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In the 1980s there was a deep change in car repair shop network system in Spain. They were operating as licensed shops and subsidiary or nonofficial
shops, the former directly dealing with car manufacturers and being authorized to sell cars by manufacturers, the later having little contact with
car manufacturers, their activity was mainly dedicated to repair cars and they could also sell a small amount of cars, which were mainly provided by
the licensed shops and not directly by car manufacturers. After that they have becoming car Dealerships and Agents.
The difference between the two states of the industry was that in the previous system cars were owned by car manufacturers (BMW, Audi, Peugeot, etc…)
and after the appearing of car dealerships and Agents, those cars which dealerships had in stock, after 45-60 days, were sold to them, they had to pay
the money for them regardless they had sold the car or not. To make it more clear, before, licensed shops could keep the cars not having to pay for
them until they sold the cars to the final customer. After this change, 45-60 days after they got the car, regardless they would have sold the car or
not, car dealerships had to pay the money for the car to the manufacturers. Excluding in some exceptions of car dealerships with enough economic
liquidity to face payments, the vast majority of these cars were owned by the banks because they were the holders of the documents. When a car was
sold, the repair shop had to pay the car value plus interests to remove the documentation from the bank. This stage, characterized by little
competition in sales, thereby plenty of work and cars to repair for each repair shop and also the fact that cars were equipped with old technology
favored that any repair shop could be an official brand agent. At the same time, repair shops located in large population towns were chosen by
different brands and elected as candidates for becoming their car dealerships, given that technologically they were not demanded a high technique.
After the 1990s, a big change in the structure of car manufacturers occurred. Following the split of manufacturers into new structures, even though
the new structures formed were still part of a same group, the number of car dealerships increased significantly. As a remarkable increase in sales
it was foreseen, new brands appeared in the market within a general scenario of Spanish amazing and continuous economic growth favored by tourism
and construction boom.
In 1991, Autoxuga was established, and promoted “Subscriber customer” system, so that repair shops could survive and go through a small crisis which
was originated by the “Gulf War” and the fall of Berlin´s Wall a few years earlier, which led to investments from developed countries were moved to
East European countries which were falling behind.
It was in 1994 when Autoxuga changed into a Private Limited Company. In its founding 21 Official Services participated. Autoxuga’s business model at
that time was based on developing management and accounting software, both integrated into the same software. Besides a Central stock warehouse was
created for the storage of auto parts. These were bought directly from the factories.
Subsequently several auto parts stores made an alliance, forming Purchasing Groups as we know it today. In 1999 there were sold in Spain around
1,300,000 cars with an increasing growing trend, due to economic growth and the adoption of Euro as Spain´s national currency.
In the first decade of the new millennium, we could distinguish two very different stages. The first one, between 2000 and 2005: after the adoption
of Euro currency and because low interest rates it started to develop a fictitious economy featured by money waste, which led to that in 2005 they
were sold over 1,600,000 cars in Spain. This made many entrepreneurs of the car industry excessively debt after building luxurious facilities which
years later would cause them problems due to lack of economic liquidity. The second state, after 2006. The Spanish State, which at that time had a
debt of 39% of its GDP, which is a measure that expresses the production of goods and services inside the country for a year, reached in the 2010 a
debt of 61% of GDP. This was because of lavish and monumental public infrastructures, with similar characteristics in the private sector. This
increase of the debt was funded partially by savings banks where politicians had control and influence.
It wasn´t till 2008 when the huge economic crisis in Spain occurs, leading many savings bank to the bankruptcy and creating a state of lack of
credit to entrepreneurs. Because of this car sales decreased almost 50% and so many car dealerships and car repair shops were forced whether to
close or to balance their templates (firing employees) to make them viable， which made unemployment rate to increase from 9% in 2005 to 20% in 2010.
In this stage of global crisis some brands with economic solvency, but with little economic liquidity, thought as a solution to rescue car
dealerships located in major cities guaranteeing the continuity of these dealers so that their brand was represented in the area.
In other cases some dealerships that were supposed to have economic solvency were forced by brands to buy and rescue other car dealerships about to
fall. At present, these car dealerships who chose to occupy more market are close to crack, because customer of new cars after Warranty´s period
flee their facilities since repairs are too expensive for them, given the shortage of money and actual crisis. This situation will probably not be
overcome for next 10 years. With a public debt of over 100% GDP by 2014, the actual crisis will cause changes in all sectors specially in the car
industry.
CAUSES OF THE ECONOMIC CRISIS
-Decreased of Bank Credit
-Decreasing Of Sales
-political, legal, economic and social disorder situation
-economic precariousness
-Increase of Delinquency
-Lack of consumers confidence
-Lack of confidence in a prompt economic recovery
ECONOMIC MODEL WE USED TO ENJOY HAVE GOT TO END AND WILL NOT COME BACK
After 2010 the scenary of economic disaster is consolidated in Spain on both unemployment rate and bank credits, leading to a stagnation of the
economy. This made many car dealerships shops to be unsustainable. Car manufacturers，not having sufficient benefits due to the fall of new cars
sales, for their survival, tend to eliminate official stores. On the other hand Auto Parts distribution groups promote franchising to attract car
dealerships, repair shops which have finished their compromise with their official brands and also some multi brand repair shop which owners still
believe that colorful advertisements and well known franchises will attract new customers.
But what brands and Parts Distributors haven’t considered is to reduce or eliminate intermediaries in the supply chain. As good reputation as they
might have, in a scenery with such a systemic crisis, requiring competitive models which are able to reduce bureaucracy and eliminate old-fashioned
management systems, success is to be achieved by changing business model. We must learn as quickly as we can to adapt to a changing market to be able
to make our business survive.
