GA_5_2_eng_Web

GROUP PARTNERS

“Auto-Trust”:
"Professional independent service
stations will only keep growing
in demand"

"Professional independent service stations will only keep growing in demand"
The market situation in the sale of premium auto components looks promising
for those independent service stations that know how to work professionally i.e.
to build competent customer relations and spare parts distributors, to raise
the qualifications of employees and to keep abreast of changes taking place
in the industry. Andrey Dvinin, Marketing Director of Auto-Trust, tells us about
what this is all about.

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– What are your thoughts on the present situation of change in long-term demand for auto parts. Moreover, the
the auto parts and service equipment markets? What decrease in disposable income of end consumers and the
trends do you see? Are they good or bad? What do resulting decline in new car sales partly served to boost our
you think the opportunities for growth are? market: more customers decided to invest in the repairs
of their existing cars instead of buying new ones. Which
– The market for auto parts and workshop equipment is means more demand for independent service station
actively developing, according to our assessments. Sure, services and new spare parts. On top of that, a number
there are factors that act in this market's favor and against of regions also show an increasing trend in passenger car
it. The adverse factors include a drop in the population's mileage (something we haven't seen for several years). No
real earnings and, as a result, increased consumer attention doubt, this leads to a proportional increase in demand for
to the price factor. However, this adverse factor has the consumables.
other side of the coin: the share of out-of-warranty cars that
require more auto parts and consumables for maintenance – Selling premium brands is usually seen as
in aggregate has gone up. a challenge: the price-sensitive end customer is
reluctant to buy higher-priced parts. Do you agree
I would include an increase in average car mileage among
the positive trends, and this tendency was very evident in
2020. Besides, the share of end-users who consider
a personal car to be of high value has begun to grow
again. In contrast, the proportion of consumers clearly
opting for public transport and various sharing services
(which require repair anyway) has slightly decreased.
We also see a growing need for customer mobility: it is
the growth of cities, the increasing proportion of upgraded
suburban settlements that are far away from permanent job
locations. Broadly, we believe the positive trends prevail
in our market

– The industry is now facing a coronavirus infection
crisis. How did your company perform during the
quarantine period? Have you had any supply, payment
or warehouse disruptions?

– Let's be outright: COVID-19 effects did not hurt the
auto parts market that much, unlike the new car production
and sales market. Yes, we had some turbulence in April-
May 2020, but it went away pretty soon. This setting has
changed some plans, reallocated volumes, thrown off the
habitual seasonality... However, it has not led to a dramatic

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GROUP PARTNERS

It is also very important that employees receive ongoing training,
that tests and comparative tests of different brands

made in independent laboratories are available to them,
and that the total cost of ownership of vehicles
with differently priced parts
is routinely calculated.

with this viewpoint? What efforts are required to keep – How important is it for the company to work with
selling premium products at a proper level? independent service stations?

– Yes and no. It is definitely much easier to sell "exchange" – We see some one-way trends: the greater complexity of
goods: just set the lowest price and you don't have to do vehicles as such, the greater labor intensity of servicing, the
anything, the product sells itself. But car parts are rarely an emergence of special tools and extra equipment required
exchange commodity as they vary in quality, in applicability. for quality and fast repairs, and a decreasing proportion
So selling expensive goods is just a different experience. of motorists willing to self-service the vehicles they own.
There are a number of factors to consider: the price, of All these factors are bound to increase the demand for
course, but also the service life, the cost of long-term professional service stations and reduce the share of
ownership and the overall safety of a vehicle. If you tell the "garage" services and self-services for vehicles. Another
customer about them wisely, price as such may not be the trend we see is a growing number of customers wishing to
key factor in choosing a car part, but a secondary one. A give their vehicle a comprehensive repair service, picking
specialist's ability to make it clear to the end customer what out spare parts for that repair and an "end-to-end" repair
a one-off saving on a low-grade product can entail is a warranty with a warranty for the spares they purchase.
critical selling factor for premium brands. Here, too, ongoing Hence independent service stations become increasingly
employee training, the availability of tests and comparative important as a sales channel to auto parts suppliers. In our
tests of different brands made in independent laboratories, country, for example, the share of this channel is steadily
and routine calculations of the total cost of ownership of increasing. We plan to keep increasing this share as long
vehicles with differently priced parts are all important. as we go forward..

