to the correction. It was precisely that honest, human approach that proved key – it strengthened our relationships. To this day, whenever we meet those customers, we look
mium brand offering immediately set
back on that story with a smile.
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69 The early forays into computerisation were entirely improvised and makeshift. Just how low the general
Mr Ryszard sat at his computer and sat and sat, and over time he seemed to be shrinking, fading, and disappe-
awareness of what computers actually were is illustrated by this anecdote: one of our warehouse workers solemnly announced one day that he had decided to leave. When asked what he would be doing, he replied that he had found a job as an „informatyk” – a computer specialist. We were dumbfounded. But he quickly clarified that in his new office building he would be sitting at the entrance, directing people to the right floor (laughs). KO: He had indeed changed career and embarked on a journey into information technology. We also started with a single IT person – Mr Ryszard, who initially did bits and pieces for us on a part-time basis. But as the workload grew steadily, he became increasingly busy, and eventually devoted himself exclusively to Inter Cars. The
aring. Eventually we realised that if, God forbid, something were to happen to him – if aliens abducted him, or he followed Pan Wołodyjowski into a monastery (a reference to the heroic knight of Henryk Sienkiewicz’s Trilogy, who retires to a Camaldolese monastery after the death of his beloved), or set off for Tibet – we would be finished. That was when we began building a proper IT department. But casting my mind back to the entirely pre-digital era, I can mention a pricing system I invented that relied on nothing more than a calculator. The boxes of parts were marked with prices in deutschmarks, but these were suitably encoded – inserted among meaningless control digits. You would pick up a box, look at the enigmatic string of numbers that meant nothing to an outsider,
work kept expanding well beyond the hours of a single full-time post.
and convert the price from marks to złoty at the current exchange rate.
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70 Simple enough in itself, but customers were impressed, assuming I had memorised the entire price list
were those where the vehicle manufacturer’s part number had been ground off. Suppliers removed these
(laughs). Later, once we had computers, you simply keyed in the part number and checked the price.
markings before releasing parts to the aftermarket, because they were bound by agreements with the vehicle manufacturers. Customers knew that parts with ground-off numbers were OE-specification components.
AF: While most distributors had their warehouses packed with dense rows of shelving, your company introduced self-service sales. Customers went around with trolleys as if in a supermarket and helped themselves to the stock. The whole industry envied you that format. KO: At that point ready-made catalogues were not yet widely available, so the shop owners who came to us for stock had to know their way around extremely well. They were genuine experts. It looked rather like resourceful housewives selecting vegetables at a market. Self-service sped up sales enormously. Later, once we were working with part numbers, we introduced orders placed by fax. AF: But that also implies a great deal of trust in the customers. They really did need to have an enormous amount of practical knowledge. I remember that a customer would pick up any silentblock and immediately know which car it fitted. One of our clients, a specialist in exhausts, could identify products by shape alone. He would walk into the warehouse and, without consulting a catalogue, point straight to the items he needed. Walking around the warehouse without a catalogue, he could „fill” an entire delivery van.
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AF: And buyers were also firmly convinced of the superiority of certain premium brands over others. Some would only take parts from company A; others insisted that company B was better. Nothing would shift their opinion. By and large, though, the greatest demand was for parts from German suppliers. The cult of German quality was equally apparent among customers from the East. GK: Knowing human nature, I imagine there were also those who wanted no part of any of this – in keeping with the traditional Polish reluctance to organise and cooperate?
KO: I don’t know if you remember, but
AF: Of course there were those who grumbled: what’s in it for them, what good will it do them – to which they would answer themselves that it would do them no good whatsoever – that nobody was going to tell them how to run their workshop, and so on. Many of those sceptics later changed their minds when they saw that those who had joined the network were reaping tangible benefits. Today, the networks operating under the patronage of distributors and parts manufacturers have around three
the parts that were most in demand
thousand workshops as members.
71
WORKSHOP NETWORKS GK: In the second half of the 1990s,
targeting the member workshops
distributors began establishing workshop networks, aimed at locking in their best customers while also supporting them in various ways. Who first hit upon the idea?
and trying to lure them away with discounts. This coincided with the onset of the price wars I mentioned earlier, which intensified over time.
KO: The idea came to us from Germany, where all the major distributors had their own service networks. Our suppliers also promoted the concept of „points of fixing” – ensuring that distributors had guaranteed access to repair points. In 1996 we launched the Q-Service network. The „Q” stands for „quality” – not to be confused with „quick.” From the outset we focused on workshops offering a full service, capable of carrying out the most complex repairs as well as air conditioning, tyres, and so on. No sooner had we launched Q-Service than our competitors reacted with exceptional aggression, immediately
AF: We too, shortly after you, began building our own workshop network under the name Partner Serwis – „Trusted Service” – with each member workshop receiving a special stamp of approval. It brought together the best workshops: those whose owners understood the need to develop, invest, and broaden the range of services on offer. One could say that the workshops that joined were those with the strongest potential and the keenest awareness of the competitive pressure that was beginning to make itself felt in the market.
Continued on p.
77
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INTER CARS GREECE
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HARRIS CHRISTIDES MARKET MANAGER His adventure began in 2016 – in a hotel lobby, since there was no office yet – with no experience in the automotive sector, in the depths of the Greek crisis. He came for a conversation about finance and left with an idea for building a company from scratch. Instead of numbers, he placed his bet on relationships; instead of cool analysis, on Greek passion.
Harris Christides I remember my first meeting with
who had been present for many
my Polish colleagues vividly – it was at the end of July 2016, a very difficult period for the Greek economy. The country was deep in recession. Building a company under such conditions was extremely hard. The prevailing sentiment in the market was that foreign companies came only for profit, offering no added value to the local environment. Our effort to demonstrate that we were a Greek team employing more than 3,000 people across Greece proved sufficient to win the market’s confidence.
years and were deeply embedded in workshops – which made our task extremely demanding. Furthermore, we share borders with non-EU countries, which creates a strong parallel market that exerts significant pressure on ours – and remains a major challenge to this day.
The Greek market has its particular characteristics. Our vehicle fleet consists of approximately 50% Asian makes, which generates significant demand for parts for those brands. Secondly, the spare parts market was built by the largest car dealers,
In our culture, emotion plays an enormous role, and business cooperation is strongly bound up with personal relationships – relationships often cemented at weddings, christenings, and the like. As an international company, we had to offer the same level of trust through results and financial facts. That was extraordinarily difficult, since we were starting from zero, and two years later COVID arrived. That period was absolutely critical, because it was then that our
partners saw we were fighters and loyal allies – capable of standing together to survive as one team. One can imagine that local competitors were cutting prices sharply, and the local market was putting even more pressure on prices to fall. Maintaining profitable margins for our partners was and continues to be very challenging. I have a habit of drawing a lesson from every situation. I remember an amusing moment when one of our customers asked us to reduce the number of product options on our purchasing platform – because they couldn’t make up their mind which to choose. A second, more dramatic memory involves the struggle to break into the lubricants market in Thessaloniki, where one distributor was undercutting on oils by delivering directly to workshops from a van.
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IN GREECE, DUE TO HIGH SEISMIC ACTIVITY, THERE ARE VIRTUALLY NO STANDARD WAREHOUSE STRUCTURES – BUILDINGS ARE CONCRETE AND MULTI-STOREY. THIS FORCED US TO OPERATE ON THE OUTSKIRTS OF CITIES, WHILE OUR COMPETITORS WERE ALREADY RIGHT NEXT TO THE WORKSHOPS
77
GK: Staying close to the workshop theme – when did logistics begin to play a role in building
number, for instance. The next step was dynamic storage, where every item had its own address in the wa-
competitive advantage?
rehouse and brands were no longer grouped together on the same shelf.
KO: First of all, it is worth remembering that the term has two meanings. There is external logistics – delivering goods to the customer – and internal logistics: ensuring the warehouse is properly stocked and that goods are stored in an orderly way so that any item can be found quickly on the shelf. We developed internal logistics from the very beginning. At Powsińska – our very first warehouse – we made use of literally every square metre, including the boiler room, outside of the heating season. Initially the warehouse worker simply remembered where each part had been put. Then we moved to arranging products by manufacturer – shock absorbers by
AF: Our warehouse was so cramped that it was difficult to squeeze between the shelves. The warehouse staff made use of every scrap of space, even the walls on the staircase, where brake repair kits hung on hooks. If I remember correctly, at Powsińska you also had containers – the kind used in maritime shipping. KO: You remember well. When we were completely out of space, surplus stock was kept in containers, which protected the goods from the elements and could be securely locked. They also had the advantage of requiring no planning permission,
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78 since they weren’t permanently fixed to the ground – rather like Drzymała’s wagon in Prussian-occupied Poland
in a travelling wagon to circumvent the law). Fortunately, we didn’t have to move them every day as Drzy-
(Michał Drzymała was a early-20th-century Polish farmer who, denied permission to build a house by Prussian authorities, famously lived
mała did (laughs). The containers kept us going through a period of very rapid growth in turnover.
INTERNATIONAL EXPANSION AND BUYING GROUPS GK: When discussing the history of the Polish aftermarket, one question is hard to avoid: how is it that Western distributors made no headway here despite their attempts, while our own companies are doing rather well in foreign markets?
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KO: Polish distributors are performing excellently. Inter Cars, for instance, is today the market leader not only in Lithuania, Latvia, and Estonia, but also in Greece. We are also making increasingly confident inroads into the German market – which once seemed to have its cards dealt long ago.
79 AF: The failure of Western distributors in Poland stems from the fact that initially the Polish market seemed too small to them – not attractive enough to be worth the effort. Then, by the time it had grown sufficiently to be worth pursuing, the competition was already far too fierce. KO: There were attempts to enter the Polish market, but they came to nothing. There were also a few acquisitions, and those too went nowhere – the potential was squandered. Meanwhile, the largest Polish distribution companies now generate more than half their turnover in foreign markets. In the West, people are rubbing their eyes in disbelief. We have the range, we have the availability, we know how to operate. We stopped being local companies a long time ago. And if Polish distributors are moving into Western markets with such ease, it means those markets’ incumbents lost their flexibility and competitive edge long ago – and we are nibbling at them from all sides. AF: Polish companies are highly innovative and invest in the most advanced IT systems, whereas Western distributors have stayed with older, established solutions – solutions that are being developed and upgraded, certainly, but are nonetheless already outdated. One could say that foreign competitors have been left behind in the twentieth century in this respect.
Our Western counterparts, meanwhile, work away contentedly, confident they are the biggest and always will be. GK: Why is it specifically Polish companies that perform so well in Western markets, rather than distributors from other former Eastern Bloc countries? AF: Poland quickly became a relatively large market, which gave our companies room to grow and develop the scale of operations needed to enter foreign markets. At the same time, Polish distributors learned to operate on significantly lower margins than companies not only in the West, but even in neighbouring Czechia. KO: The diversity of the vehicle fleet in Poland also meant that Polish companies became highly efficient logistically and built extraordinarily wide parts ranges. And as Alfred rightly noted – the largest distributor from the Czech, Hungarian, or Slovak market is a minnow compared with the largest distributor from the Polish market. Polish companies have also grown large enough to negotiate better purchase prices directly with manufacturers. GK: But the German, French, and Italian markets are larger than Poland’s. In theory, those companies should have even greater capabilities.
KO: Competing fiercely with one another in the Polish market keeps us constantly refining things and
KO: The edge we have comes from the boldness of Polish managers, their ingenuity, and their ability to overcome obstacles – what one might simply call entrepreneurship. When we enter
searching for more efficient solutions.
those settled, stable markets – where
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80 companies are run by professional managers because the venerable founding families have long since retreated to the portraits adorning the boardrooms – armed with our ability to improvise and make fast decisions, we dribble between those rigid incumbents like Diego Maradona.
WHEN THE WORKSHOP NETWORKS WERE BEING SET UP, THERE AF: Polish companies learned to react WAS A PROPOSAL with lightning speed in conditions of FOR WORKSHOPS TO rapid market growth, where someISSUE CUSTOMERS thing constantly had to change, new WITH PAPER SERVICE things had to be implemented at BOOKLETS RECORDING every turn, new product lines had to be introduced. In those established THE HISTORY OF markets, everything is orderly and REPAIRS, AS AUTHORISED settled. A manager comes to work SERVICE CENTRES and does what he did the day before. DO. TODAY BOTH FRANCHISED DEALERS KO: I am watching an interesting situation unfold in the Austrian market, AND THE INDEPENDENT where a number of trading companies AFTERMARKET OFFER operate – sourcing their goods prima- DIGITAL SERVICE rily from Poland – and are extraordinaRECORDS rily flexible, bold, and innovative. They are run by forty-somethings with CenAlfred Franke tral and Eastern European roots. These companies currently have turnovers of a few million euros, but they are effectively gnawing away at the three largest distributors, who are slumbering so comfortably in their routines and procedures that they haven’t even noticed. These small, agile players remind me of us at the time of the political transformation. It is a fascinating confrontation between management skills acquired at university and those acquired in the school of life.
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GK: What role did Polish distributors’ membership of buying groups play?
81 KO: Inter Cars was the first, joining ATR – and it happened quite spontaneously. I was at a dinner organised
KO: There are tangible financial benefits, of course. But beyond that, we began to be much closer to
by one of the manufacturers at the Frankfurt trade fair. Earlier that same day I had been talking to Robert Lang, a Hungarian distributor, who had been telling me about buying groups, including ATR, of which he himself was a member – it was where he had the most suppliers in common. My own analysis suggested that ATR would also be the best option for Inter Cars. And as luck would have it, during that dinner I was seated next to an ATR manager, with whom I fell into a fascinating conversation. The following day, the agreement was done.
what was happening across Europe. Western companies initially treated us with a certain condescension, but we succeeded in building very close relationships with Central European companies, with whom we exchanged experiences. I met most frequently with colleagues from Hungary and Czechia. I remember that on one occasion, at a meeting, we were sitting together – the „Visegrád group,” as it were – at one table, which our German colleagues commented on with a remark that was half joking, half barbed: „drei Kameraden aus dem Warschauer Pakt” (“three comrades from the Warsaw Pact”) – alluding to the title of Erich Maria Remarque’s
GK: What are the benefits of belonging to such a group?
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82 novel (published in English as “Three Comrades”). Membership of ATR also allowed us to build closer relation-
been servicing Fiat 126ps and Polonezs would broaden their capability to cover Western vehicles, but would maintain
ships with suppliers at a more senior level. When they visited Poland, it was their representatives who came; at ATR meetings, it was their bosses.
their relationships with their existing distributors. And so three competitors managed to reach an agreement and merge – which in Poland is something of a phenomenon. Hats off to them.
AF: Then Auto Distribution International entered Poland. They spent a long time sizing things up and held talks with many companies, before eventually reaching an agreement with distributors f rom the Eastern-vehicle parts segment – which came as quite a surprise to many. ADI was a great help to them in making that transformation.
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KO: There was a logic to it. Workshops that had previously serviced socialist-era vehicles had to adapt to Western cars in order to survive – investing in tools, hiring qualified mechanics or retraining their existing ones. The
AF: There were many more consolidations among distributors. One of the more recent ones that made a strong impression on me was the joining of forces between two distributors f rom Olsztyn. For years they had competed fiercely with one another, until suddenly they decided to build a shared warehouse and merge the logistics of their two companies. All the major buying groups are now present in Poland – Temot, Nexus, Groupauto, Global One. They pursue varied policies: some select only a single partner in each country, while
reasoning went: workshops that had
others affiliate multiple companies.
83 KO: Another major change in the way orders were processed was the introduction of the online catalogue
From that point on, sales staff were assigned specific customers, and regardless of how those customers placed
and electronic ordering. I remember visiting a workshop I knew and noticing that the owner was searching for parts online – but then placing his order by phone, reading out the part numbers to a salesperson. I was puzzled as to why he was making life so difficult for himself when he had a perfectly convenient tool at his disposal and could simply click to add items to his basket. He said: „Yes, clicking is easy enough – but when I phone the order through, the lads get a bonus for it.”
their orders, the sales figures formed the basis for calculating staff bonuses.
