Balanced Catalogue Ensures DiversificationSat, 09/01/2018 - 11:45
Q: What sets Autopartes Calderón apart in the Mexican automotive aftermarket?
A: Autopartes Calderón buys directly from the most prestigious brands that manufacture quality spare parts in Mexico, while also importing discontinued products from Asia, Europe, South America and the US. For instance, the light switch of an old Volkswagen Beetle Sedan or a classic Ford Mustang are no longer produced in Germany, South America or Mexico. Taiwan is the only place where these products can be found with appropriate quality. The country’s vehicle park is on averages 18 years old, so there is still a decent market for older components that have disappeared in other countries with younger vehicle parks.
Q: What are the main areas of opportunity for growth in the Mexican aftermarket?
A: Mexico City’s vehicular emissions testing program became nonmandatory for six months during 1H18. This process harmed our ability to reach our growth expectations as fewer people took their cars for repairs to meet emission requirements. We expect that when this testing program is again implemented, the aftermarket will regain its lost momentum.
The aftermarket business has become increasingly complex as vehicle, model and version variety increases but production volumes are reduced. Some decades ago, there were only five brands in the Mexican market and most spare parts were relatively similar. Now, there are up to 50 different versions of some vehicles sold in Mexico. A company looking to supply for every vehicle that exists in the Mexican market including used models imported from the US has to keep over 100,000 components in stock. Achieving this stock level is difficult but some distributors have managed to do so and they sell their components above market prices because they are the only ones that have such parts available.
Q: How is Autopartes Calderón’s catalogue divided between Mexico-made components and imported parts?
A: Around 40 percent of the products we sell are imported and the rest are procured locally. We only import components that are not produced in Mexico and cannot be found in the local market. Autopartes Calderón is not in the business of competing against Mexican manufacturers. On the contrary, we prefer to buy from local companies if possible. There is no point in importing oxygen sensors from China because quality counterparts are produced in Mexico.
Q: How important is digitalization for Aupartes Calderón?
A: We are aware that digitalization is the future so the company is in the process of renewing all its digital systems. We are changing our corporate image and updating our search engines. E-commerce still accounts for a minimum share of our sales but that is where the spare parts market is headed. Autopartes Calderón focuses mainly on wholesale and has several sales points in central Mexico, so clients often browse our catalogue online and purchase the parts they need at one of our stores. End users generally prefer to purchase the part as soon as possible to get their vehicles back on the road. In some cases, drivers may be willing to pay a high shipping price and order online just so their vehicles are back on the road immediately. Less than 10 percent of our digital operations are export-oriented, although we have shipped to Colombia and Venezuela.
Q: How do you expect digitalization to impact the Mexican aftermarket and companies’ sales strategies?
A: Some spare parts and tire companies in Mexico have found great success in selling components over the Internet. Mexico has lagged behind the US in the auto parts segment, particularly against e-commerce players such as Amazon. The US has already achieved noteworthy online sales volumes but Mexico has fallen behind because of fraud and security concerns. Some of the challenges that Mexico faces to digitalize its automotive aftermarket are the high price of Internet connectivity and the difficulty in accessing smartphones and other devices. Millennials will change this trend and buy more aftermarket components using their smartphones.