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MARKET ANALYSIS

In expectation of an ideal client

What kind of customer brings the most profit to a car service? Of course,
the one who will give you the car and wait for you to return it in good condition.
In sociology, such customer attitude is known as "delegation",
believes Alexander Gruzdev who has been examining this question
for several years.

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Let's wrap up with terms: a "delegating" client is the one This transition is actually not a good thing at all. First, the major
who, as we've just seen, fully trusts the technicians at the profit in car service stations should be generated by thespare
service station in charge with his car's maintenance. A car parts. From those who "bought and delegated", the service
owner who services his car all by himself is on the other stations won’t get this profit. Secondly, car owners frequently
side of the "battle-front": In essence, he is not a customer exaggerate their abilities, and they might as well bring in their
of the service station, though he could technically be one. trunk counterfeit or cheap knock-offs that they are simply
Finally, there is a client somewhere in between these two unable to identify when they choose them based on price and
extremes who is willing to entrust the service station with appearance. And thirdly, finally, such car enthusiasts will actively
merely the work and purchases the necessary spare parts convey their belief that in case of repair one should bring their
and materials himself. The chart shows them as "bought and own spare parts to the service station, and other people will
delegated". It makes sense for service stations to win this trust their advice as they repaired the car by themselves before.
customer: attract, retain, and, if possible, persuade him to
entrust the service station with procurement of spare parts Are there ways to handle this? The issue has two solutions
as well. that should run in parallel. The first one is to cap the number
of customers coming to the service station with their own
So what has happened to the number of car owners from parts wherever possible. Many independent garages do
all three categories over the past few years? The "peak" of just that: they shorten the warranty period, charge an extra
do-it-yourself work accounted for the early years of the crisis: fee for work if the customer requests to use its spare parts,
while there were only 27% of do-it-yourselfers in 2014, that offer special terms and promotions, etc. This alone won't do
figure increased to 33% by 2016 – exactly one-third of the the job, though: the stubborn motorist is more likely to switch
market. Is that much? Very much: all these independent to a garage expert than to entrust the service station with
"tinker" are a missed profit for the service stations. However, picking up the spare parts.
it’s virtually impossible to bring them to the stations, at least
using the station's own resources. Here the car makers Therefore, the second approach is to enhance trust in the car
come to help, even if they don't want to do it. service industry as a whole, as well as in each particular service
station. The task is not that easy, but it's a must. The picture of
Let's explain what we mean in figures. In the coronavirus a "dirty car repair" gradually becomes a thing of the past as people
year 2020, household incomes fell as expected, and one see that the modern independent service stations are just as
could assume that the number of people performing repair on good as dealerships in terms of their appearance and equipment.
their own should grow. Yet this has not been the case; on the The image of a car service center as a place where customers
contrary, the figure has declined, maybe not dramatically, from are always cheated still lives on in the minds of the masses. Many
33% to 31%, but this is exactly the trend. And the reason for service stations are taking various efforts to eradicate this: they
it is not that people do not want to save money or that they hold open doors days, actively use social media, and display
suddenly trust car service centers; no. The reason for this lies windows with visual propaganda, etc. All these measures yield
in the fact car design is becoming increasingly complex over fruit, but changing minds is not a quick process.
time. When we look back, approximately 30 years ago, we
can recollect that drivers of a VAZ-2106, "favorite peaches" By the way, car servicing chains might play a substantial
of many Russians, could e.g. fix nearly any part of the car in role in raising the prestige of car services in the eyes
their garages. Nowadays even a replacement of a light bulb of customers. Chains with a broad coverage, uniform
in a latest car would require a hoist, a diagnostic scanner, standards, and centralized marketing are more likely to win
and specialized tools. Such equipment is, naturally, available the customer’s respect and loyalty. However, the scale and
at service stations only, and a frustrated motorist is forced to growth of existing car servicing projects in Russia is not
seek a specialist to undertake the routine tasks that he used sufficient enough to cover the current market size. But that's
to do himself in the past. What's more, the mid-range and a separate topic, and we'll discuss it next time.
mass segment cars have become more complex as well, so
the number of do-it-yourselfers will keep shrinking.

