When ITGs become researchers

Are purchasing centres, which have gained significant importance over the decades, still relevant in an increasingly centralised global market dominated by multi-specialist and global equipment manufacturers, where distributors have also been consolidated? Seven international groups collectively cover the global parts business, comprising a consolidated business of over €140 billion among its members. This represents nearly 30% of the total aftermarket business generated worldwide!

Before the Covid-19 crisis, suppliers were frequently expressing annoyance at paying premiums due to the consolidation of volumes across all levels. However, in this disrupted environment, this background noise is becoming less noticeable. Because the aftermarket business has become more complex and the ITGs have been proactive in playing an expanded role. They have supported workshop concepts aimed at professionalising garages, contributed to digitalisation, and collaborated with IAM players in the fight for essential access to vehicle data. In short, they have been able to find levers to continue to create value, particularly for their members. "The ITGs provide us with a comprehensive global perspective. Even within our national market, this exchange of experiences broadens our horizons and fosters diverse viewpoints. It’s truly inspiring!", argues Fabrice Godefroy, president of IDLP, the leading French group of independents and managing director of the Alternative Autoparts group, a member of Nexus Automotive.

Above all, the ITGs have positioned themselves to support their premium equipment partners in their quest for growth opportunities beyond the highly competitive yet ultimately satisfying traditional circuits of mature Western markets. Except for ADI and Global One, which are still heavily focused on Europe (perhaps too much), the ITGs, who have European origins, have sought their fortune in these emerging and increasingly dynamic countries. Latin America, Asia and the Middle East offer so many new potential outlets for their supplier partners. “Equipment manufacturers are looking to develop market share and additional turnover. In contrast, our organisation’s distributors seek products that will foster profitable growth by providing access to brands that would otherwise be unavailable without the support of the ITG. Consequently, we play a crucial role in bridging the gap between these two expectations,” Philippe Baudin, COO of Amerigo International, reminds us.

This is particularly true for distributors established in these so-called “emerging” regions. Territories cleared and explored by Amerigo or Nexus Automotive, who have largely flourished there. The reality is that if equipment manufacturers continue to pay for consolidated volumes, it’s not to stabilise their business but to get it off the ground! Therefore, it’s not sufficient for ITGs to sign lucrative referencing agreements; they must also establish a presence on the ground. We have teams in Dubai, Turkey, China and Argentina. They are tools to win business on the ground", says Günter Weber, CEO and President of Groupauto International. Their mission as "prospectors" is also to alert equipment manufacturers who are sometimes locked into their Western certainties about the realities of the markets. "We are sounding the alarm to warn that we cannot adapt European recipes to the African challenge, for example," explains Gaël Escribe, CEO of Nexus Automotive International. The ITG must be able to explain to its equipment partners this agility in adapting to the unique characteristics of the parc, including purchasing power and consumption habits. Here again, this requires investments in human intelligence on the markets explored. In the event of supplier inertia, the ITG, whose client is also a member, will seek alternative responses to this market reality.

And then there is the rise of new technologies, and the first of these is electricity which requires rethinking its references, tidying them up and expanding them. "With globalisation and the profound change in our business, benefiting from the vision of ITG is even more essential. Nexus Automotive is seeking American and Chinese equipment manufacturers, the suppliers of the car manufacturers from whose offices they have become established in each of these countries. This is an expansion of potential references and therefore of access to products that we could not find alone in our domestic market. Today, this is even more crucial for a distributor. With the development of electrical technologies, our equipment partners may not be the same tomorrow. Because to prepare for what comes next, we must have a broader vision and seek out suppliers further afield", concludes Fabrice Godefroy.