Availability Over Price: the New Market Standard

Q: What are the main challenges for companies participating in the Mexican aftermarket?

A: The market’s complexity demands reinforcement in marketing and product management so companies can develop proper strategic business plans that feature a deep analysis of the company’s target markets and its priorities to consolidate its brands in the market.

The way we do business is another challenge altogether, as younger consumer generations change trends giving more importance to online business. Auto part players must invest in new technologies, marketing campaigns, market research and human resources that bring different and innovative approaches to service and how the company connects with existing and potential customers.

Q: What opportunities do you see in the growing domestic vehicle park and the new brands entering the country?

A: The auto parts markets is highly dynamic, mainly due to the increase in the number of car brands and models available. This represents a challenge for all players in the aftermarket and distribution sectors in terms of availability and flexibility to provide adequate services to the customers. Specialization by brand or by mechanism could be an option for companies to solve this problem. That way, players can focus on specific sales and market share targets, providing a complete product portfolio for a selected niche. The best opportunity for aftermarket companies is to couple specialization with an innovative product portfolio, supported by a healthy distribution network and a strong marketing and production management plan that includes an online strategy.

Q: How has HELLAMEX integrated specialization into its corporate strategy?

A: HELLAMEX' strategy was defined 5 years ago. Our goal was to consolidate our brand in the Mexican aftermarket. We did an intensive analysis of our product portfolio and developed the strategic plan for product categories where we saw the best opportunity to grow in the different markets. As a commercial branch of the HELLA Group in Mexico, HELLAMEX decided to focus mainly on lighting, electric and electronic products, as well as components coming from our two joint ventures. One of them is focused on thermal and cooling systems as a result from a collaboration between Behr and HELLA that spurred the Behr Hella Service brand. The other is a partnership between HELLA and Pagid, resulting in Hella Pagid Brake Systems.

Our venture with Pagid is a perfect example of our specialization strategy. After analyzing the Mexican market, we realized we could not satisfy the needs of European, Asian and American brands at the same time. When we launched the Hella Pagid Brake Systems brand, we decided to only focus on European automakers and we established a promise to satisfy the demand from these vehicles. We understood that by focusing just on this market segment, some distributors would not want to do business with us. However, specialization has also become a trend among wholesalers and we found suitable partners to commercialize our products with success. We are now in the process of integrating a product portfolio oriented toward Asian brands and our goal is to be as reliable as possible for that specific niche.

Q: How has the client mindset changed and how has that affected aftermarket players?

A: The aftermarket had always been characterized as a price-driven segment and companies tended to focus purely on offering low prices to maintain their competitiveness. However, this trend has changed and now availability is the main driver for a company’s success. Especially among retailers, availability is key to maintain customers’ loyalty. Price has now taken a backseat in the consumers’ mind and even quality has climbed up the ranks on the clients’ list of priorities and is now just as important as availability.

Aftersales services have also grown in importance, as well as marketing strategies supported by online tools to make the purchasing experience as smooth as possible. Consumer behavior has changed and we should focus on the buyers’ needs and how to do business with them using all available technologies to make their experience easier and faster.

Q: What role do you expect digital trends to play in the development of the Mexican aftermarket?

A: One of Hella’s priorities to remain successful in the country is to develop a strong online platform. It is now time to create a strong digital strategy if we want to be competitive in the years to come. We must update the information on our webpage on a regular basis so users, spare-part dealers and distributors can take advantage of our catalogue and offer a better service to their own clients. At the same time, we are working on our response time regarding warranties and purchase orders, making availability a core value for the company.

Technology will be crucial for companies and for the industry to develop more business and increase customer satisfaction. Digital databases are important in this process, linking all new products to the vehicles they are destined to. They also provide a clear connection between clients and distributors, helping companies to properly track availability.

Q: What position does HELLA enjoy in the Mexican market and what is your strategy to deliver brand awareness?

A: Although it is difficult to establish our true position in the market because of the number of product categories we manage, we are certain that HELLA enjoys a significant share of mind. The final consumer identifies HELLA as a leading brand with high quality standards. We have gained such a presence in Mexico that our share of mind is even greater here than in other European markets.

We strive to maintain our processes as cost-efficient as possible but we have no interest in competing with lowcost and low-quality products. Therefore, we must ensure that clients understand HELLA is the best alternative both in quality and total cost of ownership. We have invested in training for our technical staff to support our clients in the best way possible, showcasing the advantages of using a quality product, and we try to keep in close contact with our customers as much as possible.

Our goal for 2018 and 2019 is to consolidate our product portfolio and our retail operations in the Mexican aftermarket. Our exports to Latin America are limited but retail and our business relationships with companies such as AutoZone and Walmart have opened a new door for us. We also see an opportunity to grow in a segment we call Special Original Equipment, supplying non-exclusive parts for OEMs that have low production volumes. At the same time, we want to grow our business in different industries like mining, construction and special vehicles.