- The Polish company's Bulgarian unit has become number one in the local auto parts market in ten years, reporting revenue growth of over 50% for 2021.
- Inter Cars has become leader in the auto parts market in Bulgaria on the back of fast wholesale deliveries from a large warehouse.
- Another benefit for the company is that it has nearly ten suppliers in each category.
For almost two decades, the fragmented auto parts sector in Bulgaria operated fairly unperturbed. It was founded in the early 90s by many local players who reported growth over the following years without making deep changes in their business model. Their calmness was interrupted at the end of 2011 when Poland's Inter Cars opened a local subsidiary - Inter Cars Bulgaria. Thanks to its team here, it became market leader in the span of several years. The company reported record revenue of 350 million levs (179 million euro) for 2021, which represents 50% growth compared to 2020. This result secured Inter Cars Bulgaria a place in the top 100 of the largest companies in the country.
Unlike most companies in the industry, the Polish giant bets only on wholesale sales here. It delivers car parts from its large warehouse near Sofia to 5,000 repair shops and dealers. The concept of Inter Cars Bulgaria is to work with local partners in cities under the company's brand, covering the entire country and guaranteeing fast delivery. It was the opening of the Sofia warehouse four years ago that allowed the company to have a large assortment of parts and to speed up and facilitate deliveries. Before that, the Bulgarian company worked with Inter Cars' logistics centres in Romania and Poland. The Sofia warehouse now spreads on 20,000 square meters, offering 160,000 unique items. Customers have easy access to them through the company's online system or telephone service, as well as on-site in the offices.
"The big point of building a warehouse here is to receive the goods directly from the manufacturers' factories. Between 20 and 30 trucks arrive every day," says Vihren Bogdanov, the manager of Inter Cars Bulgaria, who started the business here more than ten years ago.
The company guarantees delivery in one hour in the four biggest cities, in half an hour in the next 20 cities, and 20 minutes in the smallest locations. "Each customer has access to the entire inventory of Inter Cars in both Romania and Poland. And the price has never depended on where the goods are. If something is available in Poland, it costs as much here as it costs there," says Bogdanov.
The three reasons
According to Bogdanov, last year's revenue growth of over 50% (which is equal to the turnover of the second-largest player in the market) is due to several factors. "The first main reason was the availability, because since 2020 there have been difficulties with the supply of various brands and items. When the Covid crisis came, we took three steps. The first was to tell customers that everything remains the same - the terms of payment, frequency of deliveries, etc. The second was to tell the team that everyone is staying and has a guaranteed job at least until the end of the year. And the third step was a group-level decision - we just started loading everything available at the time, and we started buying. Why? Because of the simplest possible logic - if the world is going to end, it doesn't matter what you do. If it doesn't end, however, it's better to be prepared and have a perspective," adds the manager.
The advantage of Inter Cars Bulgaria is that it works with many partners. As it has a wide portfolio, the company has a dozen suppliers in each product category. "In such a situation, you will always get something from one of them that will work for the specific car, unlike if you just work with only two suppliers," explains Bogdanov.
After the pandemic, the situation has improved this year. According to Bogdanov, the market is growing, although the number of cars on Bulgarian roads has not changed for years, standing at nearly 3 million. One reason for the growth is inflation, but there are other factors as well.
"In 2020 and early 2021, the market grew on the back of increased use of cars amid Covid-induced worries over travel by public transport. Now it continues to grow because people have started to travel more despite the expensive fuels," says Bogdanov. And last but not least, delayed deliveries of new cars around the world result in an unexpectedly longer service life for older cars, and consequently more repairs.
"If a company postpones the purchase of new cars due to a lack of cars and maintains its fleet properly, this increases the revenue of the repair shops," says Bogdanov.
Inter Cars Bulgaria sees an opportunity exactly in the management of corporate fleets. Due to its long-standing relationship with service stations, the company wants to act as an intermediary between them and companies that need to have their cars maintained and repaired. The new FLEET service covers the entire process from the establishing of the damage to the car, through its fixing, to the delivery of the vehicle in working order.
Years ago, the company launched the Motointegrator platform - a search engine for car repair shops and car services that facilitates communication between them and customers. Thus, the expectations are that in the ranking for 2022, the revenues of Inter Cars Bulgaria will be even higher.