That was when I realised there was a flaw in the system that needed fixing.
I also remember that as early as the 1990s our electronic catalogues became popular across the eastern border. The so-called „logisticians” – those who conducted trade in those countries – would install the catalogue for their customers, who would select what they wanted. Orders would then flow back to the logisticians, who would consolidate them, place the order with us, and transport the goods across the border. A good online catalogue is absolutely fundamental to success in our industry.
THE FASHION FOR OWN-LABEL PACKAGING GK: Another trend observed in the 2000s was distributors creating their own brands. It seemed as though everyone was packaging products into their own boxes. KO: Companies began looking around the world for products that could be bought cheaply, packaged under their own label, and brought together in a single catalogue. There were three approaches. The first was to give the own brand the same name as the distribution company; the second was to create an own brand under a different name, but one that encompassed a
wide range of product lines. Both of these have the advantage of simplifying marketing efforts. Then there was a third approach – the one we chose – which was to create multiple brands, each covering a different product category. The drawback of this policy is the marketing challenge: your effort has to be spread across several brands. The advantage, however, is that it limits the damage from any quality failure.
Continued on p.
87
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INTER CARS POLAND
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TOMASZ PILUCH CLUSTER MANAGER: Ukraine, Germany, Belgium, UK He came to the independent automotive market from a job advertisement and has spent three decades in the industry. He values fast decision-making, and regards the free expression of individual opinions not as a disruptive ferment but as an opportunity to draw sound conclusions that can be turned into good ideas. At Inter Cars he is responsible, among other things, for international expansion, successfully challenging stereotypes about Polish companies in Central and Western European markets.
Tomasz Piluch I came to the independent auto-
once a week for several months until,
motive market entirely by chance. One day I saw an advertisement in a newspaper and decided to go along to the interview just to see what one looked like. Two days later I received a job offer – and that was how I became an employee in the sales department, selling car parts.
in a surge of determination, I called his mobile. I introduced myself, and it turned out Krzysztof remembered me from the Poznań trade fairs. I explained why I was calling, and Krzysztof said we should meet straight away.
After three months, once I had mastered the catalogues, I began to grow restless. Then the phone rang with another job offer – also in automotive, but on the OE side. I immediately thought it was time for a change, because if I stayed behind a shop counter I would die of boredom. And literally that same day, my manager at the time offered me a promotion and a more ambitious role. I accepted, stayed at the company – and spent the next thirty years in the aftermarket. I came to Inter Cars after the leadership of my previous employer changed, and the direction things were heading didn’t match my vision of how business should be done. I realised it was time to move on. I thought about joining the market leader. I had met Krzysztof before and had his business card, so I decided to make contact. The card had his mobile number on it, but I felt it was more appropriate to call a landline. It turned out those were numbers for the secretariat. Each time, a pleasant lady would inform me that Krzysztof was no longer in the office, hadn’t arrived yet, or was in a meeting. I tried
Half an hour later I was sitting in his office, and by the end of that same day I was an Inter Cars employee. I must admit I was struck by the speed at which he made decisions.
AT INTER CARS, NOT ONLY ARE YOU ALLOWED TO HAVE YOUR OWN OPINION — IT GENUINELY MATTERS TO OTHERS
A little later I noticed another quality that defines the character of the company. It turned out that not only could you have your own opinion – it was genuinely listened to. Time has shown that a Polish company operating in such an unconventional way proved more resilient than many a Western counterpart. That said, since taking on Inter Cars’ westward expansion, I sometimes encounter scepticism towards a company of Polish origin – from new customers and institutional staff alike. Overcoming that stereotype with customers is relatively straightforward, because it happens naturally as time passes. With institutional staff, the matter is more complicated. As a result, opening a bank account can sometimes take several months. I remember an occasion at one bank where an employee kept postponing the meeting at which I was to sign the account-opening documents. When I asked about the delay, he brushed off my questions, saying they weren’t ready yet. Eventually the meeting took place, and the official behaved strangely throughout. He kept a piece of paper face down on the table in front of him and kept casting suspicious glances at me.
SINCE TAKING ON INTER CARS’ WESTWARD EXPANSION, I SOMETIMES ENCOUNTER SCEPTICISM TOWARDS A COMPANY OF POLISH ORIGIN – FROM NEW CUSTOMERS AND INSTITUTIONAL STAFF ALIKE
After a lengthy conversation, he suddenly said he had a question for me. He lifted the paper and abruptly asked who was in the photograph. It was a photo of Krzysztof. Puzzled, I said it was Inter Cars’ principal shareholder, Krzysztof Oleksowicz – whose name
registration documents. The official was very disappointed that his two-month investigation had proved pointless. Evidently a company from Poland in the automotive sector conjured up something suspicious in his mind. When he understood that the principal shareholder in the documents and the figure in the photograph were one and the same person, he was crestfallen. The documents
naturally appeared on the company’s
were signed in the end, however.
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87 If something goes wrong, the fallout is confined to that one brand name rather than affec-
KO: You do have to strike the right balance between price and quality. And it’s true that we never went overboard
ting an entire broad portfolio operating under a single label.
with marketing our own brands. Bear in mind that marketing expenditure pushes up the price of the product. If a product sold under an own brand is positioned as a budget item, it has to stay cheap – in which case the best marketing is the low price itself. Above all, though, Inter Cars never advertised its own brands because we always regarded them as a supplement to our core offering – budget-tier parts of acceptable quality. Our focus is on premium products, and it is premium products that we encourage workshops to buy. Our argument runs like this: when you buy a premium product, you are also buying your future – the know-how, the training,
GK: I may not be the most observant person, but it seems to me that Inter Cars’ own brands were never particularly heavily promoted. AF: Private labels are also a great temptation for distributors – one that needs to be resisted. As Krzysztof said, you can „buy cheaply,” but there’s a limit to how far you can take that, because a price that looks attractive on the way in can quickly turn into a significant cost for the business.
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88 the technical support that comes with it. And that is indispensable, because vehicles are changing and growing
not particularly well received by the manufacturers supplying premium products. Many parts manufacturers
ever more complex. The second argument in favour of premium products is one I have already made: even though the percentage margin is lower, the absolute margin per unit is higher.
are uncomfortable with distributors building their offering around private labels – and perhaps they have a point. That said, when a private label serves purely as a supplement to the range, it is quite a reasonable solution.
AF: Selling under your own brand carries additional costs. The company has to pack the product itself, produce catalogues, and so on – and those costs inevitably eat into the margin. There is also another consideration that matters from a commercial policy standpoint. Promoting your own brands is, for obvious reasons,
KO: There is an interesting footnote to this. When we entered the German market with online sales, we assumed that online customers would be looking for the cheapest option, which might drive demand for our own-brand products. In fact, what sells there is premium product.
SALES TOOLS
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GK: Let us turn for a moment to sales tools and how they evolved
introduced a 2% discount for customers who ordered that way, and on
over all those years. Historically, the first tool was the printed price list. What came next?
top of that we delivered the goods to them as well. That might have seemed like economic nonsense, but there was method in the madness.
KO: Price lists published in the 1990s were out of date barely days after going to print. Firstly, the range was expanding at lightning speed; secondly, high inflation meant prices had to be revised constantly. One partial solution was to quote prices in deutschmarks. The way companies communicated with customers also evolved. Initially, customers came in person to collect their goods – which was when our open-warehouse system worked well, with customers selecting products themselves.
It was a way of encouraging customers from outside Warsaw to buy everything from us. If they had come in person, they would have visited competitors along the way and bought some of their stock elsewhere. On balance, it was more profitable for us to deliver the ordered goods and throw in a discount. There was another advantage too: fax orders could be prepared at a convenient time, when we weren’t serving customers on site – in the evenings, for instance – which made
When the era of fax orders arrived, we
operations considerably more efficient.
89 AF: We had one particular customer I tried, with little success, to persuade not to come in person to collect
It was our attempt to give them the most accurate stock information possible. Today, a well-designed online
stock. Sure enough, on each visit he would make a round of various other companies, buying goods from them along the way, and on the drive back to Lublin he would drop off deliveries to his own customers in almost every town he passed through. The idea of giving a customer a discount simply for staying at home – that one never occurred to us.
catalogue is truly the foundation of everything, and critically important alongside it is proper cross-referencing of parts from all manufacturers, together with thorough product descriptions, so that customers have no difficulty selecting the right part.
AF: Computerisation transformed sales beyond recognition. By the mid-1990s our customers couldn’t yet place orders online, but they could check stock levels. Unfortunately, at that point changes were not yet recorded in real time – there was a lag of several hours. Every four hours we would upload an updated stock report to the server for customers to access.
KO: It’s fair to say that all the leading Polish distributors now have very well-designed catalogues, which goes hand in hand with an ever-wider parts range and better availability. AF: For certain product categories, having a photograph of the component clearly matters a great deal. I understand that most of the data in distributors’ catalogues comes from parts manufacturers – packaging dimensions, product weight, and
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90 so on. That information is critical for efficient logistics. But what about photographs? I know you have a dedicated photography studio. Do you produce everything yourselves? KO: Some images come from manufacturers – an increasing proportion, in fact. For certain components we still shoot them ourselves. Providing dimensions is equally important – outside and inside diameter, and so on. Cross-referencing part numbers is also part of catalogue management – when, for instance, we have the same reference supplied by several different manufacturers. AF: In the old days, the final check was to hold the old part up against the drawing in the catalogue to see whether the shape matched. Today that’s somewhat harder, since the drawings are on a computer screen – though brake pads can still be held up against a monitor (laughs). What do you do when you have, say, brake pads for a particular vehicle model from several different suppliers? They are broadly the same shape, though they often differ in minor details. Does each of those products have its own separate image in the catalogue?
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KO: Every part number – that is, every product from a specific supplier – has its own photograph in the catalogue. So against the entry „brake pad for vehicle X from manufacturer Y,” there is a photo of that specific pad. If there are five suppliers, the catalogue contains photographs of five pads for the same application. The principle of the catalogue is to provide the maximum
WHEN WE ENTERED THE GERMAN MARKET WITH ONLINE SALES, WE ASSUMED THAT ONLINE CUSTOMERS WOULD BE LOOKING FOR THE CHEAPEST OPTION, WHICH MIGHT DRIVE DEMAND FOR OUR OWN-BRAND PRODUCTS. IN FACT, WHAT SELLS THERE IS PREMIUM PRODUCT Krzysztof Oleksowicz
amount of information to help with correct part selection. In this context, a careful analysis of returns is also extremely valuable, because it allows all that information to be refined. Of course, returns very often arise simply because a customer orders two parts without yet knowing which will fit, and returns the one that wasn’t needed. AF: Because the mechanic doesn’t always know exactly what vehicle will come in – with which braking system, for instance, since a given model might have been fitted with different systems at different points during production.
91 KO: Or the mechanic hears a knocking sound but doesn’t know whether it’s the track rod end, the stabiliser bar, or perhaps the wishbone pin. As a precaution, he orders everything, intending to return what he doesn’t use. AF: Which increases the logistics costs – though sometimes there’s no alternative. KO: Exactly. All distributors try to limit returns, because economically they are killing us. Dispatching goods is relatively inexpensive, but when a return has to be processed – the box opened, the item checked, re-entered into stock – the total cost of the operation becomes enormous. Unfortunately, some customers treat distributors as a lending library.
SALES STAFF ARE ASSIGNED SPECIFIC CUSTOMERS, AND REGARDLESS OF HOW THOSE CUSTOMERS PLACE THEIR ORDERS, THE SALES FIGURES FORM THE BASIS FOR CALCULATING STAFF BONUSES Krzysztof Oleksowicz
AF: Everyone complains about this, but no one has yet managed to bring it sufficiently under control. The competition is simply too fierce, and no one is willing to take decisive action. KO: Sadly not. We have to admit that we are losing the battle against returns – there are still far too many. Suffice it to say that returns from online sales in the German market are half what they are in Poland from workshops, which certainly have far greater competence in selecting the right parts.
towards these changes. Some accepted that there was no fighting it and that you simply had to adapt. Others grumbled in the spirit of: things were fine the way they were, so who needed all this...
GK: On the subject of online sales – how is that channel developing? I remember some interesting discussions about the future of e-commerce that were taking place a few years ago. Predictions
KO: Looking around Europe, we can see that in some markets this form of selling is beginning to dominate. In Bulgaria, for instance, 80% of parts are now sold online. In Poland we have not yet reached 50% – at least in the passenger car segment. For small workshops, the standard approach is still to phone in an order along the lines of: „I’ve got such and
varied considerably, as did attitudes
such a car – can you sort me out the
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92 parts?” One could of course imagine a customer registering their vehicle in a system and selecting the relevant
and that is simply how communication works there. Those customers never had the chance to form old-school
part from a list – those brake pads, say, from several suppliers – which would replace the phone call. In the commercial vehicle segment, orders are still placed primarily by phone, with barely a quarter going through online. In that segment, a salesperson is still needed to help identify the right part, and that will probably remain the case for some time.
habits in their dealings with your staff.
AF: I suspect that in your case the difference between Poland and Bulgaria comes down to established habits. Workshop owners are often used to dealing with sales reps they may have known for years and are on friendly terms with. Whereas in markets where you had no prior presence, you entered from the outset with new tools,
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KO: To settle that question properly, one would probably need in-depth research in sociology and social psychology – but my instinct tells me you’re right. AF: I’m sorry you conceded so quickly – I’ve missed my chance to commission some research for my company (laughs). GK: The widespread adoption of the internet as a sales channel probably also intensifies competition further and compresses prices, since customers can compare who is selling what, and at what price, within seconds.
93 KO: It does sharpen price competition, of course – but price is not the only dimension of competitiveness. The breadth of the range, availability, logistics, and support tools all matter too, without which price alone is meaningless. You obviously have to offer goods at market prices, but it is perfectly possible to sell at a price slightly above the market average. Personally, I believe the Polish market is the most competitive in Europe, and the clearest evidence of that is how well Polish distributors are performing in the German market. I estimate that the combined revenues of all Polish companies in Germany could reach the order of several hundred million euros this year. AF: In the context of the support that distribution companies provide to workshops, it is worth mentioning financing schemes for equipment – leasing, for instance. An equally interesting initiative is assistance with the purchase of courtesy cars for workshop customers. KO: That too – but of fundamental importance are training programmes that ensure the flow of technical information to workshops. We recognised the need for this a long time ago, which is why we created our Show Car. I remember the discussions around that idea. Some argued there was no point in all that staging – that you could just as easily run training sessions in hired rooms in schools. Why travel around like a touring theatre company? Yet it turned out that the mobile training room towed by an American semi-truck was – and
IN THE OLD DAYS, THE FINAL CHECK WAS TO HOLD THE OLD PART UP AGAINST THE DRAWING IN THE CATALOGUE TO SEE WHETHER THE SHAPE MATCHED Alfred Franke
continues to be – a bull’s-eye. The Show Car generates tremendous enthusiasm among workshop owners. GK: While we’re on the subject – I’ve always been curious about this – where did you get hold of such an exotic vehicle? It looks as though it ought to be ferrying Willie Nelson’s stage around, or some other Nashville star. KO: It does make you want to break into „On the Road Again” from behind the wheel (laughs). It’s a genuine rarity, rarely seen on European roads – and a vehicle with an interesting history. It was confiscated from a smuggler, then sat rotting in the open air for two years on a customs authority car park, broken down and rusting, until it was finally put up for sale.
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94 And we took pity on it. I should immediately clarify that it didn’t look then as it does now. It cost relatively little, but
AF: I know that suppliers placed great value on those training sessions, because they had the chance
it needed a thorough overhaul, and in the process it was smartened up into what is now a roving advertisement for American popular culture. It was given the nickname „The Beauty.”
to talk directly with workshop owners – their end customers. It gave them priceless, f irst-hand feedback straight f rom the market. Suppliers had a similar opportunity for direct conversation with end customers at trade fairs – and on a quite unprecedented scale. Many distributors had been organising their own fairs for years, and now we even have an increasing number of local events – though the biggest are those organised by yourselves and by Moto-Prof il.
