July 10, 2017

Independent Automotive Aftermarket – Make or Buy

Traditional and family-run companies active in the Independent Automotive Aftermarket (IAM) are under great pressure. Adjustments and changes are necessary. Some organizations are investing in new markets, going abroad, others are adapted, merged and optimized. Large organizations from overseas with great appetite take over entire corporate groups in the European aftermarket. Private equity funds buy traditional companies in the automotive aftermarket, optimize them and sell them, etc.

As a former Managing Director of a family run company in the IAM, I am very concerned about these major changes in our market which create completely new requirements in terms of personnel development and the abilities of the management.

Another game changer comes form the technical developments affecting the car parts business, including necessary organizational changes in logistics.

Question: Can spare parts be sold in the same way as 5 years ago? The answer to this is simple: certainly not! The technical development of the vehicles, and in particular the connectivity and communication between vehicle, workshop and driver require significant changes in the sales and logistics processes. Because of this, employees have to develop a whole new set of skills.

In addition, organizational arrangements must be made. Is our organization ready and fit for the change? Do we have the necessary knowledge in our team to be successful in future too? Are we, as entrepreneurs and owners in the IAM, prepared for it? Everyone can answer this question for himself.

A friend and owner of a very successful company in the IAM shared the following view with me: Should I develop my own personnel and knowledge in-house –  as it has always been – ,  or should I hire and introduce external staff as a result of the strong changes in the market?

MAKE OR BUY, that is the question.

Bernhard Glaninger
Senior Consultant, Switzerland
Member Global Practice Team Automotive

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