Expansion, Innovation Ensure SuccessSat, 09/01/2018 - 11:43
Q: What factors influenced Mikel’s results in 2017?
A: Mikel’s is constantly innovating in its product portfolio to meet our strict growth expectations. By the end of 2017, we grew our sales 14 percent compared to 2016, which was 2 percent above our initial expectation. Targeting the aftermarket in a more orderly fashion was a key factor to ensure growth and small retailers and shops have embraced our development strategies. At the same time, we approached new OEMs including Honda and we strengthened our relationship with Toyota, Kia and Hyundai. Overall, 2017 was a very profitable year for Mikel’s. We have tried to maintain a balanced portfolio between our aftermarket and original equipment segments and to this day, the former represents 65-70 percent of our operations while the latter makes up for the rest.
Q: Which development strategies have you made a priority?
A: We have made digitalization a key part of our development strategy, putting the final user at the center of all our activities. We still need to better understand the needs of the final client because our end goal is to have a multichannel distribution. Clients will be able to access Mikel’s products at a bricks and mortar shop or an online site and they will receive their products at the distributor’s point of sale or directly at their doorstep. Our commitment is to conclude our digital transformation by mid-2019. So far, digital sales represent less than 1 percent of our total transactions but through our new platforms and digital strategies, we hope to grow that number to 10 percent by 2020 and to 25 percent in three to four years.
Q: How has the Certified Mikel’s Shop business evolved and what are your expectations for this project?
A: Our franchise business has been quite successful in the market and as of July 2018 we have already opened 53 stores in 16 states with the last being in Puerto Escondido. These franchises have been a key element in approaching the end user more successfully, strengthening our presence in the country and ensuring our position as a brand. In terms of our relationship with large retailers, we have collaborated with them for over 24 years. We know this market and are aware of the growing demands of these partners. However, the clients we approach through these channels are not experts in the segment so most of our sales are of conventional, nonspecialized products.
Q: How has the deceleration in light-vehicle sales impacted Mikel’s’ operations and how does that impact your growth projections for 2018?
A: We have consistently grown at double-digit rates for the last 20 years but the first half of 2018 has been difficult. Our sales have remained stable although we expect results to ramp up in the second half of the year, mainly thanks to our relationship with OEMs and our operations with large retailers.
Regarding our growth outside of Mexico, we have seen good results in Uruguay, Colombia and Central America. Our plans in the US are on standby, although we are meeting with some investors who see a possibility to build a partnership with Mikel’s to substitute Chinese imports. Even amid NAFTA negotiations, we have seen interest from US investors in the country and although we expect changes in the treaty’s rules of origin, our forecast is that any changes will be for the best. Furthermore, although there might be an impact on automotive exports after these new trade conditions, our operations focus mostly on domestic production.
Q: What is the next step in Mikel’s’ innovation strategy?
A: Mexican companies should be ambassadors of quality and specialization in product development but they should also be a standard in testing and validation. Mikel’s facilities are currently the authorized laboratory for bottle-type hydraulic jacks by the General Norm Direction and the Mexican Entity of Certification. Moreover, we are already in the process of certifying our operations for testing of rolling hydraulic jacks, hydraulic booms, slings and reflecting triangles. We are investing in strengthening our processes and having state-of-the-art equipment to ensure the best quality in our products.