12 April 2021
At AIMS International, Global Practice we strive to be your best partner. To do so, we need to remain aware of your challenges. As a consequence, we feel the urge to stay connected. We investigate global industry trends, while keeping in touch with our local network.
With that in mind, the Global Mobility and Automotive Practice Members, headed by Olivier Legrand, met up -virtually- with Fotios Katsardis, CEO of TEMOT International, and we had the honour to interview Damien Germès, Regional President EMEA and Karin Mehwald, Director of HR at NGK SPARK PLUG, to share their perspectives from a distributor’s and automotive supplier’s side, active in the aftermarket. We will zoom in on HR-based challenges in an upcoming article.
“We are operating in a segment of the industry worth around 850 billion USD,” Mr. Katsardis says, “out of a total estimated industry value of 3.5 trillion USD. We expect the industry to grow – despite changes in mobility. Foremost because of the big growth in the Asia-Pacific region.” It comes as no surprise that the relatively young market (average car age: 8 yrs – the global average is 12 yrs) will see an increasing demand for spare parts. “Most importantly, we see a need for approaching each market in a specific way – while a global strategy is required, we need to alter slightly as we descend into regions – the EMEA-aftermarket requires an entirely different approach compared to the US-market”, Ms. Mehwald chimes in.
Mr. Germès agrees; “We not only need to make a technology shift – as these requirements and innovations, such as the rising popularity of EV’s and the upcoming Euro-7-norm, are time-sensitive, but we also need to face the cultural shift, before we are overwhelmed.”
The onset of Covid-19 has accelerated the digital transformation for both companies, but they also face new difficulties. “In 2019 we organised an event and arranged around 1.750 face-to-face meetups in just a day and a half. In 2020, we were forced to organise it virtually”, Mr. Katsardis shares. It was no easy task – as the industry’s struggle with eCommerce indicates as well. The industry is rich with technical, hands-on profiles, who weren’t taught the necessary skills to swiftly make the digital transition; digital literacy is a real issue. The economic setback for the aftermarket is massive, as well, as 2019’s numbers aren’t projected to be achieved again before 2023 – at best.
“We, too, have had to diversify – we have a global vision for 2040, and have our long-term management plan 2030, which includes an expansion from our core business which we have renamed ‘Mobility’, rather than ‘Automotive’”, Mr. Germès adds. Innovation is important, especially for ICE-dependant suppliers. “The aftermarket-side of business is drastically changing as well – the market potential decreases for wear and spare parts, amongst others because of an increase in Shared Mobility.”
Both parties acknowledge the need for data-driven decision making. Mr. Germès states: “We need to step away from the gut feeling-driven and relationship-based approach, and focus on what objectively matters with a key account management approach. Making shared knowledge easily accessible – knowing your customer, and accurately identifying their needs are the key factors for success in the near future. Long gone are the days of the traditional, door-to-door salesman.” Customer consolidation plays a big part in that evolution, demanding a much-needed balancing act between global and local strategies.
Mr. Katsardis confirms: “Data management has become so much more important across the entire manufacturing chain – we need to quickly access relevant information at all levels – we are organized in a way that divides our expertise across consumer-oriented and retailer-oriented spokespersons, sometimes even by type of vehicle.”
An additional layer of challenge is formed at the overarching, strategic level – groups, suppliers, tendering, stock and financial management have all grown in importance as a consequence of previous crises and leveraging means efficiently and effectively.
One thing both parties can agree on is the precarious field of telematics: who does the data belong to, and who should have access to what – and when? The insights generated by this information can help manufacturers identify problems in design, can assist vendors in terms of market needs and evolutions and can allow for end users to receive tailor-made service programmes – but privacy and data ownership prove to be a hindering factor.
The new normal has caused quite a stir in the industry, we at AIMS International will share our findings with you through our articles. If you have any questions, or have anything to add, feel free to reach out to one of the Global Practice Automotive Mobility-members:
Dan Mihnea Badiu
Or get in touch with our Belgian office by email at [email protected]
About the Authors:
Original article written by Olivier Legrand, Managing Partner AIMS International Belgium