Actual business model and systems were developed 30 years ago, inside them there are too many intermediaries (import-export, wholesales, retails…)
in both the supply chains of automobile manufacturers and Auto Parts wholesale groups. There is no choice but to drastically eliminate
intermediaries to be competitive in a global market where internet is a key factor. We have to adapt to new forms of business, in an increasingly
aggressive market. Profit margins need to be cut down.
Recalling an old Spanish proverb saying: “good clothes even into the ark are sold” (meaning that quality products with good reputation are not
difficult to sell). Several centuries ago, silks and products came packed. When customers came, the shop assistants should open the box in order
to show customers the products. But for those had extremely good reputation products, customers would buy them even without opening the ark in
where they came packed to look at them. This is now completely obsolete and has no place in modern times because many customers do their shopping
through their cell-phones or via internet.
Autoxuga is mainly a technology company. We have been developing management and accounting software for car repair shops for over 20 years. Also
we have been developing technical training programs and manufacturing Auto Diagnostics Equipment for 15 years. So we could perceived clearly and
foresaw the change that occurred in the automotive industry, and because of this, 8 years ago we developed a computer software for automatically
make auto part orders directly to the factories (without intermediaries). This software collects the different repair shops order of auto parts,
it automatically save them in a database and when the order is big enough, the system directly sends to the factories the order to start to prepare
the parts. Then, previous payment in advance by all the repair shops, and after a few days each repair store receives the merchandise at their
place, without having to do anything. This automatic system connects shops directly to manufacturer and eliminates 3 intermediaries from the
supply chain for the repair stores, therefore allows Autoxuga’s repair stores to have huge benefit and profit. Since they get European market
quality products (OEM quality or original equipment) at very cheap prices or even factory prices, they can make a lot of profit even reducing
selling prices to attract customers. In other words: they will get more customers and still make more money than before with each customer.
Theirprofitwill be enormous.
After elimination of intermediaries in the supply chain since repair stores directly purchase auto parts to factories, incomes are 4 or 5 superior
to those purchases made through traditional channels. Also as you can buy with the same money many more pieces, after a year repair stores of
Autoxuga’s network which used 100% their software system, will get in the practice FREE Fast Moving Consumer Goods (FMCG) auto parts, to cover
the repair of cars of all brands and models.
Success achieved after using Autoxuga’s system is so that the repair stores will have a knowledge that nobody else knows: a part with an Autoxuga’s
specific reference will be able to be installed in many cars of different brands and models. Nowadays every brand uses different references for a
lot of parts that in the practice are the same model, and they will sell them to the stores with different prices and references. But Autoxuga
because we have been working in this industry for so many decades, have sum all the different references up into only a few of them, so we can
get better prices and reduce the stock at our stores. So our stores besides having a stock of FREE spare parts, they will also have with a little
stock of pieces, enough parts at their storehouses to quickly meet customers needs. Total efficiency.
Since Autoxuga is a developer of high technology management software; Technical Training Programs for “in situ” training of operators and employees
of the car repair shop as well as a manufacturer of multi brand auto diagnostics equipment. Our experience let us be sure that the Computer Systems
we design and entirely develop (all develop and manufacturing process is made 100% by us) are the most modern and most effective nowadays repair
shops need to success.
We think that what today repair shops clients need are reasonably priced services and that the only way to offer these affordable prices is getting
rid of intermediaries. Besides, this way, repair shops will also get better profit margins for their survival.
In addition, Autoxuga’s software systems will report daily to the repair shop owners the evolution of their business, showing the economic situation
of it, tendencies, and the strategies to be adopted to achieve better economic efficiency, in order to avoid the go out of their business that
we believe will surely occur if they keep relying on old-fashioned systems and business models. Carefully studying the previous image is
sufficiently clear that every repair shop, in order to be competitive in the actual market must be equipped with a modern software as Autoxuga’s
one is to make them could face the actual labor demand in their shops in this scenario of global crisis.
Car dealerships can adopt Autoxuga’s system on one side of the facade exposing clearly the prices they will charge for repairs and services so
their customers once car warranty period expires don’t flee away to cheaper repair shops and they keep on coming to their facilities, thus not
losing customers. You can see this in the picture below. Autoxuga will provide their repair shops never ever experienced business success.
Let’s stop lying to ourselves and delaying the changes it must be done to improve the profitability of our businesses. Current systems, with slight
variations, are still almost identical to 20 or 30 years ago systems and models. They are always the same, they don’t have prosperous future
expectations and are obsolete because they need many resources of many external agents (administrative agencies, consultancies, computer accounting
software, parts suppliers, billing software, technical software, diagnostics software, etc.) which repair shops must necessarily afford to properly
manage the business. These resources must be eliminated because of their high costs and difficult to operate data.
Autoxuga’s software integrated all these resources and developed a unique system to better used by repair shops.
In times of crisis and economic instability, the only possible solution is offering both quality and price to Customers on parts and repairs
services and this is what undoubtedly offers Autoxuga. You can conveniently check on the links below parts prices which we purchase directly
from the factories. It is completely impossible to get this QUALITY and PRICE through the current supply chain. If besides to this we add that
Autoxuga’s computer system drastically reduces the references for the pieces that are in stock and that with only a few pieces we can cover
repairs for “all cars of all brands all models” the success of your business if completely guaranteed with Autoxuga.
Obviously the climax of a business is getting free financing for the repair store and Autoxuga’s shops found this through their “Subscriber Customer”
strategy which you can conveniently check in the link below. You may check it carefully to fully get its concept:
“ Subscriber Customer” strategy.