AF: The idea clearly hit the mark – imitators appeared, and today you have several of these magnificent trucks. KO: Yes, they caused a sensation not only in Poland but abroad as well. The Show Car concept was simple: the truck would travel from branch to branch and set up what we called our „circus.” It should be added that the training room on wheels is not only visually striking but also genuinely comfortable. It unfolds, inflates, and suddenly there is a great deal of space inside – with all the necessary equipment, including large screens. AF: And who performed on this stage worthy of Dolly Parton? (laughs)
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KO: We invited our suppliers to collaborate, and they sent their training specialists. Throughout the week the Show Car was parked at a location, training sessions were held daily across a range of topics, including sessions using a demonstration vehicle. And on Saturday, to round things off, there was an event where workshop owners could have something to eat, a beer, and a chat in a more relaxed atmosphere. A large tent housed a display of workshop equipment, all of which could be purchased at a promotional price – with later delivery, of course, since the exhibits had to move on.
KO: The fairs were conceived above all as a celebration of the automotive world, put on for workshop employees. I will say immediately – in case anyone wants to think I am boasting about my own genius – that the idea was borrowed from our ATR colleagues. German distribution companies had been organising their own Hausmesse before us. We picked up the concept, but modified it to fit our conditions. GK: In what way did the Polish version differ from the tried-andtested German fair formula? KO: They held their fairs in conference facilities, while we took ours outdoors, into large marquees where we could provide not only exhibition space but also room for a variety of attractions, shows, and competitions for participants. You could spar with a boxing champion, arm-wrestle with stars of the sport, and so on.
95
GK: What stays in my mind is a performance staged by one distinguished parts manufacturer – a body-painting display featuring a model of truly statuesque beauty. Dressed only in a workshop jumpsuit consisting of the company’s logo painted on her body by an artist, she paraded through the fair, causing considerable excitement among the audience... KO: Our fairs were never short of sporting and artistic attractions – something for everyone, as the saying goes (laughs). AF: In the early days you held the fairs in your warehouse in Czosnów. The first ones took place around the time of its opening, if I remember correctly. KO: That’s right. After a few years, though, we decided we needed a grander stage and moved to the airfield at Bemowo in Warsaw. The centrepiece there was the Motor Show – extraordinary machines, superb motorsport drivers demonstrating their skills on a track, motorcycle acrobatics, and various other feats that frequently seemed to defy the laws of physics. There was also the Jet Car – a vehicle that was a complete affront to common sense, powered by a jet engine. The driver – or rather the pilot, as he ought to have been called – of this insane contraption would announce each run with a series of tremendous roars, whereupon the fair audience would make its way en masse to the runway to watch the monster reach some utterly absurd speed in a matter of seconds before braking at the far
RETURNS FROM ONLINE SALES IN THE GERMAN MARKET ARE HALF WHAT THEY ARE IN POLAND FROM WORKSHOPS, WHICH CERTAINLY HAVE FAR GREATER COMPETENCE IN SELECTING THE RIGHT PARTS Krzysztof Oleksowicz
end with a parachute, like a fighter jet. The motorcyclists riding inside a steel cage were equally breathtaking – there were moments when you felt quite faint watching those manoeuvres. AF: We are unlikely to see attractions like that again any time soon, because the trade fair format is changing and decentralising. Instead of one large event, many smaller ones with local reach are being organised. Last year, driving up towards the Masurian Lakes, I spotted billboards near Pułtusk advertising an automotive trade fair organised by one of the local companies. I immediately hit the brakes and pulled in to see what it looked like.
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INTER CARS BULGARIA
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VIHREN BOGDANOW CLUSTER MANAGER: Bulgaria, Bosnia and Herzegovina, Croatia, Serbia, Slovenia He came to the automotive world through his interests – he was fascinated by transport as far back as secondary school. He initially considered railways, then aviation, until he settled on cars. He presents his ideas with energy and never runs short of them, but as he himself emphasises – he has also learned to listen.
Vihren Bogdanov I came to the automotive world through my interests. At secondary school I became fascinated by various types of vehicles – military machinery, aircraft, cars, and trains. That led me to study transport technology. At the start of my final year of university I began working for a local oil importer. Over time I became a manager at a Bulgarian parts distribution company, and while searching for new sources of supply I met Marius Mujdei, who was then running IC Romania. After our first meeting in 2010, Marius invited me to the trade fair in Warsaw, and that was how my adventure with Inter Cars began. What convinced me to get involved was that the company has no universal business manual and leaves its local partners free to make their own decisions. The chance to start a project from scratch, backed by
OVER TIME I CAME TO UNDERSTAND THAT IN RELATIONSHIPS WITH CUSTOMERS – AS IN LIFE WHAT MATTERS MOST IS HOW YOU RESPOND WHEN PROBLEMS ARISE
a successful company, was an opportunity that far exceeded anything I might have dreamed of at that stage of my professional and personal life. The market has changed enormously since then. Bulgarian car shops and workshops were still accustomed to a fairly modest standard of service at that point. Their needs were largely met by local importers, apart from one foreign player in the commercial vehicle segment. Tyres and workshop equipment were distributed by specialist companies, as was most of the lubricants market. Today customers are used to finding
one roof,” together with a high standard of service. Bulgarian workshops operate in an environment shaped by the absence of legal or tax restrictions on used car imports. At the same time, the standard of mandatory technical inspections remains, shall we say, flexible – which gives vehicle owners considerable latitude in choosing when
a comprehensive parts range „under
and how to have their cars repaired.
The vehicle fleet is highly varied – ranging from fairly expensive used cars to a large number of older vehicles in poor technical condition. Workshops have adapted to a very diverse clien-
problems arise – much the same as in human relationships generally.
tele and service both newer and older vehicles, expensive and budget alike. You often see them standing side by side outside the workshop. All of this requires the distributor to offer a wide range of parts availability.
member how one day Dilyan Atanasov, who was area manager at the time, asked me, politely, whether I had ever considered simply closing my mouth during visits to partners and listening to them, rather than flooding them with my thoughts and ideas. It was a bucket of cold water over my heated head. But I reflected on it and began consciously listening more – which profoundly changed my perspective.
In my experience, what matters most to Bulgarian workshops is the reliability of the supplier – that orders are fulfilled in a predictable way. The price of the product is no longer of primary importance, provided the quality of service meets expectations and is delivered promptly. The technical support provided by the distributor, meanwhile, builds long-term partnership and trust. What truly counts is how we respond when
I have to say that working at IC Bulgaria has changed me personally. I re-
Petar Spiridonov, the current CEO of IC Bulgaria, also helped me understand why I sometimes became very frustrated. It turned out this happened when someone’s words touched on my deepest insecurities. I came to that realisation late – but I came to it.
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99 And one could say that this event was a replica of what you used to do – just on a smaller scale. There were not only
On the side, there were talks from beer specialists explaining how different styles are brewed. I even remember
exhibition stands and outdoor displays, but also catering and a show of some very original vehicles. I ran into many people I knew. One of them told me that on the Saturday while everyone was still asleep he had slipped out to the fair in Pułtusk, and later had to explain himself to the family, who listened with barely concealed disbelief.
one particular curiosity: apparently in some ancient brewery in Ireland, a small quantity of goat droppings is added to the mash, imparting unique qualities to the fermentation. The tradition is said to date back to the Celtic druids (laughs).
KO: Everything changes – and so do the ways companies operate. The display of workshop equipment always attracted the greatest professional interest at our events. There was even a special day reserved exclusively for workshop owners, who could take their time looking around. Now, presentations of new equipment have moved online – a shift the pandemic did a great deal to accelerate. AF: As you know, I have spent the last twenty years permanently online – and yet I still prefer face-to-face meetings and conversations. I suspect the virtual format suits the younger generation better, though I also hope they find genuine satisfaction in building personal relationships. KO: We recently organised a semi-virtual event in cooperation with some beer manufacturers, who supplied participants with six-packs. Mechanics would gather in small groups at someone’s home, so they could chat while taking part in an equipment presentation. Branches also organised similar events for their customers, a bit like watching a match together.
AF: Coming back for a moment to the use of internet technology – how is the idea of digital service records developing? When the workshop networks were being set up, there was a proposal for workshops to issue customers with paper service booklets recording the history of repairs, as authorised service centres do. Today both franchised dealers and the independent aftermarket offer digital service records as a means of tying customers to workshops and workshops to distributors. KO: We are thinking about creating a repair registry that would be an invaluable tool for workshops. I remember from my time in Germany that when a customer came in with a fault, the first question was always: when were you last in a workshop, and what was done? That was the first place to look for the cause of the problem.
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INTER CARS BULGARIA
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PETAR SPIRIDONOV MARKET MANAGER An engineer with the soul of a humanist, who quotes Mark Twain while planning the logistics of charter flights to trade fairs. He dreamed of working in Formula 1, but his career took a different turn – he helped usher in a new era in the Bulgarian spare parts market. Today he co-manages one of the largest teams in the country and argues that partnership and friendship are the best long-term strategies..
Petar Spiridonov It all began during a mathematics lesson in my final year at the First German Gymnasium in Sofia. One day the vice-dean of the German Faculty at the Technical University of Sofia came to visit. I was just a teenager with no clear plans for the future. But when I heard that graduates of that faculty went on to work in Formula 1, at Audi, or at other major German companies, that was enough to fire my imagination. In those days travelling around Europe was not easy – visas were required and you had to queue for hours outside embassies. The prospect of going abroad was not merely a career path; it felt like a gateway to another world.
IN THE EARLY YEARS WE REGULARLY TOOK GROUPS OF BULGARIAN CUSTOMERS TO THE TRADE FAIR IN POLAND AND TO EXPO EVENTS IN ROMANIA
During my studies I spent more than a year and a half in Germany as an intern – in the technical testing department at ZF’s headquarters in Friedrichshafen, in the marketing department at Bosch in Crailsheim, and I wrote my mechanical engineering master’s thesis at the BMW Research and Innovation Centre in Munich. My first job in the automotive industry was as a process manager in an after-sales department. I was waiting for a call from BMW – and then, out of the blue, Mercedes called. They hired me. At Mercedes I was promoted to after-sales product manager, but a year later my line manager’s contract was not renewed, and I unexpectedly received notice of termination. Some time afterwards I received an invitation to an interview at Inter Cars Bulgaria. The meeting took place in a bar. And so, in 2011,
When we entered the market, everything appeared settled. There were large Bulgarian companies with impressive turnovers and branch networks across the country. It looked like a closed and well-ordered world. In the early years we regularly took groups of Bulgarian customers to the trade fair in Poland and to Expo events in Romania. The scale of these events, the knowledge on display, and above all the atmosphere gave both us and our customers an enormous surge of energy and a sense
I joined the team in Bulgaria.
of being part of something special.
From that period I also remember that before we had even reached our first customer, we were completely
We knew so little about the system that every day another fuel tank for a Daewoo Tico would arrive – a part
lost – like ducklings in the mud. It took us a month to get the first delivery of goods onto the warehouse shelves.
absolutely nobody needed. Meanwhile, when we first stocked up, it turned out we hadn’t ordered a single fan belt. I also remember the adventure ten years ago when we organised the first charter flight for a large group of customers to the trade fair being held at the National Stadium in Warsaw.
EVERYTHING PLANNED TO THE MINUTE. AT FOUR IN THE MORNING WE ARRIVED AT THE AIRPORT TO PREPARE FOR THE CUSTOMERS’ ARRIVAL. THEN THE GROUND CREW APPEARED WITH NEWS THAT HIT US LIKE A BOLT FROM THE BLUE: ‚THERE IS NO PLANE
The plan was simple: fly out Saturday morning, return Sunday evening. Everything planned to the minute. At four in the morning we arrived at the airport to prepare for the customers’ arrival. Then the ground crew appeared with news that hit us like a bolt from the blue: „There is no plane.” We froze. After a moment, however, we formed a crisis team. A replacement aircraft was found, but with a four-to-five-hour delay. The situation was so tense that we had to use the airport’s public address system, trying to lighten the mood with a joke so that nobody would give up and go home. Fortunately, we made it to Poland. We lost our reservations at the top restaurants, but it was worth it. The Roxette concert held to mark Inter Cars’ anniversary is a memory for a lifetime.
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103 Any intervention can leave something incorrectly tightened or connected, something disturbed in the electrics. A repair registry would give us an immediate pointer. But it would need to be a registry that every workshop could access online. AF: So a cloud-based electronic service record that would belong to the owner, who would grant access to whichever workshop they visited? KO: Exactly. The record would also contain the VIN, which would be the basis for part searches. The owner would benefit too, since a car with a documented service history stored in such a registry would be easier to sell. We even came up with a working title: the National Repair Registry. It has a satisfying ring to it.
PRICE IS NOT THE ONLY DIMENSION OF COMPETITIVENESS. THE BREADTH OF THE RANGE, AVAILABILITY, LOGISTICS, AND SUPPORT TOOLS ALL MATTER TOO WITHOUT WHICH PRICE ALONE IS MEANINGLESS Krzysztof Oleksowicz
AF: Initiatives like this show that the independent workshop services market can deliver standards comparable to authorised service centres. Some independent workshops already use live video streaming to show customers exactly what needs replacing and why. This kind of customer engagement not only builds the workshop’s reputation for transparency, but also enables a broader range of services to be offered. When customers can see the condition of various components with their own eyes, they are much more willing to agree to have them replaced. KO: Let us consider what a dealer offers the customer. Above all, comprehensive vehicle care – meaning not only a full service, but added value too:
the scheduled repair, for instance. If we in the independent market want to win customers back from authorised service centres, we need to offer the same. Drivers leave franchised dealers for independent workshops after the warranty period for three reasons. The first is, of course, lower prices. The second is proximity – outside major cities, a visit to a franchised dealer means a significant journey. The third reason cited by drivers is the ability to speak directly with the workshop owner, which at an authorised service centre is generally not possible, since the customer deals with a service manager through a rigid procedural framework. In an independent workshop,
a general check carried out alongside
all of that is simplified.
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104 The owner is often also the advisor – but behind all of this there must be an appropriately high standard of service. GK: As a customer of independent workshops myself, I was always frustrated by the difficulty of getting a rough estimate of the repair cost. The answer was invariably: „Hard to say, we’ll need to have a look, check it over...” – and various other evasions along those lines. KO: An excellent idea adopted by some workshop networks is the introduction of a service price list – not a universal one, but tailored to each make and type of repair, so that a driver can go to the website and check, for instance, how much it costs to replace the shock absorbers on their particular car. It would
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work like this: the customer registers their vehicle in the app by entering the VIN for accurate identification, then clicks to select a service from a list, chooses a conveniently located workshop, and sees the price. The price must cover not only the cost of the labour but also the parts. If the customer accepts the price, they can book an appointment on the spot. AF: But prices can vary considerably. One workshop may charge less for the same job, another more; a shock absorber from one manufacturer may be more expensive than one from another; and on top of that there is the discount that the workshop has with its distributor. KO: That can be handled in a dynamic way. Every workshop has its own labour rate and its own discount level
105 with the distributor. The price list would be dynamic, taking these parameters into account, and workshops
KO: It’s a case of squaring a circle: if a distributor wants to ensure availability, it needs as many branches as possible
would set their own labour rates according to their ppart numbers.
– but stocking their shelves requires an enormous outlay. Reconciling the two is practically impossible. In Europe, the largest company in the commercial vehicle parts segment was historically Europarts – but it has been dethroned, and today Inter Cars is the largest. I can add that Europarts lost its position after its owner sold his stake. This illustrates just how difficult successful succession is in this industry.