This does not imply that car owners automatically move
from the "do-it-yourselfer" to the "delegated" category. Sadly,
the reality is different. The need to save money has not gone
away, plus long-standing distrust of car service stations and
confidence in their own competence are what pushes the
former "do-it-yourselfers" into the category of "bought and
delegated": you do the repairs, but I will choose and bring
the parts myself, because I know how you work! Well, the
graph clearly shows this trend: the number of "delegators"
remains steady, while the number of those who "buy and
delegate" has risen to 32% in 2020-2021.

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GROUPAUTO UK & Ireland:
"Independent workshops benefit
from our cooperation"

The UK's leading and largest network of independent workshops –
that stands proud. GROUPAUTO UK & Ireland runs such a network.
Maria McCullough, Network Manager of AutoCare and TopTruck,
tells us how workshops benefit from being part of a network,
what the management company requires from them
and what it offers in return.

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– Let's start with an introduction: when was the Group the workshops, only some phone and online contacts.
established in the UK and Ireland, what place does it have Around half of the network's workshops closed for a few
in the market? weeks, yet another half continued to operate as before. A lot
of support came from the state: those workshops that had
– GROUPAUTO UK was founded in 1974. The UK Group to close were paid 80% of their staff salaries, and there were
later became part of Alliance Automotive, which in turn was also bounce back loans and grants available to the network .
taken over by the US-based Genuine Parts Company (GPC) in Still, even those that kept working faced the lack of workload.
2017 - thus forming the world's largest auto parts distribution The situation began to improve as early as June 2020,
group. We are now also the UK's largest trade and procurement however, and the network's planned figures were reached.
alliance, although the gap with our nearest competitor is not as
wide, which makes us work even harder and more efficiently. We, as the network management company,
Of course, our main aim is to increase sales of spare parts, did our best to help the stations during the tough
but the development of our independent workshop network times as well. We offered free access to our
is equally important to the Group's business. resources in two critical months – April and May –
and relieved workshops of franchise fees for those months.
– Tell us more about the independent workshop
network. When and for what purpose was it set up?

– AutoCare, our independent workshop network, was
founded using the concept of the EUROGARAGE network
which GROUPAUTO International is expanding globally.
The network's first workshops joined in 2002. By then, Alliance
Automotive had already enjoyed good results with network
programs in France and Germany, so it decided to expand the
practice to the UK.

We now have 870 workshops in the AutoCare network
that service cars and 49 garages in the TopTruck network
that serve commercial vehicles. AutoCare is the UK's largest
independent workshop network; the rest of the competitor
networks are a long way behind. AutoCare won The Best
Garage Program award in February 2020, but, sadly, Covid-19
disrupted the network's growth.

– How did the network survive the pandemic and the
quarantine restrictions that accompanied it?

– ДIndeed, the quarantine came as soon as we received
the high award. We stopped all personal contact with

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– How do you choose the candidate stations to join the – How do independent workshops benefit from being
network? What are the membership terms? part of the network? Why is it more rewarding than full
independence?
– Distributor companies do a lot of the work to find new
workshops. They inform us about those customers who they – Workshops pay us a monthly fee, so we have to create
think are worthy of becoming part of the AutoCare network. value for them to be a member of the network. And we succeed
My team has 5 regional managers who visit these workshops with that: workshops get a lot more from us than they pay. Just
to see if they meet the network's eligibility criteria, and then to name a few of the things we provide to the workshops :
present with the owners. training programs, a support hotline, an IT system that not just
keeps a station fully operational but also sends out automatic
We have two subscription plans. The first is a monthly reminders to customers about when to have a service visit.
payment that includes the software access: this costs £160. We have a corporate website with the main task of bringing
If a station opts out of our IT system (many have their own in new customers; the station has 10 new customers per
solutions that suit them), the payment is cut to £128 per garage every month with the help of this portal. We also listen
month. to what our partners have to say - managers regularly visit
stations, management holds meetings, workshop requests are
registered and, if possible, met.

