A lot has changed in ten years, but many changes are not always noticeable as the industry adapts to the change. A sector in the Dutch car industry that has turned completely upside down in the past ten years is the parts distribution. Jos Veldhuisen, editor-in-chief at the Dutch Aftersales magazine gives us an insight into the dynamics of the Dutch automotive distributor sector.
"No man is an island entire of itself," wrote the English poet John Donne in 1624. Nor do the national aftermarkets. With parts, hours, services and data, they are part of a European playing field. The playing field of the parts distribution from 2010 can hardly be recognised in 2020. International upscaling and national consolidation have been the main causes. The European upscaling, driven by LKQ (Fource), GPC-Napa (AAG / Brezan) and Bain Capital (PHE / Doyen / Geevers), is not yet over, although it currently seems quiet at the takeover front.
"That will not happen in our country"
Ten years ago - in 2010 - most of the about eight hundred car wholesalers in the Netherlands went peacefully to sleep every night. The financial crisis was drawing to a close and people dreamed of a fantastic upcoming winter tire season. Although the investment group H2Equity acquired Sator from the ailing Kroymans group in 2009, this had not led to many ripples in the sector.
When in April 2013 the Americans from Chicago took over the Schiedam Sator from H2Equity, the car wholesalers in the Netherlands first got to know LKQ. At the 2nd National Aftersales Conference in December 2013, organised by Aftersales Magazine, a British video was shown outlining the acquisition and growth strategy of LKQ-ECP in the United Kingdom with a nod to the Benelux. "That is not going to happen in our country," almost all parts distributors present responded. The parts manufacturers in the room were not at all reassured about that.
Reshaped distribution chain
Scaling up leads to efficiency gains. This means a reduction in the number of parts brands on the shelves at Fource and AAG. This is necessary anyway, because ranges are becoming wider and deeper due to the increasing complexity of cars. Parts manufacturers who are getting off the shelves are struggling to find a new place in the market. They can approach car companies directly, embrace web shops, or partner with the remaining distributors. Another option is to wait for the large parties to submit their tenders. This is at the expense of the margins in the distribution chain. The big winner thanks to competition between the parts-distributing market parties are the dealerships and garages, which can purchase their parts more sharply than ever. Or, and more importantly, they can count on a lot of support with regard to the marketing of possible workshop concepts.
Acquisitions and consolidation not yet done
Fource and AAG Benelux together now control more than 70 percent of the Dutch independent parts distribution. The other 30 percent is distributed to distributors and market parties who sometimes distribute their spare parts lines as second or third backups. In addition, they are the first supplier to supply the last approximately 100-130, mostly smaller, independent wholesalers who are left. It is generally expected that this group will become even smaller. And despite that trend, you can see that Polish distributors have been targeting the Dutch aftermarket for the past 2-3 years. Their pricing policy is a longer-term concern. On the whole, it can be said that the number of wholesalers in our country has more than halved in the past ten years due to all the acquisitions and the ongoing consolidation of the networks. It is assumed that there will be at least fifty more over the next three or four years.
About the author
Editor-in-chief at Dutch Aftersales Magazine