GK: A question from a completely different angle. When Inter Cars announced years ago that it was entering the commercial vehicle segment, there was considerable scepticism – many said the chances of success were slim, because that market works differently from the passenger car sector. There were predictions that you would come to grief. KO: Inter Cars is essentially the only company to have succeeded in building a range covering passenger cars, commercial vehicles, bodywork parts, and tyres – all under one roof. Many companies across Europe have attempted to expand into the commercial vehicle market, and virtually none apart from us has managed it.
AF: You managed it successfully. I must say, every time I visited your company, I was genuinely impressed to see your son Maciek working alongside everyone else on equal terms. You could have said: son, enjoy yourself, and when the time comes, I’ll bring you in as chief executive. Instead, he worked his way up through every level of the company. That was a magnificent decision.
AF: Don’t overstate the „one roof” – you have quite a few roofs (laughs). The commercial vehicle parts market has its own characteristics. Stock turns over more slowly than in the passenger segment, and warehouses must offer broad availability, because that is what customers expect. A transport company facing a vehicle breakdown cannot afford to wait – downtime means losses. And ensuring parts availability requires distributors to commit very significant capital, all the more so because commercial vehicle parts are considerably more
KO: Let me tell you an anecdote from my student days. One summer I was working at a hotel in Sweden in an international group of young people. Among us was a Malaysian who mentioned during a conversation that his father was extremely wealthy. We all found it rather amusing – he didn’t fit our image of the son of a magnate, this lad washing dishes alongside the rest of us. We asked, half in jest, what the heir to his father’s fortune was doing there with us in the hotel. He said his father had sent him abroad precisely to work and to learn. That made us laugh even more – what could one
expensive than passenger car parts.
possibly learn from washing dishes?
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108 To which he explained with complete seriousness that he was learning through his conversations with us, finding out interesting things about countries he hadn’t known before – including, from me, about Poland. AF: And you sent Maciek to the warehouse to learn. KO: Maciek served as chief warehouse operative back when I was still keeping parts in our flat. He ran the bearing shell department installed in the storage loft – which was easier for him to climb into than it was for me. Even then he knew which oversizes were which, and competently selected the items I asked for (laughs). AF: Now we know why you started with bearing shells rather than, say, exhausts. You had a small loft! (laughs)
THE SHOW CAR CONCEPT WAS SIMPLE: THE TRUCK WOULD TRAVEL FROM BRANCH TO BRANCH AND SET UP WHAT WE CALLED OUR ‚CIRCUS.’ THE TRAINING ROOM ON WHEELS IS NOT ONLY VISUALLY STRIKING BUT ALSO GENUINELY COMFORTABLE Krzysztof Oleksowicz
KO: So Maciek was connected to the company from the very beginning – he had friends at Inter Cars and didn’t arrive as someone dropped in by parachute. That matters a great deal, because our industry is full of examples of people who came from outside and caused catastrophic damage.
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AF: That tends to happen when someone’s knowledge of the industry comes exclusively from spreadsheet tables. I once heard an anecdote about a manager temporarily „parachuted” into an automotive role who, while reviewing sales data, discovered a part number that was stocked at only one branch near the eastern border and was selling extremely well there, while all other branches
showed zero stock. To him it was obvious that such a fast-moving item should be held at all branches, and in large quantities. In fact, it was a Lada fan belt, purchased by a single customer who made a special trip from Ukraine to collect it (laughs). KO: Generally speaking, the companies that developed best were those under owner-management. The industry is demanding and has its own particular characteristics, and people
109 brought in from outside frequently lacked the experience needed to grasp certain nuances. Ideas born of experience gained in other sectors rarely translated well to the parts market. GK: I wanted to ask further about the commercial vehicle parts side. Where did the inspiration come from, given that Inter Cars is such a rarity – a passenger car parts distributor that grew into a dominant force in the commercial vehicle segment? KO: The idea came from abroad. As I mentioned, I have many contacts with industry colleagues in other countries, and I have always listened carefully in conversations with them – you can always learn something from others.
THE TRADE FAIR FORMAT IS CHANGING AND DECENTRALISING. INSTEAD OF ONE LARGE EVENT, MANY SMALLER ONES WITH LOCAL REACH ARE BEING ORGANISED Alfred Franke
AF: You sound just like that Malaysian colleague at the hotel dishwasher. The moral of the anecdote is clear: it is worth not only talking, but also knowing how to listen. KO: Exactly. At one of various international gatherings, I was talking with Robert Lang – the number-one distributor in the passenger car segment in Hungary – who had entered the commercial vehicle segment before us and had come up with a separate, very attractive name for that operation: Cargo. I had been turning over the idea of moving into commercial vehicles myself, so I asked Robert for his advice. He said the foundation was a strict separation of the passenger and commercial vehicle operations. If the same managers who run the passenger side are tasked with building
a commercial vehicle offer, they are likely to come unstuck. Moreover, it is worth bearing in mind that building up a commercial vehicle business inevitably draws resources away from the passenger car side – you are effectively „impoverishing” it, taking money to build a new venture that may not succeed. Many companies tried and failed to make the move.
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INTER CARS MOLDOVA
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SERGIU URECHI MARKET MANAGER An economist by training. Before entering the automotive world he gained experience in the carpet market and the wine industry. He first engaged with the aftermarket from the media side, as publisher of a trade magazine – which gave him an intimate knowledge of the Moldovan market. Ten years ago he decided to put that experience to use and go into business himself, judging it the perfect moment to develop a large share of what was then still largely uncharted territory.
Sergiu Urechi In 2015 I was invited to an international meeting in Riga, where I presented my development plan for the company in Moldova. I was accepted as a potential country manager. The automotive market in Moldova at that time resembled the Wild West. Only a handful of local companies were operating in it. I could see, however, that change was coming – and that I could be part of it. Above all, 95% of companies had local capital, and the franchise model of cooperation was completely unknown here. The Moldovan vehicle fleet is also distinguished by a high proportion of Asian makes. Our first transaction was concluded in March 2015. It had a value of 187 euros, and the transport cost was 500 euros (laughs). Nevertheless, I still say to this day that it was a very successful transaction. We started in spartan conditions. My first „office,” for example, measured just six square metres and had a small skylight in the ceiling. It was embarrassing to invite customers there. So I held all my meetings in cafés and restaurants – always under the pretext that I „happened to be in the area.” I also remember a comic-yet-dramatic episode involving our first goods return. A customer sent back a set of tyres he had ordered. I took them and drove around the nearby villages trying to sell them, hoping at least to cover the costs. That was the reality we were living at the time – it demanded creativity, the ability to improvise, and a great deal of determination.
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WE STARTED IN SPARTAN CONDITIONS. MY FIRST ‚OFFICE’ MEASURED JUST SIX SQUARE METRES AND HAD A SMALL SKYLIGHT IN THE CEILING. SO I HELD ALL MY MEETINGS IN CAFÉS AND RESTAURANTS
112 So I listened to Robert. The passenger and commercial vehicle divisions share logistics, accounting, and
KO: I remember a board discussion about this some ten years ago. I had a habit, before meetings, of analysing
customs operations, but sales were separated entirely. Michał Wiśniewski, who built the commercial vehicle operation, had his own staff and his own product management. One manager orders clutches for passenger cars, another orders clutches for commercial vehicles – even if both come from the same manufacturer.
the results of companies and market segments to get a sense of what was really going on. In the tyre sector, it was clear that there were many distributors, everyone was selling – but margins were thin and nobody was making money. Two camps formed on the board. One argued that since there were no margins or profits in tyres, there was no point going looking for trouble. The other camp – which included me – took the view that since there were no profits there, and tyre distribution companies were essentially monocultures, how long could they keep going?
AF: You even created something akin to separate branches for the commercial vehicle market. KO: The locations remained the same for logistical reasons and cost efficiency. But a separate manager is responsible for commercial vehicle parts sales, and he selects his own staff. Sales are thus organisationally distinct. That the passenger and commercial vehicle markets are in many respects two different disciplines is also illustrated by this story. Back in the 1990s, when we were just beginning to feel our way in the commercial vehicle segment, one of the established players announced that since we were moving into his territory, he would move into ours. And so he did – and achieved absolutely nothing. AF: I take it that having achieved nothing, he retreated just as quickly as he had advanced (laughs).
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THE DISPLAY OF WORKSHOP EQUIPMENT ALWAYS ATTRACTED THE GREATEST PROFESSIONAL INTEREST AT OUR EVENTS Krzysztof Oleksowicz
AF: You also successfully entered the tyre segment – which at one time seemed to be the exclusive territory of specialist companies. Continued on p.
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INTER CARS ESTONIA
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VADIM ŠKATOV MARKET MANAGER He started out in the tyre industry but quickly concluded that the aftermarket offered more opportunities. When Inter Cars decided to enter the Estonian market, he chose to seize the new chance. He started without a team, without an office – in the early days he even assembled the shelving himself. He believes that strategic thinking and persistence are more valuable than following well-worn paths.
Vadim Škatov My adventure in the automotive industry began in 2006, almost immediately after graduating, when I joined one of the major tyre manufacturers. I worked directly with customers, learned the market, and built relationships with tyre service centres and car workshops. In 2014 the company announced it was withdrawing f rom direct sales in Estonia. We were informed that redundancies were coming – from that point, distribution was to be handled by external companies. One of the candidates for a partner was Inter Cars Latvia. Inter Cars Estonia did not yet exist at the time, but the Polish operation had already been exporting car parts to Estonia for five years. During this transitional period I was invited for an interview. After eight years in the tyre industry I felt I had achieved a good deal, but working with tyres alone had ceased
AFTER EIGHT YEARS IN THE TYRE INDUSTRY I FELT I HAD ACHIEVED A GOOD DEAL, BUT WORKING WITH TYRES ALONE HAD CEASED TO EXCITE ME. I SENSED THE MARKET WAS CHANGING – AND I WANTED TO BE PART OF THAT CHANGE
to excite me. I sensed the market was changing – and I wanted to be part of that change. And so a new chapter in my career began. In the early stages of building our position in the Estonian market, my main focus had to be on working with customers who had previously been ordering parts directly from
MANY CUSTOMERS SAW US AS AN AGGRESSIVE NEWCOMER DISRUPTING ESTABLISHED PRICES AND RULES. COMPETITORS WERE CONFUSED – OUR SALES WERE GROWING AND WE WERE OPENING NEW BRANCHES.
Poland. We succeeded in persuading a significant number of them to switch to the local service provided by the first Estonian branch. In 2017, with a solid customer base established and our processes streamlined, we opened four more branches in different regions of Estonia. That was the turning point – local branches could now work directly with customers, and the business began to develop at an entirely new pace. Sales grew, and the brand gained increasing recognition. The market was initially cautious. Many customers saw us as an aggressive newcomer disrupting established prices and rules. Competitors were confused – our sales were growing and we were opening new branches. In the first three years, from 2017 to 2019, before the pandemic, we secured a solid market share. Above all, we succeeded because we offered what was missing: flexibility, a wide parts range, competitive terms, and speed of execution.
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117 In short, the financial analysis clearly showed that tyre distribution companies lacked the resources
workshops to broaden their offering and provide a full service. In a word, I said to them what I am saying to you
for development. Bear in mind, too, that tyre manufacturers were unwilling to supply goods to companies with poor financial results, because insurers refused to underwrite such transactions. My conclusion was that precisely because the situation in that segment was so difficult, the moment was ripe to enter it.
now. The reaction was such that at the end, not a single question was asked, there were no conversations in the corridors – everyone quietly dispersed.
The second point of my market analysis was that tyre servicing in Poland is carried out primarily by specialist tyre workshops. We, on the other hand, were reasoning that a well-equipped mechanical workshop also needs a wheel balancer – sometimes a wheel needs to be balanced to determine the cause of vibrations. We began encouraging workshops to invest in a tyre changer and expand their offering
KO: Without question! But a few years later, when I was talking to a director of one of the major tyre companies and mentioned that peculiarly inconclusive meeting, he smiled and said: „Krzysztof, we discussed it afterwards among ourselves. And nobody believed a word of what you said. We wrote it off as complete nonsense.”
to include tyre servicing. The associated costs were relatively modest, no specialist training was required, and potential customers would come of their own accord, so no marketing investment was needed. We could see the market potential.
only appreciated years later (laughs). Well then – independent workshops supplemented their offering in this way to provide comprehensive vehicle care. On the other side, in response to Inter Cars’ entry into tyres, tyre distribution companies began consolidating, while tyre workshops started extending their range to include other mechanical services.
AF: Not everyone predicted success for you with tyres. Some prophesied that you would, quite literally, blow a tyre on that venture.
AF: Had there been a critic from a theatre trade paper at that meeting, the review would have read: the show bombed.
AF: It transpires that you are an avant-garde creator – and those are often
KO: I remember a meeting with tyre manufacturer representatives at our fair at Bemowo, at which we presented the idea. We explained that we would sell tyre-changing equipment on
KO: Indeed. But let us bear in mind that while a mechanical workshop adding a basic tyre service is a straightforward matter – all you need is a balancer and a tyre changer – the reverse step, a tyre workshop expanding into mecha-
attractive terms, enabling mechanical
nical work, is enormously difficult.
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120 It requires heavy investment in equipment, staff, and training, with no return on that investment coming
KO: And there, the word „limited” is precisely the issue. Customers expect workshops to offer a full service. Bey-
quickly. Such a venture can just as easily become a financial noose.
ond that – why do drivers choose independent workshops? First, the price; second, convenient location; and third – as we already mentioned – there is an expert owner on the premises who can give advice. At a fast-fit centre, you have procedures and fairly anonymous service. The fast-fit chains disappeared. The know-how transplanted to Poland failed to take root, despite enormous capital investment.
AF: Perhaps at this point we might say a few words about so-called fast-fit centres – quick service workshops that offered, among other things, tyre changes and a limited range of mechanical services, while also functioning as large retail shops. Several international chains entered Poland, but the concept failed to take hold.
A TRIANGLE OF CONFLICTING INTERESTS
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GK: Let us say a few words about bodywork parts – another segment you entered, though in many
which parts are to be used in the repair, what the cost should be, and so on. The whole thing plays out within
respects it is also highly specific and therefore challenging. KO: In the 1990s there were quite a few companies that expanded into these components or even specialised in them. Body panels don’t exactly fly off the shelves. In bodywork repairs, original parts are very often essential. On top of that, the market is awash with components salvaged from scrapyards, frequently of unknown provenance.
a triangle of interests that are fundamentally at odds. The insurer wants to charge as much as possible for the premium and settle the claim as cheaply as possible; the customer wants to pay the lowest possible premium and have the repair done to the highest possible standard; and the workshop wants to fit an expensive part with a high margin in order to earn as much as possible on the job. And sitting in the middle of all this is the distributor offering aftermarket components.
AF: And this segment is highly specific in another respect: its dynamics are largely driven by insurance considerations. There is a claim, the insurer car-
KO: All true – but it should be added that when it comes to accident repair parts, the largest volumes by far are in thermal components: radiators,
ries out an assessment and specifies
fans, housings. More than 50% of
121 these items are sold through mechanical workshops, because they are susceptible to mechanical damage
AF: One can therefore expect service prices to diverge even further.
not only in collisions but also as a result of corrosion, and are particularly vulnerable to it. The next major product category is headlights, which are replaced not only after accidents but also due to damage from, say, a stone thrown up from the road. These sell in significant volumes, and they are expensive components.