The training package that a workshop pays for includes
6 training days, and the workshop is free to choose which
of the training programs to take. The reality is that nobody
refuses this chance – all network workshops use at least
2 or 3 training days. If they require more training days, all
trainings in excess of the 6 in the package come at an extra
cost but with a big discount. There are 82 courses in total
available to the workshops. The majority of these courses
are, of course, technical, but we offer marketing, finance,
customer service courses as well – all of these relate to the
business aspects of independent workshops. Our offer has
a very good price, believe me: a training day costs about
£250-300 in the UK while our monthly package comes with
as 6 training days.

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There is no access to all of these opportunities for
independent workshops that do not belong to our network,
although our distributor partners can give them some kind
of support e.g. they can sell them trainings. You see, as
a Group we cooperate with networks only.

– The industry is changing, with new technologies like
electric vehicles, hybrid engines, etc. emerging. Do you
help network stations train for future repairs of such
technology?

– Absolutely: we have an electric vehicle trainer, a highly
qualified specialist who works exclusively for GROUPAUTO.
Overall in the UK, 7% of the staff of independent service
stations have received training in electric vehicle maintenance;
in our network, that percentage is 39!

– Finally, tell us about the commercial vehicle
maintenance network. What makes it so special?

– There aren't many independent truck servicing stations i
n the UK. Just to compare, a station that services passenger
vehicles covers an average of 5-6 miles’ area whereas truck
stations can cover a distance of 60 miles or more. Another
feature of commercial vehicle service is that the customer
expects all work to be completed as quickly as possible. This
means they are not as price-sensitive and are willing to pay
more for a quicker result. So the number of stations in our Top
Truck network will not grow at the same rate as the passenger
car network, yet it continues to be a profitable and promising
business.

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Andrey Garmash:
"A team must work as
a coherent mechanism,
then it achieves
the maximum economic effect"

Professionalism, teamwork and ongoing training are the obvious ingredients for
the success of an independent service station. Yet there are some other less
obvious but very important rules: don't take on every job and know your benefits.
This is a strong belief of Andrey Garmash, owner and manager of GarMash car
service, Taganrog, and he shares his experience.

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From dealer to owner we should take part in an electronic tender for the right to
Technology has been my passion since childhood: service the administration's vehicles. We applied and won
the RUR 1 million contract by the end of 2010. Other public
mopeds, motorbikes, go-karts, albeit not as they are now bodies came along after the administration. Well, it got off
but built out of hand-made materials at the DOSAAF (Russian the ground.
Army, Air Force and Navy Volunteer Society) garage. Over
there, in DOSAAF garages, and thanks to my father and In 2011, the Hyundai car showroom that we started with
grandfather, I gained my first knowledge about the structure ceased to exist, and a Chinese car showroom was set up
of cars and motorbikes. Later, me and my lads organized on its premises for the Chinese brands Lifan, Geely, and
what is now fashionable to call a motorbike club; basically, Haima produced by the Derways plant (Cherkessk). As the
it was a big garage belonging to a lad where all of us repaired, repair bays at the car dealership were leased out, all the
tuned up and built motorbikes in common efforts; that was mechanics left, but some of them kept working for us. The
the place where we gained our first hands-on experience. showroom management offered us to take over the functions
Working at my father-in-law's garage in which he dealt with of a dealership service centre. This is how we became Lifan,
car electrics was my first car repairing experience. Between Geely, and Haima dealers. As the manufacturer's warranty
2001 and 2003 I learnt intensively the diagnostics of injector policy was not very successful, we had to set up a warranty
vehicles, which was a new trend then. It took me two years fund. The fund accumulated most of the maintenance
to achieve some success, and in 2003 I was invited to work money,
as an auto electrician-diagnostician at a Hyundai dealership.
I worked at the dealership until 2010 and built up a name for and we used it to remedy all warranty claims. We continue
myself and my first customer base. to stick to the same warranty policy: the warranty is provided
to the customer by the service station, not the spare parts
In April 2010 my partner and I rented premises and manufacturer or distributor. Our warranty is one year or
opened our own car service station. We started out on our 25,000 km of mileage.
own with only a screwdriver, a wire tester, a scanner and
our honest names. The lack of equipment and funds to 2013 was the most difficult and depressing year of my
buy it became an acute issue at once. The state program life: my partner decided to leave the business, and then
of assistance to start-up entrepreneurs was functioning at the lessor effectively took over the car service. Yet I had
that time: it covered 70% of acquisition cost of the equipment already bought a land plot and poured the foundations for
but not more than RUR 300 thousand. We applied for this the construction of my own service station by then. I had
program, drew up a business plan and received approval. to press on with the construction in the face of a total lack
We used the money to buy our first hoist and a minimal of money. Anyway, in August, we moved into our own
set of tools. Going door-to-door in the administration's space, which was still under construction but was ours. The
offices had a bright side as well: an official suggested that relocation to the new location was quite seamless because
the equipment belonged to me and the accounting system
had been in place since the first day, and we were able to
keep our entire workforce and corporate customers. This
is what we consider the day when GarMash Service Station
was founded.

