[European Atlas] Overview of Spain

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Margins that are melting but costs, especially those due to unreasonably regular delivery demands, that are not being reduced? An explosive cocktail in a 2018 spare parts market that is weak with growth estimated at 1.9% overall - 1.7% increase in IAM and 2.2% in OEM (source Infocap). Now mature, Spanish business remains marked by its fragmentation and low yields. To try and find profitability, which fell by 30% during the crisis, some opted for costly but faster external growth in preference to organic. Recambios Gaudi for example, which is combining the purchase of sales points with the reinforcement of its central logistics setup, the extension of its network with the creation of its own locations and, since 2018, the development of a franchise.

Independence continuesExcept that these small steps do not yet pave the way for the creation of a large Spanish financial group. In fact, the Spanish distributors seem to prefer cooperative solutions to pool purchasing power while remaining independent. By creating Recambista Ibero in 2016, Cecauto and Impormovil led the way. The most recent "commercial" merger is between Groupauto Union Ibérica members, Établissements Coll from Catalonia and the Andalusian group Peña. In the same group, Suvima, Voltamper and Euma are already part of a cooperative structure. There remains the case of AD Parts Intergroup which sees PHE (formerly Autodis) as the first of the Big Three to (discreetly) enter the Spanish market. If LKQ and Alliance Automotive Group / GPC have made their interest in the Spanish market clear, they are waiting for significant entities to be created; that is those posting a turnover of at least €200 million according to Jean-Jean Jacques Lafont of AAG and with a national network. According to Lluís Tarrés, the managing director of Serca, fragmentation but especially the lack of coherence of the figures published by the potentially buyable companies is slowing down the consolidators. Good news for distributors wishing to continue to grow quietly, less good for those who could do well to be absorbed.Caroline Ridet

Spanish consolidation for Autodistribution. After taking a joint stake in October 2017 in the capital of Grup Eina (training, technical support and data management), PHE (formerly Autodis Group, €1.2 billion in consolidated revenues in 2017) and AD Parts (27 distributors for 525 sales points in Spain and Portugal generating €725 million in turnover) are taking a new step in their merger. They have just created AD Parts Intergroup. This company, owned 50/50 by the two entities, is jointly run by Stéphane Antiglio, president of PHE, and Josep Bosch, president of AD Parts. The headquarters of this company are located in Riudellots de la Selva, Girona. Created in the spring, the structure is initially a "reservoir of ideas" with the objective of sharing the best practices of each entity to strengthen their positions in their respective markets "which have very similar operations". But Intergroup AD Parts will clearly have to move up a gear later to become a more established force.

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After nearly a year of collaboration, Peña Group and Etablissements Coll have decided to create a joint venture. The objective is to pool management and purchasing processes to regain the margins lost due to the intensification of competition. This cooperation brings a total cumulative turnover of €130 million and becomes a Spanish leader in multi-brand distribution. The two groups together have 29 sites located in Catalonia, Andalusia and south of Castilla-La Mancha. They are both members of the group Auto Union Spain and wanted this intelligence alliance with the other members in order to "strengthen the group and not divide it". "We can be a force to bring together other OEM partners. We want to strengthen through cooperation, to become more united, in purchasing and business strategies" says Pep Gironès, commercial director of Etablissements Coll. A union that needs to be strong in a sector that is still very fragmented and under pressure.

A partner of choiceAnd what is the reaction of suppliers to the combination of the two entities? "They must not see us as two companies that came together to ask for more, but as two companies that have united to be the best partner or ally who with our presence and our affinity will develop their products on the market" reassured José Luis Montes, deputy CEO of Peña Group. This is not dreaming, it’s all about concentrating suppliers and increasing volumes, "it’s not just about buying sales points. We are not looking for one-off operations with suppliers, but a partnership with a strategic vision to identify us with the brands that correspond" adds Pep Gironès. In addition to purchasing, Alliance CP Services should pool marketing, logistics and sales.
A long-term projectBased on their mutual strengths, the bosses of Coll and Peña want to develop the business in the agricultural and industrial sectors. On the other hand, the two entrepreneurs do not seem ready to welcome other shareholders in Alliance for now. "Common sense tells us that we need to make sure that the ’marriage’ goes well before making any other move. This means excluding any expansion of the company in the short term" assures José Luis Montes. A prudent approach agreed with Javier Morral, Coll CEO. "This project is designed for the long term. We must move step by step and consolidate the alliance." We will not jump steps at the risk of losing momentum in a market that we all know is closely watched by the US consolidators and where it is essential, more than ever, to strengthen our position.Partnership with Miguel Angel Jimeno - Talleres en Comunicacion