KO: There are three tiers. Authorised service centres charge the highest labour rates. Once the warranty period expires, vehicle owners move on – primarily because of cost, but also because an independent workshop is considerably more convenient to reach. Larger independent workshops, with five or six bays, have space to accommodate air conditioning servicing, mechatronics, and tyre changes. They also offer tyre storage and have a decent waiting area. They provide a sufficiently high standard of service and attract customers who previously went to franchised dealer workshops. The smallest workshops, unable to offer a full service, are finding it increasingly difficult to manage their costs and are gradually closing. Some simply put their operations officially on hold for „tax optimisa-
AF: The best indication of just how difficult this market is, is the fact that in the accident repair parts segment there are now practically only two companies left – even though there used to be a great many. GK: Let us talk about workshops as they stand in 2023, and what lies ahead for them in the near future. KO: Small workshops are going to face increasing difficulties. Mechatronics is playing an ever-greater role in the servicing of modern vehicles. Without those competencies, complex systems simply cannot be repaired. A small workshop with two or three bays has no realistic way of employing a mechatronics specialist – there are few such specialists available, and consequently they command good salaries. In short, small workshops will be unable to provide comprehensive vehicle care and will have to refer customers elsewhere. That in turn means they risk losing those customers, who may not necessarily want to come back. Meanwhile, workshops that offer a full service will be able
tion purposes” – in other words, they move into the grey economy. In my view, this process will continue.
to charge a higher labour rate.
mechatronics technician” model I
AF: The smaller workshops that are still trying to stay afloat often manage by bringing in outside specialists for advanced electrical, electronic, or mechatronic repairs – technicians who come on site and carry out the work there. It is often the case that repairs in certain specialised areas are performed on a fixed day of the week, when a cooperating specialist comes in. KO: It seems to me that there are two potential lifelines for these small workshops. The first is the „flying
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122 mentioned – called in for a specific repair. The second is a tool rental service. A small workshop cannot put
KO: Whether that is even possible is another question. I don’t know about you, but I can see a shift in society’s
together a sufficiently wide range of equipment, because the specialised repairs for which such tools would be needed occur too infrequently to justify the purchase. Rental could be a practical solution. Training, on the other hand, is a major problem for the smallest workshops: if you have one employee and send them on a training course, the workshop is not functioning while they are away. And yet without training, there can be no thought of the future.
attitude towards the automotive world. During the communist era, cars were a topic of conversation at virtually every social or family gathering – uncle and uncle-in-law would hold forth at length on the merits of the Fiat 125p versus the Wartburg, or vice versa. The car mechanic was a figure of genuine prestige. My impression today is that attitudes towards the automotive world are far more dispassionate. The profession of car mechanic is no longer seen as an attractive one – who would want perpetually battered hands? It seems to me, therefore, that however vigorously we encourage and promote the profession to young people, the industry will continue to grapple with a chronic shortage of workers.
AF: Research conducted by MotoFocus across workshops in the majority of Central European countries shows that owners expect the number of repair points to fall, and that it will be the small workshops that drop out of the market. The reason they cite is limited access to technical data, which they will simply not be able to afford to purchase.
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AF: Succession is also not helped by the image of workshop work, which in the general public’s perception is seen as dirty and physically demanding. Most people picture a workshop employee as a grease-covered man with black under his fingernails – even though that stereotype is becoming less and less accurate, and good workshops are staffed by highly qualified specialist engineers. Working to change this image is undoubtedly a task for the independent automotive market as a whole, because we would like young people to be drawn to this profession.
THE THORNY QUESTION OF SUCCESSION GK: Where will the customers of these small workshops go once they have all withered away? Will the larger workshops simply gain more bays? KO: The productivity of larger workshops is undoubtedly growing. Well-equipped service centres with the right know-how, trained staff, and a logically organised workspace are making ever more efficient use of working time. When a capable owner is managing all of this, the number of vehicles serviced can increase dramatically. GK: Speaking of owners – how is the succession process unfolding in workshops? It is often the case that the older generation is not particularly open to change.
123
KO: Succession can be very difficult in these smaller workshops. A workshop owner was earning above average, which meant they could afford to give their children a good education. But younger generations frequently prefer to make their careers outside the workshop sector. If someone is a well-paid software developer, nothing is likely to persuade them to come back from Portugal, where they have settled, working remotely and surfing in their spare time, to take over their father’s workshop in Pasłęk. That is the reality. GK: A rather Cassandra-like prediction. So what is to be done? KO: We need to think about how to optimise workshop operations to increase productivity. This would require
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126 a thorough analysis using rigorous methodology and the drawing of practical conclusions that could be
they were often built many years ago, when nobody gave it much thought. They have been exten-
widely applied to the daily work of workshops. In France I came across a very interesting concept of repair packages. The idea is preventive replacement of parts that happen to be accessible during another repair – parts that are cheap enough to make it worthwhile to replace them while the car is already on the lift, so to speak. In this way the customer receives a more comprehensive service, their car is kept in better technical condition, and it generates additional business for the workshop. I think it is well worth transplanting this idea to our market and offering customers an extended service.
ded over time, and today they are what they are – and introducing optimisation requires investment.
GK: An interesting and sound idea – customer-facing. But who will implement it, given that mechanics are going to be in desperately short supply? KO: That is precisely why it is also essential to optimise the work directly at the vehicle, so that the mechanics’ time is used as productively as possible. A key issue in this context is the ergonomics of the so-called „dirty side” in independent workshops – making sure that a mechanic doesn’t have to crawl out from under a car twenty times a day and trek back and forth to the front desk. The question is how to streamline parts ordering and reduce to a minimum the time spent on identification and selection.
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KO: You’re right. We’re not going to relocate the workshop entrance, the gates, or the customer service desk. We’re not talking about demolishing and rebuilding from scratch. But we can, for instance, improve communication between the mechanic at the vehicle and the reception staff, so that the mechanic doesn’t waste time walking back and forth. That requires modest investment – in voice communication, for example. I sometimes see the following scene in workshops: a mechanic comes to the front desk to report what is wrong with a particular vehicle, so that reception can discuss the scope of the repair with the customer and order the necessary parts. But because the service advisor is dealing with another customer at that moment, the mechanic stands and waits until they can pass on the information. Meanwhile, time ticks by.
AF: The ergonomics problem in
AF: When it comes to the efficiency of mechanics’ work, authorised service centres have a considerably easier situation, since they restrict their services to vehicles of a particular brand – which means a high degree of task repetition. They have all the specialist tools at hand and don’t need to wonder where to source, say, a timing lock tool for a model they might only see once every few
independent workshops is that
months in an independent workshop.
127 KO: Independent workshops may also increasingly move towards a degree of specialisation in speci-
concerns and without those costs – which amounts to unfair competition.
fic brands, precisely to ensure the greatest possible repetition of tasks – at least for the servicing of more complex systems – which would improve the productivity of their mechanics. I think some workshops will consider moving in this direction.
KO: Indeed – constantly changing regulations and state-imposed requirements are a torment for workshops. A large service centre that employs its own accountant can manage. But small workshops simply drown in the bureaucratic undergrowth. We have a very unfavourable climate around the automotive sector in general. Workshops are treated by default as part of the grey economy. Such conditions inevitably push the smallest ones into the grey economy in reality.
AF: Also worth noting that in the near future workshops will increasingly collide with tightening environmental regulations to which they will need to adapt. The rules are being tightened constantly. And here a particular problem arises: a legitimately operating workshop must bear the significant costs of complying with ever more stringent requirements, while just down the road, in the grey economy, someone operates without such
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INTER CARS HUNGARY
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AKOS SZATMARI MARKET MANAGER Connected to the automotive world from his earliest years. He started by assembling model vehicles himself, and today is engaged in developing a professional distribution network. He believes in the power of a team, consistency, and partnershipbased customer relationships.
Akos Szatmari I got my driving licence as soon as I could – at the age of seventeen. I completed secondary school as a qualified car mechanic and then went on to study as a mechanical engineer. I worked in a workshop for several years, but after the political transformation and the opening of borders to Western cars, I quickly realised how difficult it was to source parts for them. So I opened my own parts shop in my home town and ran it for nine years. In 2006 I moved to JC Autó Kft – the Hungarian predecessor of Inter Cars. When Inter Cars S.A. acquired the JC Auto Group in 2007, a period of transformation began for us as JC Auto employees in Hungary. We entered the market at a time when established domestic market leaders with strongly entrenched positions were already operating here. In many respects they had the advantage when it came to local service. We placed our emphasis on a more personal and professional approach, which allowed us to compete effectively.
DRIVERS DO NOT MAINTAIN THEIR CARS REGULARLY.. THEY REPAIR A VEHICLE ONLY WHEN THEY HAVE TO – WHEN IT HAS BROKEN DOWN AND CANNOT BE DRIVEN
In terms of parts trading, the Hungarian and Polish markets are very similar. I think the way workshops operate does not differ significantly either. There is, however, something that sets the Hungarian end user – the average driver – apart. There is a certain lack of technical culture here. Drivers do not maintain their cars regularly. They repair a vehicle only when they have to – when it has broken down and cannot be driven.
The same number of car batteries is sold here as elsewhere, for instance, but significantly fewer service parts. We also encounter a certain contradiction – a paradox, even. Workshops in our country declare that parts quality is their absolute top priority, more so than in other Central European countries. But at the same time they are equally emphatic that the price must be competitive. And as everyone knows, the highest quality and a low price do not always go hand in hand. For distributors, this means having to juggle the offer – a wide selection, different price tiers, different brands – all in order to meet these conflicting expectations. What is more, workshops
believe that an attractive price – for both services and parts – genuinely affects how they are perceived by their own customers. In other words, they want to offer the best while also being cheap, a combination which, understandably, is often difficult to achieve in practice. What was the greatest challenge in building our distribution network? Entering a market is always difficult, because you are disrupting the status quo. Every period brought its own challenges – and they always seemed the greatest at the time. But every time we managed, because we built a cohesive team that truly knows how to work together. After eighteen years we have succeeded in catching up with the market leaders.
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132
CONSOLIDATION IN DEFENCE OF INDUSTRY INTERESTS GK: In the fight for sound legislation for the automotive sector, SDCM plays a pivotal role. I think this is a good moment to talk about the Association, which has become an organisation whose voice decisionmakers cannot afford to ignore. AF: We are talking in a fairly relaxed and anecdotal register, yet the work of SDCM is a deeply serious matter – concerned as it is with issues as significant as defending the interests of automotive businesses and, with them, thousands of jobs...
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their desks as I pass. But reports of my alleged bilocation and quantum theories about my whereabouts – those are entirely new to me (laughs). KO: I can confirm that Alfred is well known in the industry for being difficult to keep pace with, and that throughout all the years he spent as President of SDCM, he had ample opportunity to do a great deal of running – often in the form of obstacle races, both in Polish government offices and in European institutions.
GK: Perhaps to lighten the mood, something a little less weighty: Alfred is well known for never walking anywhere – he only runs. We also have accounts from credible witnesses who insist they
AF: Let us consider that my warm-up is complete (laughs). Let me begin by saying that there had been many attempts to establish an association, and various people had taken the initiative in organising meetings – but for a long time no common ground
have seen Alfred in two different places at exactly the same time. This has a somewhat mystical ring to it, though it can be balanced by a scientific theory derived from quantum mechanics, which holds that one cannot definitively say whether Alfred is in a given place or not – one can only establish the probability that he is more likely to be somewhere than somewhere else.
could be found. I had participated in those meetings as a representative of the trade press. I knew everyone from my own time in parts distribution, but I was no longer affiliated with any distributor, so I was seen not as one of the competitors, but as a completely impartial figure who was nonetheless closely connected to the industry. Then one day Krzysztof called me, on behalf of several distributors, to propose that I create a trade association.
AF: The running rather than walking – I was already aware of that, having heard complaints from those who have had occasion to accompany me, including at trade fairs. There are also those
KO: We as distributors had been encouraged to organise and establish a common representative body by FIGIEFA – the European federation of national trade associations. In
who accuse me of blowing papers off
2004 Poland became a member of
133 the EU, participating in the shaping of European policy. An institution was needed that could reach Polish
MOST PEOPLE PICTURE A WORKSHOP EMPLOYEE AS A GREASE-COVERED MAN WITH BLACK UNDER HIS FINGERNAILS – EVEN THOUGH THAT STEREOTYPE IS BECOMING LESS AND LESS ACCURATE, AND GOOD WORKSHOPS ARE STAFFED BY HIGHLY QUALIFIED SPECIALIST ENGINEERS Alfred Franke
decision-makers. The decision to entrust the creation of the association to Alfred was passed by acclamation. We all simply agreed that there was nobody better suited – and not only because he had no ties to any particular company, but above all because he is an effective organiser and negotiator, and a man of extraordinary diligence, which has itself become the subject of affectionate stories, as we have already mentioned. AF: And so a founding meeting took place, attended by Krzysztof, myself, and several other heads of distribution companies. That such a meeting occurred at all was something remarkable in itself, because these distributors competed fiercely with one another every day and sometimes had various grievances against each other. But on that day they decided to set their differences aside. KO: It was truly a significant moment – all the more so when you consider our national failing, which is a tendency to quarrel. It is said that where there are two Poles, there are immediately three opinions. Yet here there were several of us, and we all shared one resolve: an association must be founded, and Alfred must be entrusted with organising it. AF: When the proposal came to me, I was already committed to building MotoFocus, which I still wanted to develop. I thought the idea of forming an association was excellent, and one that
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134 could be strengthened by a synergy between my media activities and the needs of lobbying work. I agreed im-
independent distributors from the market. For some companies, sales of these products formed the backbone
mediately and quickly organised the founding meeting. Fourteen companies came – more than I had expected. It was an encouraging moment, watching what had previously been competitors engaging in substantive discussion about the future.
of their business. We began working closely with the international federation FIGIEFA and with the European Car and Repair Alignment, ECAR. I remember a conversation with Gerard Riehle, the head of ECAR. I was telling him how apprehensive I felt in my new role – I had spent my whole career in automotive parts trading, not in lobbying. He said: „And that is exactly the right background to have. Now you will be selling an idea.” That one brief exchange dispelled all my doubts. And so I began my adventure in trading a completely new kind of product (laughs).
GK: What was it that finally persuaded the companies to band together and overcome their reservations? AF: One clear catalyst was the proposed introduction of the Repair Clause – legislation that would allow trade in replacement parts for external bodywork repairs. This was a period in which vehicle manufacturers were registering the design of components – bumpers, bonnets, wings, and the like – on a massive scale, with the aim of eliminating
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KO: For all of us – as representatives of the young independent automotive market in Poland – operating in the public arena, both domestically and at European level, was an entirely new experience.
135 Alfred had to dive straight into the deep end; and then, unexpectedly – for us as SDCM members, and
AF: I don’t know whether you remember the time I brought a senior official from the ministry to your warehouse
somewhat for him too – he turned out to be a very capable swimmer, and very capably at that.
in Czosnów. As we set off, he remarked with some condescension: „I take it, Mr Franke, that you are driving me to something between a car dealership and a chicken shed.” I didn’t even bother to respond – I just changed the subject. But it was gratifying to see his expression when he found himself looking at fifteen thousand square metres of high-bay storage. Suddenly he wanted to hear what we had to say – even though previously all our letters and presentations had been gathering dust in ministerial drawers.
AF: Not only did I have to swim – I had to break a path through the ice like an icebreaker (laughs). I remember meeting with one MP to persuade him of the merits of our proposals. Before I had managed to explain anything, he asked whether our organisation had any member companies in his electoral constituency – if so, he would be happy to help. If not, he had no time for us. That was a response we encountered many times in the early days. GK: But once distributors had branches in every major city, surely our distinguished deputies could no longer deploy such easy evasions? AF: Then different barriers appeared: „Well, yes, but you represent only ‚traders,’ not manufacturers. We are interested in factories – those are the ones we would gladly help.” That was a clear signal that we needed to amplify our voice and invite manufacturers into the fold. And that proved to be the turning point in the way politicians perceived the Association. KO: It genuinely strengthened us. Previously, the decision-makers who shaped the entire legal environment in which our industry operated had no idea whatsoever about the automotive market. To them, parts distributors were just some wholesale outfits of no great significance.
