[European Atlas] ADI gets ready for battle

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“The repercussions of the financial crisis of 2017 are now behind us”, claimed Thomas Vollmar, the president of ADI, at the summit which took place in spring this year. The 600 members generated a 15% increase in purchasing volumes through the alliance. Half of this growth was organic, while the other half stemmed from the acquisition policies of some members. The consolidation champion was PHE (formerly Autodis) which strengthened its positions in Belgium and Italy, followed by PartsPoint Group which accelerated its Dutch integrations and Belgium acquisitions. Finally, some ADI members in Eastern Europe bought up regional firms.
Resist the invader…This race to achieve critical mass aims to thwart the mass incursion of American spare part giants in the playground of ADI members. In Germany for example, the acquisitions of LKQ and GPC have already started to produce their first tangible effects. “Over the last 18 months, Carat has lost eight partner firms, representing a purchasing volume of approximately €70 million.” The chief executive of Carat, but also the president of ADI, therefore made a move towards logistically isolated medium-size wholesalers (even non-alliance members) who were considering selling up: give them access to group price conditions and deliver to them from his huge central warehouse. And in 2018, the organisation headed by Thomas Vollmar will open its intermediation web platform to point drivers and fleets in the direction of partner workshops. “Similar projects are also being deployed by AD Auto Total in Romania, Autodistribution France or AD Parts in Spain.”
… and regain controlAnother line of defence is Intergroup, the joint venture created by the French and Spanish organisations. In Sweden, the ADI partner inaugurated a gigantic central warehouse, and finally, AD Belux, headed by PHE, has evidently moved up a gear. “The signal is clear: we are taking back control.“ The globalisation of forces through 1Parts, a joint entity founded in 2014 with the American The Group, today offers the chance to share 14 suppliers. Muscling up has become an imperative. “Not a single firm seems to think that on their own they have broad enough shoulders to take on the challenges of the future.” This comment goes beyond purely the concentration of distribution and alludes to the acquisition of Federal Mogul by Tenneco following that of TRW by ZF. “Everything is becoming bigger and more complex, while at the same time a commando of start-up is literally itching to burst into our market and take it by storm with unprecedented commercial models.” This is compounded by the other big change in store for the vehicle fleet: connectivity. “In 2009, the challenges seemed to be almost overwhelming, and no one could predict how far we would fall. Today we could be tempted to say that these fears were certainly more trivial and simpler than today’s challenges, which are much more complex.” What a stimulating thought!Caroline Ridet