Currently, our service station consists of 5 posts in
a 250 sq. m. room, 3 two-column lifts, one of which we have
just recently installed instead of the electrics/diagnostics
post, which was combined with the wheel alignment post.
The wheel alignment station is an inspection pit with ramps.
Another post had to serve as a spare parts warehouse for
lack of space. The average number of visits per month
is 170, plus around 100 free diagnostics visits. An average
bill is RUR 9,000. Our work hour is RUR 1200. The average
number of completed work hours is 470 monthly.

We currently employ 7 people in our organisation:
2 mechanics, 2 master consultants, 1 cleaner, 1 apprentice
and myself as a supervisor, mentor and diagnostician.
Mechanics earn for actual completed

We started out on our own with only a screwdriver,
a wire tester, a scanner and our honest names. The lack of equipment

and funds to buy it became an acute issue at once.

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work hours: mechanic 1 earns RUR 500 per work hour has a major impact not only on revenue but also on the
while mechanic 2 earns RUR 400 per work hour. One repair queue. This creates stress for us and needs to be
master consultant receives RUR 20,000. The rate +1% addressed as a matter of priority. As it is almost impossible to
of all proceeds + RUR 100 per car from free diagnostics. find trained mechanics, we have been training our own staff
The second master consultant who assists me and has for many years now. I train mechanics myself according to
a financial motivation is my wife Galina Garmash. Apprentices the principle of "teach myself, teach the staff". In this sense,
receive a scholarship of RUR 15,000 for the first month I am a bearer of knowledge and experience and pass it on
of training and RUR 250 per work hour if they continue as to existing mechanics and potential new ones. With this
staff. As you grow and expand your skills, your work hour approach, a change in people has no impact on the quality
rate goes up. We work 6 days a week, and the working of work. Technical webinars and field seminars by spare
hours are from 9 a.m. to 7 p.m. We try to make a shorter day parts manufacturers have recently made it much easier to
on Saturday but we don't always manage to do it. Sundays train staff and raise their skills and competence. Recently,
are days off. for instance, febi technicians came to our service station
as part of the febi expert partnership program and gave us
Lately, I have often heard that independent service stations, a very intensive training session, which provided us with
and even more so garage workshops, have no future and a wealth of new information.
networks will press them out. I don't agree with this: mini
service stations and garage workshops evolve as well, Higher requirements make it difficult to close vacancies as
and they are no longer dark, dirty "garages" with drunken quickly as we would like to. Especially in the current state
mechanics. These days, in most cases, "garage" workshop of affairs that young people do not want to work with their
looks like a surgery: tiled, with good lighting and expensive hands and the prestige of blue-collar jobs is lower than ever.
equipment, with a trained technician, often the owner, Still, we do manage to find competent young people, mostly
working inside. Even more, if you organise a service station through Avito and among the trainees that educational
that takes on administrative functions, such workshops institutions send to us. For example, Alexey Bezdetko,
could compete with networked workshops not just in quality winner of "The Best Car Service 2020" contest in "The Best
but in the number of work hours they complete as well. Mechanic" category, came to us for an apprenticeship and
joined us as a competent mechanic after graduating from
We are looking for talent the institute. Years of experience have shown that good
We have two job openings right now for two mechanics mechanics come from educated people, but it is very difficult
to entice them into our industry. We place quite stringent
and a diagnostician.The lack of a diagnostician does not expectations on students not just in terms of their technical
have a big impact on revenue, but the lack of mechanics skills and absorption of new information but also in how
they adapt socially in a team. Occasionally, we are so upset
when a promising apprentice gains experience quickly and
is not lazy yet is unable to adapt to the team owing to his
clashing personality. We let such employees go because the
team must work as a coherent mechanism, and only then
the maximum economic effect can be achieved.