KO: I remember those visits for decision-makers organised by Alfred. We admired the power of his gentle persuasion and personal charm, because in those days persuading an important official to make such a visit was quite an achievement. GK: What made the greatest impression on me, as an observer of SDCM’s activities, was a visit by a Deputy Prime Minister to the Inter Cars trade fair – and not only because such a senior figure had been brought along at all. Afterwards, he began speaking about the industry as if I were listening to Alfred – talking about Poland as a major European exporter of automotive components. I heard that phrase repeatedly at various conferences. AF: It is worth adding that the politician in question had initially not been at all well-disposed towards
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138 us – something we felt keenly during our efforts to secure sensible regulations on parts type-approval. And then we were appearing together at press conferences. But let me correct the optimists on one point: gaining the goodwill of decision-makers did not mean the job was done. KO: That was when Alfred hit on the idea that since he was in the business of „selling ideas,” as Gerard Riehle had put it, it would be worth introducing a little marketing into the process. And so he began organising various campaigns with such inventiveness and flair that many a professional event organiser could have taken notes (laughs).
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FOURTEEN COMPANIES CAME – MORE THAN I HAD EXPECTED. IT WAS AN ENCOURAGING MOMENT, WATCHING WHAT HAD PREVIOUSLY BEEN COMPETITORS ENGAGING IN SUBSTANTIVE DISCUSSION ABOUT THE FUTURE Alfred Franke
139 AF: We needed to find a way to break through on the issue. At that time I was meeting regularly with a director
The campaign proved extraordinarily effective. You could simply feel the shift in attitude
at the ministry. I would lay out the situation, present our demands, he would nod his head sympathetically, and at the end give me a pat on the back – coffee, tea, collect your coat, and... nothing changed. The topic made no progress, and time was passing.
among the majority of MPs.
So, partly out of desperation, we decided to deploy a ruse. We ordered mouse pads with a special graphic design and hired hostesses to hand them out to every official entering the ministry building, with invited journalists looking on. And the following day, the topic finally began to move. GK: You clearly had fun at SDCM. I also remember some kind of jigsaw puzzle that I assembled with my child. AF: It was a puzzle specially commissioned by SDCM. We sent it, together with a letter setting out the industry’s demands, to every MP we had contact with. Attached to the puzzle was a set of instructions: assemble it and find five differences. It still makes me smile, picturing the dignity of high state office sitting in Parliament doing our jigsaw. But we correctly anticipated that in practice it would be the decision-makers’ children – perhaps even grandchildren – who did the work for us and showed off how quickly they could find the differences in the images. Those images illustrated what the market would look like if the legal changes we were calling for were not introduced.
GK: It seems such initiatives prove more effective than lengthy memoranda. AF: I would say they provided support and ensured that our demands resonated in public debate – which inevitably compelled decision-makers to take notice. I don’t know if you remember the My Little Pony campaign. Small, soft pink ponies appeared in supermarkets – some priced at two złoty, others at ten. The only difference was that the more expensive ones were marked with a little square representing a vehicle manufacturer’s logo, while the cheaper ones had a circle – a trademark symbolising an independent manufacturer. Customers who chose the cheaper ponies – ninety-eight per cent of all buyers – were invited to sign a petition. The effect was remarkable: over 100,000 signatures were collected in support of introducing the Repair Clause, and the proceeds from the sales went to charity. None of this would have been possible, of course, without the broad support of the industry coalition with which we conducted these activities jointly.
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140 KO: Winning the Repair Clause was an enormous achievement, and for the association’s members it was living proof of the value of its work. It also broke through the lingering fatalism – the feeling that nothing can be done, what difference can we make? It demonstrated that hard work and creativity can deliver results. When the Repair Clause came into force, no one doubted the purpose of SDCM’s existence. It was something that had really worked out well for us. AF: With hindsight, I have to say we probably would have got nowhere with the Repair Clause had the lobby representing the interests of the vehicle manufacturers not dismissed us entirely. They simply waved us away – and by the time they woke up, it was too late. At a certain point they did begin lobbying hard against the clause, and it had some effect – the issue got bogged down at various stages – but the topic was already part of the public debate, and you couldn’t simply shove it into a drawer and slam it shut. GK: And alongside the lobbying itself, as I recall, the manufacturers were registering the designs of all external parts at a furious rate – an approach that was effectively aimed at banning the trade in replacement parts altogether. Several distribution companies faced complete catastrophe.
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AF: The machine was gathering momentum. When we began our campaign for the Repair Clause, seventy designs of the most popular components had been registered.
ALFRED HAD TO DIVE STRAIGHT INTO THE DEEP END; AND THEN, UNEXPECTEDLY – FOR US AS SDCM MEMBERS, AND SOMEWHAT FOR HIM TOO – HE TURNED OUT TO BE A VERY CAPABLE SWIMMER, AND VERY CAPABLY AT THAT Krzysztof Oleksowicz
141 Two years later, the number had risen to over four hundred.
KO: Before long, SDCM gained additional standing by joining FIGIEFA and subsequently CLEPA, thereby
GK: What arguments did the association put forward in those ministerial meetings? The manufacturers were waving intellectual property rights around as though they represented the music industry, and the shape of a wing panel were a Beatles hit.
moving onto the international stage.
AF: From the outset we presented the matter very clearly: that the Repair Clause is a fair solution, protecting vehicle manufacturers against the copying of their products, while not extending that protection to individual spare parts – in other words, supporting the entire independent market. And here I will bring this thread to a close, because I could talk about it until morning.
AF: One could put it that way. We began working in Brussels as well, meeting with our MEPs. It transpired that the European perspective somehow softened political divisions. On important issues, Polish deputies spoke with one voice. We had support across all political groupings. The days spent in Brussels I remember as exceptionally intensive. I ran from one meeting to the next – as many as eight a day – covering the entire parliament building on foot. I explained the situation, set out the industry’s demands, and described how many jobs depended
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INTER CARS UKRAINE
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VASYL HOLOVACH MARKET MANAGER He grew up in Soviet times and today is building the independent automotive market in independent Ukraine. He comes from Uzhhorod in Zakarpattia, which borders four countries – Hungary, Slovakia, Poland, and Romania – and so understands perfectly the opportunities that international business cooperation offers.
Vasyl Holovach In 1996, in Uzhhorod, a car parts shop
At the start of 2005 I was offered the
belonging to a foreign company that was attempting to start operations in Ukraine opened directly across from where I worked. In October of that year I was offered a month’s work in the company’s warehouse during my annual leave. Spare parts for cars – it was love at first sight.
position of marketing manager at Inter Cars Ukraine – the first Inter Cars S.A. branch outside Poland. That was also when the task of building the company in Ukraine to European standards began.
The late 1990s and early 2000s were a time when the black and grey economies were flourishing, and the contraband trade in spare parts accounted for more than 50% of the Ukrainian market. A further 15–20% came from imports in which the declared value of goods was understated in order to pay lower taxes. Our company did not operate in these ways, so it had to find other opportunities. We focused on reaching workshops as our primary customers, building a sales representative network, efficient logistics, and marketing.
I WILL NEVER FORGET THE MORNING OF 24 FEBRUARY 2022, WHEN THE INVASION OF UKRAINE BEGAN. IN AN INSTANT, ALL OUR HOPES, DREAMS, AND EXPECTATIONS WERE SHATTERED
Between 2006 and 2010, the spare parts market was highly chaotic. There were automotive bazaars, car parts shops, so-called „logisticians” who smuggled parts from abroad to order, and parts distributors. As I mentioned, approximately 50–70% of the entire spare parts market operated in the grey economy. The number of car workshops was not large – especially given the scale of Ukraine. Most of them were adapted garages that fitted parts brought in by the vehicle owner. The main customers were considered to be car parts shops and bazaars, where large quantities of goods could be sold immediately. There were also branches of foreign companies, which could not compete on price with Ukrainian distributors and therefore sought other opportunities, other markets, other customers. For foreign companies, the car workshop became the primary customer – one for whom price was not the first consideration, and what mattered was fast logistics, warranty cover, breadth of range, availability, and technical and marketing support. An effective sales representative system operated successfully in all such companies. These businesses transformed the spare parts market significantly and taught car workshops how to sell spare parts and handle warranty service. The year 2014 was a turning point for every Ukrainian. The euphoria that followed the Revolution of Dignity gave way to
disorientation after Russia’s annexation of Crimea and the start of the war in eastern Ukraine. We had to close our branch in Donetsk; its staff were transferred to branches in Zhytomyr and Vinnytsia. The economic situation deteriorated sharply. Many companies closed. Yet in 2014 we not only survived – we made a profit. That was a remarkable result in that market.
in early March our logistics centre was completely destroyed by enemy artillery fire. We suffered the greatest losses in the market at the very start of the war. It was a critical moment for our company.
I will never forget the morning of 24 February 2022, when the invasion of Ukraine began. In an instant, all our hopes, dreams, and expectations were shattered. It was a shock for every Ukrainian. Over eight million people left the country in the first months of the war. Millions migrated from the east and centre to western Ukraine. About a million volunteers stepped forward to defend the country. On 28 February I too was mobilised into the Ukrainian armed forces.
company’s employees and franchise partners who were scattered across Ukraine and abroad. A team was reformed, searching for ways to resume operations. By early March 2022 sales had resumed in the majority of branches, and by the end of March regular deliveries from the central warehouse in Poland directly to branches had begun. All logistics routes and processes were changed in a very short time. The company resumed operations at almost full scale.
Our central logistics hub near Kyiv was at the epicentre of the fighting – just six kilometres from Hostomel airport, where the first battles began. Our warehouse housed a strongpoint of the Ukrainian Armed Forces. The fighting took place just
In July 2022 I returned from military service to work at the company. By the end of the year we had optimised the branch structure, and within the following six months we had managed to offset the losses caused by the destruction of the central wareho-
tens of metres from the building. Sadly,
use. A fantastic result for our team.
The entire burden of responsibility fell on the shoulders of Vladyslav Buhra, the company’s commercial director. He did something extraordinary. In a short time he united the
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on the legislative choices that would be made. We even organised working breakfasts in the parliament building,
GK: And later I witnessed a Deputy Prime Minister and Minister declare with pride at a press conference
presenting the latest market reports.
that Poland is the European „hub of automotive component production.” He had taken that phrase directly from SDCM materials.
GK: In short, running SDCM required not only the right expertise and dedication, but robust physical health. I imagine that after a full day chasing MEPs around, a person is thoroughly exhausted. AF: Quite true – shoe leather wore out quickly. But the satisfaction of those conversations, in which I was convincing MEPs of our case, made the fatigue disappear – and the following day I had energy again. In 2008 the future of the Block Exemption Regulation, which was due to expire in 2010, was being decided, and the shape of those provisions was of crucial importance for the functioning of the independent automotive market. KO: All this grassroots work – „educating” decision-makers in Parliament, in ministries, in the European Parliament – was affected by elections. Every so often, the people in post changed. AF: That is perhaps the greatest challenge. To return to the metaphor of selling ideas: after elections, we would lose our existing customers and have to win new ones. KO: Before SDCM existed, the term „automotive market” was understood to mean only car sales, and the automotive industry was synonymous with vehicle manufacturing. The independent market was not perceived at all.
147
AF: Because our community was by then being noticed by those in power. We had finally succeeded in getting the message across that we represent an industry that provides hundreds of thousands of jobs. It became considerably easier to reach those responsible for shaping the legal framework – on the type-approval of parts and the implementation of European regulations, for instance. It is worth recalling that the original draft proposals were extremely unfavourable for businesses operating in Poland and placed them in a very difficult competitive position relative to companies operating in other European countries. KO: Also worth mentioning another aspect of SDCM’s work – all the research and reports that provided a wealth of highly valuable market data, which we as members of the Association were also able to use in developing our strategies. AF: Indeed. Our report on telematics, for instance, was entirely unique. FIGIEFA itself said it was the first document to bring together such a comprehensive volume of data in this field. It was therefore used at European level, not only in communications with Polish decision-makers.
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148
GK: I remember the impact of the report on the outdated data and errors in the Central Vehicle Registry. Every news outlet covered the story of the „dead souls” in the CVR. AF: It was a very important report, because it demonstrated that the actual average age of Poland’s vehicle fleet is considerably lower than what the CVR registers suggested – registers which indicated, among other things, that there were more Syrenka cars in Poland than Toyota Yarises, and that 23,000 registered vehicles were older than the first mass-produced car, the Ford Model T. It should be remembered that these statistics, which distorted reality, were being used to justify „stemming the tide of automotive scrap flooding the country” – in practice, a ban on importing used vehicles. Also worth recalling that in the early 2000s, any kind of analysis of the Polish market and its potential was extraordinarily difficult, because the CVR data was completely falsifying reality. We still have inaccurate data on automotive businesses in Poland, in fact. According to official figures, there are over 90,000 automotive workshops operating in the country – a number plucked from thin air. The error stems from the fact that official statistics count individuals working on B2B contracts as separate workshops. So if four mechanics work on such a basis in a single workshop, the official statistics record four automotive companies – or five, counting the workshop owner.
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I REMEMBER THE TIME I BROUGHT A SENIOR OFFICIAL FROM THE MINISTRY TO YOUR WAREHOUSE IN CZOSNÓW. AS WE SET OFF, HE REMARKED WITH SOME CONDESCENSION: I TAKE IT, MR FRANKE, THAT YOU ARE DRIVING ME TO SOMETHING BETWEEN A CAR DEALERSHIP AND A CHICKEN SHED Alfred Franke
149 KO: Rough estimates suggest the actual number of workshops is around 24,000 to 25,000. And reports from the market suggest that number is declining – unfortunately, more workshops are closing than are opening. GK: The report on the „dead souls” in the CVR was naturally accompanied by an artistic component... AF: We organised a small happening. Together with invited journalists, we travelled in a hired vintage London double-decker bus between the Parliament building and the Ministry of Economy, while young people with a megaphone announced the nearly seven million „dead souls” in the register. All these activities meant that although those outdated entries are still visible in the official databases, they have at least been classified as archived. As a result, no one in their right mind now takes them into account when determining the number of cars on Polish roads or their average age.
WHEN WE BEGAN OUR CAMPAIGN FOR THE REPAIR CLAUSE, SEVENTY DESIGNS OF THE MOST POPULAR COMPONENTS HAD BEEN REGISTERED. TWO YEARS LATER, THE NUMBER HAD RISEN TO OVER FOUR HUNDRED Alfred Franke
GK: Speaking of performances – it is worth recalling that SDCM eventually staged a genuine theatrical production, and an avantgarde one at that! AF: Indeed. It featured young, professional actors. The drama was devoted to the activities of vehicle inspection stations. SDCM not only prepared a detailed report on the subject and a list of measures whose introduction would significantly improve the situation, but also brought high art to bear on its campaigning (laughs).
Continued on p.
154
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INTER CARS SLOVENIA
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PETER BAŠTIČ MARKET MANAGER He began his career in the automotive industry as an intern at a Slovenian truck factory. He came to Inter Cars through an employment agency and immediately took on an ambitious task: introducing the company to Slovenia’s demanding market. The very next day, he had to independently take over a branch. Today he builds Inter Cars’ strong position in a country where quality means more than quantity.
You reportedly wanted to work in the automotive industry since childhood. That’s true, which is why as a student I applied for an internship at the TAM truck factory in Slovenia. So my first steps in the industry were in manufacturing.
W SŁOWENII MAMY JEDNE Z NAJWYŻSZYCH USTAWOWYCH PŁAC MINIMALNYCH W EUROPIE, CO PRZEKŁADA SIĘ NA WYSOKIE KOSZTY OPERACYJNE
Before joining Inter Cars, did you know anything about the company? than others? I first heard about Inter Cars at an employment agency. When my candidacy sparked interest, I went for an interview at Inter Cars Croatia headquarters in Zaprešić, where I got to know the company better. Only there did I learn that it was a huge parts distributor. Did you have any doubts when deciding on this job? Did you already see development potential in the Slovenian market? The main motivation was the challenge. I thought to myself that there were opportunities in Slovenia to bring Inter Cars into the group of market leaders. I had some concerns, but they were more about myself – whether I could achieve such results in a country where many strong, local players were already operating. But it was precisely this vision of success that attracted me. And since every business involves taking risks, this didn’t discourage me at all.
