Specialty Databases Building Foundation for Industry KnowledgeTue, 09/01/2015 - 15:31
Q: When did JATO decide to enter the Mexican market and what were the reasons behind this decision?
A: JATO has been operating in Mexico since 1995 and our decision to enter the market was mainly a result of two key influences. Firstly, the Mexican industry was in an extremely promising position at that moment, and secondly, the company was investing in expansion projects in several markets. Mexico had also just signed the NAFTA agreement with Canada and the US, which signaled the start of more business in the automotive industry as well as a need for proper information about the market.
Q: What advantages do JATO services offer over other research and consulting companies?
A: JATO’s main advantage is that we are involved in the entire production chain, meaning we have information available from the moment the vehicle enters production until the moment it reaches the final consumer. Our databases include information about sales and production volumes, and we are able to arrange this data according to make, model, and model mix. We have specific information regarding prices, whether they are cash prices, net prices or financing prices, and we also manage data related to incentives and discounts offered by dealers or manufacturers. Additionally, we provide aftermarket information including service, maintenance, repairs, depreciations, and all other costs related to ownership. In terms of sales, our database includes all cars that have been sold through financing, leasing or auto-financing instruments. We manage this data for more than 80% of the credit institutions in the country, and we are the only source for that information in Mexico.
Q: How do you take advantage of your global network to build new business in Mexico, and how do you approach smaller companies in the local market?
A: That is the heart of our strategy. Given that JATO has a worldwide presence, we are able to establish global corporate contracts with most companies in the industry. We normally sign these contracts at the customers’ headquarters and include our services in all countries where they operate. On top of this, our customers take advantage of the standardized data that we offer, as it gives users all over the world access to exactly the same information in the same format. Regarding smaller companies, we normally customize solutions to their needs, synthesizing information and narrowing it down to precisely what the company requires for its operations.
Q: As Mexico’s automotive industry grows, what new opportunities has JATO detected in the market?
A: We have recently introduced three new products to the local market. The first is a forecasting tool for vehicles, which provides an insight into market potential for sales. The second one is a complete solution for analyzing the TCO of a vehicle, as well as how it will affect the final consumers, leasing companies, and manufacturers. Finally, we have created, for the first time in Mexico, the most complete and accurate database containing a calculation of the total number of cars circulating in the country. This database is divided by state and municipality and includes a selection of specifications that allows automotive analysts to calculate market potential. These tools will provide a better insight into the industry, as well as helping our users to better understand the Mexican automotive market. The biggest opportunities will arise from working with OEMs, their suppliers, and financing and leasing companies in Mexico. We are currently working with all the manufacturers and importers in Mexico, as well as those on their way here, and are related to around 80% of the leasing companies, banks, and automotive financing institutions, not to mention some of the country’s most important insurance companies.
Q: What new trends has JATO detected in the Mexican market, and what challenges are OEMs facing these days?
A: Our systems and databases are specifically designed to understand the Mexican automotive industry and how a new product should be introduced to the market. For example, our JATO V4 product is designed for the introduction of new vehicles, comparing them to their closest competition from other companies. The client compares the specifications of the new vehicle, the prices and incentives of other companies, as well as the different consumer options to obtain the real price at which the vehicle should be sold. With this data, the client can predict the competition for the product, and define the optimal production volume for the market. All these factors create a proper financial analysis, which will determine if the product will be successful in the market. Our clients use this tool every time they launch a new product and every time they need to revisit their marketing strategies. Today JATO is the only company that can provide a complete database to carry out this type of research.
The first challenge to tackle is that competition has grown significantly in the automotive market; 30 years ago there were only five brands of manufacturers, but now there are more than 30. This means that supply has expanded enormously, and the quality across the different brands has become rather similar. Therefore, the challenge for all these companies is to offer better cars with more attractive features and more incentives for the final consumer. However, these companies also have to compete with imported vehicles from the US. Nowadays, there is a new car for every vehicle imported from North America; this is a terrible proportion, and poses a challenge for the government to create better regulations. In terms of exports, the main challenge is to continue building successful FTAs with other countries. Mexico currently has agreements with Brazil and India and other important markets, but many revisions have to be made in order to improve our export operations to those regions. For production operations, we provide data regarding volumes in Mexico as well as other regions, allowing manufacturers to calculate how much they need to produce for each market.
Q: What products have you developed for sales and aftersales services, and how are they changing the paradigm of the Mexican market?
A: We have a product specifically directed at dealerships, which is designed to offer the appropriate information to their salesforce. This database includes all the necessary information to promote a vehicle with the final consumer in the most effective way. We have electronic, paper, and web solutions including car specifications, incentives, key advantages against competitors, and data regarding car components, service, repairs and maintenance costs. With this information, we support the dealerships to professionalize their salesforce and to create a consultative sale of the vehicle. Additionally, we provide specific information to dealers and manufacturers regarding commercialization of the aftermarket. JATO performs analysis related to maintenance, service, and repair costs, in order to compare a company’s aftermarket value against their nearest competitors. We also have data regarding the difference between maintenance and repair costs per state, per dealership, and even per type of service. With that information, our clients can do a general revision of their costs every time the market goes through a new cycle. We have been offering this service for more than ten years, and we have given our clients an insight into how the industry has changed over time.
Q: How are JATO’s solutions helping leasing services expand in the market?
A: While specifically targeting leasing and financing companies, we offer data regarding all models sold in Mexico. That way, when a fleet management company seeks any type of information, our clients only have to do a quick search of our database to find the information. We are currently collaborating with approximately 60% of the leasing companies in Mexico, while keeping our information updated on a daily basis. Part of JATO’s service is providing data on how many vehicles have been sold through leasing services. This was introduced two years ago and we are currently including information from ten companies in the market. Furthermore, we are offering our TCO systems and databases to the leasing companies, which provide them with all the information they need to support their business. Our clients use this data to compare different vehicles in the same segment, helping them to provide the most suitable product to the final fleet user. Some of our customers already have their own systems, but they use our information to feed their databases in terms of service, maintenance, repairs, components, insurance, depreciation, and residual values.
Q: What is JATO’s approach to serving the heavy vehicle market?
A: We are currently focused on the light vehicle and light commercial vehicle segments, but we have started some research in the heavy vehicle market. There are a lot of opportunities in this segment, but we still need to talk to the companies in this market to establish their needs in terms of market intelligence. During this process, and through our normal information acquisition operations, we always collaborate with the different associations and dealers related to the market, as well as with every governmental institution interested in acquiring this information. Nevertheless, that does not mean that we always commercialize the information, since sometimes we provide it as part of a data exchange or collaboration programs with different private and public organizations.
Q: What are your expectations for the coming year?
A: We are optimistic and have forecasted that the automotive market will see double-digit growth this year. Our main priority now is to create new solutions for the aftermarket and auto parts manufacturers, as well as for the leasing and financing sectors.