Slovenia has always had one of the youngest automotive fleets in Europe. German and Italian brands are popular, but we also have a Renault factory where the Clio model is produced and from this year Twingo EV model, which also strengthens that brand’s position. How does the way workshops operate in Slovenia differ from that in Poland? What is the position of independent workshops relative to authorized service centers? Workshops in Slovenia are very organized – this is the result of influences from Western countries, especially Austria and Italy. To service cars from these markets, workshops must match them in terms of service quality and standards. Large imports of relatively new used cars have made independent workshops, especially the larger ones, perceived by drivers as well as authorized service centers.
Did the Slovenian market have any
One might suspect that „organized” also means they approach market
special characteristics, e.g., are
changes with reserve, i.e., they were
specific brands more popular there
skeptical about a new distributor in
the market? How did you manage to gain their trust? There was no skepticism about the company’s origin. Quite the opposite – our offer was wide and competitive, which allowed workshops to improve profitability. We built trust
MOJE POCZĄTKI NA RYNKU BYŁY BARDZO DRAMATYCZNE – DRUGIEGO DNIA PRACY ZMARŁ PARTNER, KTÓRY PROWADZIŁ PIERWSZY ODDZIAŁ W SŁOWENII. MUSIAŁEM PRZEJĄĆ JEGO OBOWIĄZKI, NIE MAJĄC JESZCZE ŻADNEGO DOŚWIADCZENIA.
by keeping promises and approaching things professionally. We understood workshops’ challenges and supported their daily work. Does running a company in Slovenia differ from operating in Poland – e.g., due to different mentality, customs, or customer needs? I wouldn’t say the differences are diametrical, but you can see an important aspect here, namely labor costs. Slovenia has some of the highest statutory minimum wages in Europe, which translates into operational costs. In turn, customers expect primarily high-quality services, not the cheapest ones possible.
As we know, the market and circumstances are constantly changing, but what is most
you like to tell colleagues from other countries?
problematic today and hinders workshop development?
Unfortunately, my beginnings in the market were very dramatic – on the second day of work, the partner who ran the first branch in Slovenia died. I had to take over his duties without having any experience or knowledge of the company’s operating system yet.
This probably won’t be very revealing, but I think in our country more than others you feel the lack of qualified workers, and this probably also makes it harder for us than others to compete for customers with modern cars. On a daily basis, workshops signal that they also very much feel rapidly rising operating costs, which makes many workshop owners look unfavorably on wage increases. On one hand, they feel they must raise wages to attract good people to repair these modern cars, but on the other hand, it doesn’t come easily to them. We know finances are always most important, so what do workshop owners plan to do about this, because if they don’t change anything themselves, of course nothing will change? There’s no simple recipe here, though one way is to increase hourly rates. Fortunately, many workshop owners understand this and systematically try to raise service prices in small steps, although still nearly one-third of them aren’t convinced. However, I think time will show that this is the natural way to obtain funds for new investments, including hiring well-trained employees and purchasing modern equipment.
How is Poland perceived in Slovenia and did this affect your market position? Poland enjoys great respect in Slovenia. The development that has taken place there is inspiring, and many people here notice this. However, this didn’t have a significant impact on our position – local actions were key. What Polish experiences did you use when building the branch in Slovenia? We modeled ourselves on solutions regarding branch operations, inventory management, and the partnership cooperation model. Were there moments when it seemed to you that the project might not succeed?
Do you remember any dramatic
No, I never had doubts. We create new branches and develop business. In terms of offer attractiveness and the cooperation model with workshops, everything functioned and functions well. The main challenge for us and our partners is high costs, which affects profitability levels. This is the
or funny situation from work that
main problem we must deal with daily.
154 And it proved successful: journalists took an interest in the issue, and politicians finally began to debate it – though after many years the subject is not yet entirely resolved. GK: Let us also mention that a longanticipated change of guard has taken place at SDCM. KO: Let me say first that when Alfred signalled his wish to hand over the reins of the association after so many years, all the members’ immediate instinct was to beg him not to. He had simply become an institution, and no one could imagine how SDCM would function without him. Fortunately, being who he is, he ensured that the transition occurred without any turbulence, and the association continues to function smoothly. AF: That was what mattered most to me – not only because I felt a duty of loyalty towards you, the companies that had placed their trust in me years ago, but also because I am emotionally bound to SDCM. It represents a significant part of my life, and I was determined that the Association should flourish. Today it is operationally run by Tomek Bęben, who is doing an excellent job. And I am always ready to help when Tomek or one of the members reaches out to me. I remain at your disposal. KO: In that case, to close this chapter, I can assure you that we do not
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IN THE EARLY 1990S COMPANIES CAUGHT THE WIND IN THEIR SAILS – THOUGH IT SHOULD BE SAID THAT FOR SOME IT BLEW IN THEIR EYES. XIN ANY CASE, BY THAT POINT YOU COULD NO LONGER SIMPLY WALK INTO THE MARKET EVEN WITH SOME CAPITAL BEHIND YOU Krzysztof Oleksowicz
155 regard that as a courtesy declaration – and we will take you up on it.
AF: In any foreseeable future, I don’t think that threat is visible. Polish distributors are too well-conditioned
GK: It is gratifying to hear that the industry has developed to such a degree and built such an influential community. Can we say, then, that the Polish aftermarket has now reached maturity and that things have settled into place?
by having grown up in such fiercely competitive conditions – they won’t be easily outmanoeuvred.
KO: In the 2000s, in terms of the major players, not a great deal changed – what economists call a barrier to entry had by then emerged. The companies that had been established in the early 1990s caught the wind in their sails, though it should be said that for some it blew in their eyes. In any case, by that point you could no longer simply walk into the market even with some capital behind you. I remember that around 2000, an acquaintance asked whether the parts market was an attractive sector. I said very much so – constantly growing, more and more cars on the road, generally excellent. He said he would talk to his father, as the family had some money and they would set up a distribution business too. On an established market, however, it was no longer that easy. To use a Western metaphor – the territories west of the Mississippi had already been settled. GK: Is there not a risk that Polish distributors will become complacent – to put it more bluntly, ossified – just as Western companies have, and themselves become fat carp being nibbled at by some foreign small piranhas?
GK: And those being outmanoeuvred by our companies in the West – are they doing anything to defend themselves? KO: For now, they are waiting and complaining to their suppliers. The thing is, whereas in the past, when German distribution companies would lament their difficulties to German manufacturers, it carried some weight – those manufacturers might have restrained us, in the name of solidarity with long-standing partners, and told us to stay in our own back yard – now that Western distribution companies have gone international and passed into the hands of various investment funds, very few people care. Suppliers say openly that the market for European manufacturers is Europe, and Polish distributors are European companies.
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MACIEJ OLEKSOWICZ
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PRESIDENT OF THE MANAGEMENT BOARD INTER CARS SA
He has been connected to the automotive world from his earliest years – quite literally: as a young child, even before Inter Cars was founded, he helped his father manage a parts warehouse stored in a wardrobe at home. A motorsport enthusiast and former rally driver. He enjoys adrenaline, competition, and fast decision-making. In 2010–2011 he competed in the European Rally Championship, and in 2012 in the SWRC World Rally Championship cycle. For many years he personally managed a company providing service support for rally vehicles. He began his professional career in the aftermarket in 2000, when he joined Inter Cars. He was responsible for creating the sports vehicle parts and tuning department, and for implementing ERP systems, data warehouse systems, logistics solutions, and inventory planning systems. From 2015 he was responsible for managing Inter Cars S.A. and the Inter Cars Capital Group in the areas of new technologies and IT. From 2001 to 2015 he served as a member of the Supervisory Board; in 2016 he became a member of the Management Board; and since 2017 he has served as President of the Management Board of Inter Cars S.A. He is also actively involved in the Polish Business Council, working to strengthen the Polish economy, and served as Vice-President of that organisation from 2023 to 2025.
INTERVIEW WITH MACIEJ OLEKSOWICZ AF: Maciej, you have been active in the aftermarket for many years and have been personally involved in implementing modern IT-driven solutions – which makes you the ideal person to address the question preoccupying our industry. Everyone agrees that the aftermarket is entering a period of profound transformation, though it is not entirely clear whether this is evolution or revolution. What does the future hold for the independent parts and services market? Will it still exist in its current form in ten to fifteen years, or are we heading towards an entirely new model? MACIEJ OLEKSOWICZ: There are several factors at play. On the distributor and manufacturer side, the most significant transformation is industry consolidation. I expect some players to exit the market, and in five to ten years we will have considerably fewer distributors and manufacturers. For manufacturers, the additional challenge is the ongoing pace of technological change and the investment it demands. Many of them made poor choices, and the technologies and production lines they invested in – primarily in the area of electromobility – are not profitable.
to bring knowledge and solutions to workshops so they can service successive generations of vehicles. It is difficult to identify any single dominant trend, though – it is more a series of fairly gradual changes. The vehicle fleet, however revolutionary a new technology may be, changes relatively slowly. The key current trends are new Chinese vehicle brands, ADAS driver assistance systems, various forms of electrification – principally hybrids – and a constant increase in the volume of electronics and sensors in vehicles. GK: But it is not only technology that is changing – customer expectations, working practices, and business models are changing too. What will be the key success factor for companies in this market: innovation, knowledge, flexibility, or perhaps organisational culture? MO: It is nothing new that „culture eats strategy for breakfast.” Culture is always the foundation on which every organisation rests. A strong culture makes a company flexible, open to development and the acquisition of knowledge, searching for new solutions and innovations, and responsive to customer needs.
On the independent workshop side, I do not expect revolutionary change. It will be more a matter of continuous evolution. A workshop must be prepared for constant effort – seeking solutions and ongoing training in order to adapt to new developments. The
Vehicles are growing ever more complex, and society is growing ever more prosperous. Diagnosis and repair are becoming ever more demanding. That means demand for competent workshops is rising.
largest distributors have an obligation
The customer’s willingness – and
ILS TO STABILNY I NIEZAWODNY OPERATOR LOGISTYCZNY, SPECJALIZUJĄCY SIĘ W KOMPLEKSOWYCH USŁUGACH LOGISTYCZNYCH. JESTEŚMY W POLSCE LIDEREM W BRANŻY, KTÓRY ŚWIADCZY WYSPECJALIZOWANE USŁUGI DLA SEGMENTU AUTOMOTIVE ORAZ SYSTEMATYCZNIE WPROWADZA INNOWACYJNE ROZWIĄZANIA DLA KLIENTÓW Z INNYCH BRANŻ. DODATKOWO, JAKO SPÓŁKA O ZIELONYM SERCU DBAMY, BY NASZE DZIAŁANIA BYŁY NIE TYLKO PRECYZYJNE I TERMINOWE, ALE TEŻ EKOLOGICZNE.
162 ability – to pay for a comprehensive service is growing. That is an encouraging sign, one that creates signifi-
mechatronics technicians” – mobile specialists supporting workshops with difficult repairs. Is that model
cant space for the development and growth of independent workshops.
a realistic proposition within the market structure, or will it remain a concept that doesn’t survive contact with economic reality?
AF: Remote diagnostics and the ability to service vehicles online – things that sounded futuristic just a few years ago – are now real solutions appearing in market after market. To what extent will these technologies genuinely change the way workshops operate? Will the independent service centre become more of a „digital terminal” than a physical repair point? MO: Repair in the vast majority of cases must be physical. Remote diagnostics is an excellent tool, but it does not replace physical repair. Online servicing is essentially the correction of faults introduced by the manufacturer – new updated software does not replace changing filters, fluids, tyres, or mechanical components. A vehicle, regardless of its powertrain type, is a complex piece of equipment that requires servicing, is involved in accidents, and has a range of consumable parts requiring regular replacement. In my view, digital tools – such as remote diagnostics and access to vast online knowledge bases – can make a workshop more efficient. That is the answer to the growing diversity of the vehicle fleet and the increasingly complex technologies being used in vehicles.
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MO: We already have not only flying mechatronics technicians but also flying specialists for things like windscreen replacement. It is an excellent model, and in my view one with a real future. I would add, however, that a flying mechatronics technician is also often a remote mechatronics technician. In motorsport, it has long been common for an electronics engineer to connect remotely with a vehicle, read and analyse logs, and relay servicing guidance to the mechanics on site. In rallying, we had the ability to send logs from the rally car to our engineer from any location with mobile network coverage many years ago. AF: There is growing discussion about the need to optimise workshop operations – not only through equipment, but through maximising the use of logistics, planning, and digital management tools. Is the market moving in that direction, towards a more industrial model of operation organised like a production line?
AF: Industry conversations incre-
MO: A production line is not, in my view, a good analogy. On a production line there is a high degree of standardisation, with people or machines performing simple, repetitive tasks. Today’s vehicle fleet is growing ever more complex, and the servicing process
asingly raise the concept of „flying
itself therefore requires competent,
163 creative workers. Standardisation helps throughout the entire process up to the point of delivering the core service
exceeds supply, prices rise. A good mechanic will therefore command increasingly higher pay and will have
– scheduling a customer visit, ordering parts, delivery, customer communication, any return or warranty claim. A competent, creative mechanic should be surrounded by smoothly functioning processes that support them, so that they can devote their time to what they know best. Parts should arrive on time, properly matched to the vehicle. The distributor should deliver training, knowledge bases, technical support, and efficient logistics around the workshop – and should also collect used components and handle their reconditioning or disposal.
higher expectations. It is the responsibility of workshop owners to create good working conditions, to build a culture in which the mechanic is the most respected member of staff in the service centre, and to raise service prices in order to have the means to pay adequate wages. The 1990s are over – the era when the mechanic was the one who did the „dirty work,” and if they don’t want to work here I’ll find another one. It is also the responsibility of the owner and the distributor to surround the mechanic with smoothly functioning processes that make maximum use of their time. Parts should arrive on time and correctly matched. The mechanic should see a path to development through further training. Their working conditions should be clean and tidy, and someone from reception should bring them a coffee.
I see enormous potential for standardisation around the workshop and in the core areas of customer service, but at the service bay itself most challenges require an individual approach. Even a tyre change today frequently involves additional tasks, such as calibrating tyre pressure sensors. GK: And that raises a problem – where are these creative and competent workers to come from, given that the workshop sector has been grappling with a skills shortage for years? Good mechanics are increasingly hard to find, and the profession no longer enjoys the prestige it once had. Is it possible to reverse this trend? Does the mechanic’s trade have any prospect of a renaissance?
AF: We can see that some workshops are outstanding at building a team, while others are completely failing at it. Often what makes the difference is not technology, but the attitude of the owner. Is a change of mindset in workshop management needed? Or will it take a generational change to introduce new standards in the management of people and knowledge?
MO: This is one of the industry’s greatest challenges today. I believe in the laws of the market. Where demand
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INTER CARS SLOVAKIA
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BRANISLAV BUČKO CLUSTER MANAGER: Slovakia, Czech Republic, Austria He began his professional life as a forklift operator and today manages Inter Cars’ operations in the Slovak market. He believes the most important things are to grow sales, meet payment obligations, avoid losses – and build trust with partners as you would within a family. He is convinced that continuous education is essential for mechanics, and that success is a team achievement, not an individual one.
Branislav Bučko I was nineteen when a friend asked me whether I would like to join a newly formed team at the branch of an international automotive parts distribution company. I had just completed my first year at a technical university, but I was increasingly drawn towards economics and
vehicles in large numbers and the domestic fleet grew rapidly. On top of that, the government began supporting the replacement of old communist-era cars with new ones, which further stimulated the entire sector.
management. I made a decision that, as it turned out, shaped my entire professional life. I enrolled on a part-time degree at the University of Economics in Bratislava, while simultaneously working in the warehouse on day and night shifts. Over the following ten years I immersed myself in the intricacies of the industry, moving through a series of positions until I eventually took on a management role.
recommending products they consider to be of the highest quality. To a significant degree, however, they are guided by their own convictions and experience – something that is clearly visible when you compare them with workshops operating in the Czech Republic.
In 2005 a former colleague proposed that I take on the task of building the Inter Cars branch network in Slovakia. At that time, following Slovakia’s accession to the European Union, the market had opened up to strong international players. The cards were being reshuffled. By 2005 the market was fairly saturated. International companies were operating here, some of them for over a decade. It was not the Wild West, where anyone could claim as much land as they could plough. You had to push your way in. We arrived at the ideal moment. The relaxation of regulations and the reduction of import duties on cars from abroad had given the market a significant boost. People began importing
Slovak workshops are known for
WITHIN THE REGION, SLOVAK MECHANICS STAND OUT FOR THEIR OPENNESS TO TAKING ON APPRENTICES, – THEY DO SO MOST WILLINGLY OF ANY COUNTRY IN CENTRAL EUROPE
Within the region, Slovak mechanics stand out for their openness to taking on apprentices – they do so most willingly of any country in Central Europe. Perhaps they view it as part of their responsibility towards local vocational schools and the younger generation. Interestingly, despite this willingness, many workshop owners admit that they do not necessarily
investment decisions workshops make. The principle is simple: either you develop or you gradually exit the market. The only path to maintaining competitiveness is to increase operational efficiency – which is why the discussions about raising labour rates, which are being heard with increasing frequency in Slovakia, are of great significance
see it as a realistic way of securing qualified employees in the future. It appears that apprenticeships are treated more as a form of educational support than as a strategic tool for building future staff.
today. And this will translate into a growing willingness to invest both in equipment and in staff development and service infrastructure.
The number of customers at workshops is growing steadily, which generates a degree of optimism about market growth and therefore growth in the number of workshops in Slovakia. Although the issue of access to technical data is mentioned significantly more often by Slovak workshops than we hear from colleagues in other regions, the positive outlook on market growth rises above this concern. There is a second problem that we see more clearly than colleagues in other countries – drivers who, in search of savings, bring their own parts to workshops and expect them to be used in the repair. They forget that it is then difficult to expect the workshop to accept full responsibility and provide a comprehensive warranty for such a repair. Serious changes are coming to the automotive services market, and these have implications for the
Did competitors try to push us out? To be honest, at times we were more absorbed by difficult conversations with suppliers than by the competition. The proximity of the large warehouse in southern Poland and the direct connection of the Slovak branches to its logistics minimised the need to purchase directly from manufacturers. This in turn meant that local manufacturer representatives did not see us as „their customers,” because our sales results did not translate directly into their own performance on this market. It ultimately took a few years for everything to bed down properly. We do have achievements we can be proud of. Recently, for instance, we were the first to implement a marketing and sales tool in the form of coupons within the E-cat system. This is an entirely new approach to influencing customer purchasing behaviour, and I hope it will inspire other countries in the group.
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167 MO: I will repeat: today’s market is no longer the 1990s – a new approach is essential. But it makes no difference
responsibilities and duties have been divided. Inter Cars is cited as one example of successful succession.
whether the owner or service manager is twenty-five or sixty-five. These are trends and challenges to which anyone can respond appropriately.
That was made possible by my father’s difficult decision that the company should have one leader – and his move into an advisory role. We often have differing visions and views on priorities and various matters, but the company has a clear direction set. It is important to have open conversation and a willingness to discuss and accept different viewpoints – but even more important, ultimately, is to reach one specific, coherent decision.
AF: It is evident, however, that a new generation of successors is increasingly taking the helm. But does this genuinely mean they have a real impact on changing how workshops function – or are they mostly implementing their parents’ vision in a new wrapper? How should we assess their potential to drive deep reform? MO: Succession is a subject for a separate book. In Poland and many Eastern European countries, succession is something entirely new as a social phenomenon. As a society, we have no experience or established understanding of how to prepare for this process or what challenges it entails. The vast majority of companies were founded in the early 1990s, and now, thirty-five years on, we have reached the point where the founders are stepping back into well-earned retirement. If a company has existed for several decades under its founder’s leadership, that means the vision is broadly sound, and it means the organisation has a capacity to adapt to a changing environment.
GK: Chinese vehicle manufacturers are entering Europe ever more assertively – with new brands, new technologies, and above all an aggressive pricing strategy. What might be the consequences of this expansion for the independent market? Is the aftermarket sector ready for such a „new player” that could change the rules of the game? MO: The industry is not ready today, but it is doing a great deal to prepare for the moment when these vehicles arrive at independent workshops on a mass scale. The Chinese vehicles currently selling are mostly relatively simple, conventional constructions. The aftermarket has the knowledge to service these vehicles – what is needed is the right catalogue and parts availability.
Is the successor – not necessarily a family member – ready? That depends on how they were prepared for the new role, when the succession process began, and how clearly
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INTER CARS CROATIA
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MIRKO RUGLE MARKET MANAGER He did not plan a career in the automotive world. Today he has two decades in the industry behind him and a share in building Inter Cars’ Croatian operation. He believes that loyalty is built on trust and the future on shared vision – not on chance. Though it was chance that started everything.
Mirko Rugle It will sound like a cliché, but I came to the automotive world virtually by accident – I had previously been working in the coffee market. One day, twenty years ago, a colleague called me at six in the morning asking me to help him unload a lorry full of spare parts at the company where he worked. I remember that my first instinct was to find some way out of it – it was very hard to get myself going so early – but in the end a sense of camaraderie prevailed, and that turned out to be one of the best decisions of my life. I stepped into the unknown: the company was young, but warehouse expansion was visible from one day to the next, new customers kept appearing, and the numbers grew rapidly. One characteristic feature of the Croatian market was that it was dominated by local companies. We were at that time the only foreign spare parts distributor developing dynamically alongside two larger domestic players. We introduced a multi-brand offering, which was received very well by the market. Customer loyalty does not come by chance – it is the result of sustained work on quality and trust. Service centre owners are convinced that what matters most here is the high competence of their teams. Mechanics who can quickly and accurately diagnose a problem, offer sound advice, and
CUSTOMERS APPRECIATE NOT FEELING ANONYMOUS AND SEEING THAT SOMEONE HAS GENUINELY ENGAGED WITH THEIR SITUATION. THIS COMBINATION OF EXPERTISE AND RELATIONSHIPBUILDING MEANS THAT INDEPENDENT SERVICE CENTRES WIN CUSTOMERS THROUGH SOLID DAILY WORK THAT SIMPLY STAYS IN PEOPLE’S MINDS
The human dimension also matters enormously. Customers appreciate not feeling anonymous and seeing that someone has genuinely engaged with their situation. This combination of expertise and relationship-building means that independent service centres win customers not through advertising campaigns, but through the solid daily work that simply stays in people’s minds. Croatian workshops constantly grapple with a shortage of qualified
carry out a repair effectively earn
staff – though that is probably a pro-
the respect of their customers.
blem that appears in every country.
I do believe, however, that it is more acute here than anywhere else in Central Europe. Yet what is truly surprising is the attitude towards trainees: on the one hand, many workshop owners say they are reluctant to take on apprentices or interns, and when they do, they assign them only the simplest tasks unrelated to repairs. On the other hand, those same
their staff most need. These costs cannot be counted as employee remuneration, but they do represent a burden on the business and are an investment in human capital.
workshop owners are convinced that this kind of cooperation is precisely what increases the chances of finding future employees. This shows that the potential of this approach often does not translate into practice.
nal sense of fighting for the customer. Many expect the overall number of workshops to increase. This is quite an interesting perspective, since it diverges from the mood in other countries in the region – with the possible exception of Bulgaria. It stems from a straightforward observation: the vehicle fleet is not only growing but becoming ever more diverse. New technologies are appearing, different service needs are emerging, new types of repair are arising. All of this means demand for services is growing. As a result, as workshop owners argue, there will not only be no shortage of space in the market – there may even be more of it, though naturally the requirements in terms of service quality and specialist knowledge will keep rising.
Worth noting: staff wages, however. In this respect our workshops are among the leaders of change in the countries of our region. I am not referring to the absolute level of wages, but to their rate of growth. Over the past year, percentage wage increases in Croatian workshops have been the highest of any country – though this does not mean we lead in absolute terms compared with other countries. On top of that, workshops here invest relatively heavily in the training
Among our customers – primarily Croatian workshops – there is a prevailing view that competition will intensify, though not necessarily in the traditio-
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AF: On the other side, there is growing pressure around ESG – sustainability, environmental and
GK: And what of e-commerce, which in the parts market has long since ceased to be a curiosity?
social responsibility, and corporate governance. For some companies it is merely an obligation; for others, an opportunity. Is ESG genuinely a driver of change in the aftermarket, or more a set of regulatory formalities to be ticked off?
Customers buy online, compare offers, and expect lightning-fast delivery. Is that the direction the entire market will take? Will the traditional salesperson-to-workshop relationship still have a place, or will it be displaced by digital selfservice?
MO: For me personally, it is an important consideration. We operate within an environment, a natural world, and we must be aware of the impact we have on it. Regardless of sector, every company should take this into account. The economic case must remain the priority, however – a company must first survive and have the resources to continue developing. A significant proportion of environmental concerns have very strong business justification. Investment in renewable energy and returnable packaging pays back quickly. Investment in producing extensive reports – required only of certain large companies – is, in my view, a distortion of the idea of competitiveness. Suddenly, entities operating in a particular region such as the EU, or of a particular scale or structure such as large listed companies, are operating under different rules and bearing additional costs. That discourages engagement and creates a poor atmosphere around the whole topic.
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MO: We need to separate two distinct things. E-commerce is not synonymous with rapid delivery and efficient service. In reality, e-commerce today offers the worst service in the market – payment upfront, delivery at the earliest the next day, difficulties with returns and warranty claims. The B2B channel, where the distributor has a direct relationship with a professional – the workshop – guarantees a level of service rarely found in other industries: enormous availability, near-instant delivery, payment terms, training, technical support, and so on. AF: There are also voices suggesting that the aftermarket faces a transition into a digital ecosystem modelled on Amazon – one platform, one login, the entire offering a click away. Is that a realistic vision of the future, or an oversimplified and dangerous path that could destroy the complexity and value of relationships in this industry?
As I see it, the aftermarket can operate very efficiently and effectively while taking into account the
MO: I do not see how that scenario could be realised. The keys are the breadth of the parts range, logistics, and the geographical spread of workshops. In our industry, stock must be close
needs of society and of our planet.
to the workshop in order to organise
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172 delivery within one to two hours – a standard that will become even more important in the future as mechanic
comfort, their confidence that they will make it to work or on holiday – all of this depends on their vehicle being
wages rise, as I mentioned earlier. The major e-commerce companies primarily offer courier delivery. While same-day delivery services are emerging in the consumer goods space, they operate in urban areas with high population density. Workshops are typically located in less urbanised areas. In my view, the current development trajectories of large e-commerce players and automotive aftermarket distributors are two diverging paths with very few synergies. The evidence is there in the American market – the birthplace of e-commerce companies. Despite announcements of expansion into automotive e-commerce, dedicated parts distributors such as AutoZone, O’Reilly, and Advance Auto Parts are the market leaders and are setting the agenda. Amazon, on the other hand, has a genuine oppor-
in good working order. The vehicle is a critical piece of equipment in our daily lives. Such a piece of equipment is placed in the hands of a service centre that must earn trust. Many workshops understand this, and those workshops are growing and gaining market share. There will always, however, be a place for service based primarily on price. A pricing strategy is an option for that narrow group of workshops that are unable to build on quality.
tunity in the area of driver-oriented products – accessories and the like. GK: Many experts say that a workshop today is not just about repair – it is about the experience the customer takes away. Simply replacing a part is no longer enough; a relationship must be built. Why is this way of thinking still so difficult to embed in many workshops? What could change it?
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AF: The model of collaboration between distributor and workshop has also changed enormously. It is no longer simply a „supplier and customer” relationship – increasingly, it is a partnership in business. Will this model continue to develop? Can one envision an even deeper level of collaboration and integration? MO: Yes. I believe the industry will continue to develop new tools and services that improve the efficiency of workshop operations – we discussed many of these earlier. In addition to solutions such as remote diagnostics and waste collection, there is much room for joint work on appointment scheduling and building tools to improve customer relations and communication – workshop management software, financial tools, accounting, for example.
MO: I agree with that statement entirely. The customer – the driver – is entrusting their vehicle to the workshop, and that vehicle is often the most valuable thing they own after their home. The safety of their family, their
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INTER CARS POLAND FEBER
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WITOLD KMIECIAK Member of the Supervisory Board of the Inter Cars Capital Group, Chairman of the Inter Cars Foundation Board. A graduate and academic staff member of the Warsaw University of Technology, he served as director of the Polish representative office of Sachs Handel GmbH/ZF. He sat on the management board of Inter Cars S.A., where he was responsible for the commercial vehicle segment. He served as President of the Management Board of Feber and Q-Service Truck.
Witold Kmieciak The commercial vehicle parts segment has its own particular characteristics, which is why so few distributors manage to achieve success in this market. Components for commercial vehicles are considerably more expensive than those for passenger cars, they turn over more slowly, and on top of that their availability must be high – because a transport company owner whose vehicle has broken down cannot wait long for parts to arrive, since every day of downtime means severe financial losses. As a result, the price of the part itself becomes a secondary consideration, while what becomes paramount is its quality, so that the replacement component delivers the maximum possible mileage. The economics are straightforward: that using a more expensive, higher-quality part is less costly in the long run. From the distributor’s perspective, meanwhile, maintaining a warehouse of expensive, slow-moving parts requires the commitment of very considerable resources – something that very few companies can sustain.
YOU NEED A COMPREHENSIVE KIT RANGE FOR SPECIFIC VEHICLE REPAIRS, TOGETHER WITH COMPETENT PEOPLE WHO KNOW HOW TO SELL THEM
Around the turn of the millennium, a significant technological leap in truck manufacturing was driven by stricter emissions standards and fuel economy requirements, which presented the aftermarket with new challenges but also new opportunities.
What is the recipe for success in the commercial vehicle parts market? It is essentially straightforward. You need a comprehensive kit range for specific vehicle repairs, together with competent people who know how to sell them. In this segment the salesperson is also an advisor, so building
the major overhaul of a given engine, and you have a complete kit available under one roof – which greatly streamlines workshop operations and reduces vehicle downtime for the transport company. The distributor in turn gains a satisfied customer and the prospect of a long-lasting business relationship.
a team of specialists is a key priority. I have always attached enormous importance to the completeness of parts kits – ensuring that a workshop can buy everything it needs for a given repair, including every small component. I raised the point at every opportunity, to the extent that I acquired a nickname: colleagues in the corridors called me „Complete Kit.” Nobody, however, disputed the obvious – that it is, for instance, complete nonsense to keep four pistons for a six-cylinder engine in the warehouse, because these are slow-moving parts. Slow-moving they may be, but when they are needed, they are usually needed for all cylinders at once. Add to this all the components required for
As I mentioned, selling commercial vehicle parts requires specialists. The same staff who handle the passenger car market day to day cannot do this. Commercial vehicle workshops are acutely sensitive to the competence of the salespeople they deal with, and are unwilling to work with those who cannot tell the front from the back of a truck. Specialists in commercial vehicles are few, so it is not feasible to have them in every branch. The solution is a commercial vehicle competence centre, through which commercial customers always have access to specialist advisors who can correctly identify and select the right parts.
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177 These are just some possibilities. The workshop will achieve the greatest return by concentrating on what it
exist for people – for drivers and their families. And when we are doing something for people, emotions and
does best: accurate diagnosis and competent vehicle servicing.
relationships matter. We all spend a great deal of our time at work. Regardless of whether a company is large or small, we do it far better when it is our passion. Efficiency matters – and businesses where efficiency is itself the passion of the people who work there thrive.
AF: A more personal question to close: in a world where data, automation, and digital metrics are playing an ever-greater role – is there still room in our industry for emotion, passion, and human relationships? Can the aftermarket still be „human”?
Thank you for the conversation.
MO: Maintaining that balance is vitally important. There is more and more data, and therefore it is becoming harder and harder to make sense of it. That is when intuition comes to our aid. The vehicles we look after, together with workshops,
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