Skilled mechanics have another peculiarity: on average,
after three to four years, when they have reached the peak
of their professionalism, they decide to try their hand as
independent tradesmen. For example, our former employees
have opened four service stations and four spare parts
shops in the city; we had trained all of them from scratch.
Still, it is better to let the trained people go rather than
the untrained ones working.

As for master consultants, they are much easier to recruit,
and more jobseekers are responding to the vacancy ad.
Master consultants are much quicker to train than mechanics,
mostly due to the large number of training courses and
training programs available online. Since master consultants

We place quite stringent expectations on students not just in terms
of their technical skills and absorption of new information but also in how

they adapt socially in a team.

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The idea was to set up a free diagnostic post that would be open
all day and equipped with the essential tools needed for quality diagnosis.

This plan got off the ground in the heat
of the pandemic.

also deal with selecting spare parts, one of our main goals machine shop in the city, the nearest one is 70 km away.
is to teach them how to do this job within a very short time. The second important factor was time, which we didn't
We teach spare parts selection ourselves in-house, while have enough of for many reasons. The third factor, perhaps
we entrust maintenance and sales training to the experts. the most important one, is that we don't find it profitable.
Recently, for example, our new master consultant completed I believe that any aggregate repairs need to be outsourced to
his Foresight course by GROUPAUTO Russia. After it, he got specialized workshops, equipped with dedicated machines
into the job pretty quickly and took up his duties. and knowledge. They will do it faster, cheaper and better.
This applies to complex diagnostics, calibrations of driver
Advantageous and professional assistance systems, etc.
We started as a mono-brand, servicing Hyundai cars, then
Pandemic has enabled me to implement a long-standing
Lifan, Geely, Chery, then TagAZ, etc. Since we have serviced plan. For a long time, we used to offer free running gear
most of our customers for many years, when they change diagnostics every day from 9 a.m. to 10 a.m. on a waiting
cars, we cannot reject them for servicing. This is how we list, but the time was clearly inadequate, and the diagnostics
add new brands to our competence list. I can mention often took longer than expected. Therefore, the idea was
several brands in which we are particularly good: Hyundai, to set up a free diagnostic post that would be open all day
Kia, Ford, GM. Right now we are working a lot with WAG and equipped with the essential tools needed for quality
group. As for Fords and GMs, it was our deliberate choice diagnosis. This plan got off the ground in the heat of the
because everyone in the city refused to work with them and pandemic: a suitable space has been vacated. Since
it turned out that "they just did not know how to cook them". our basic service station is not located on the first line, we
Every time we start working with a new brand, we buy the opened a diagnostics post in the area of a self-service car
appropriate special tools and technical documentation. We wash near a busy intersection, so that the facade could serve
don't work with BMW at all and try not to take Chinese and as advertising area. We renovated the space and set up
local cars, with the exception of VAZ in recent years. a special inspection pit with a backlash detector. Since people
like things that are unusual and memorable, we organised,
We have been providing quite a wide range of services, if I may say so, attention catchers inside the space. The lift
including engine repairs, automatic transmissions and into the pit is eye-catching and memorable, and it was also
in-depth diagnostics for many years in a row. Now, we cheaper than erecting handy steps. A diagnostician uses
mainly deal with running gear, timing, clutch, DSG and a camera light during the checks that broadcasts to a monitor,
Powershift robots, diagnostics without exorcism, electrics and the mechanic gives clarifications on the progress of the
without fanaticism and, of course, maintenance. We gave diagnostics. The room itself is styled as a showcase for
up engine repairs because we didn't have any decent our service station: the walls are decorated with diplomas
and awards that prove the skills of our mechanics, etc.
Customers remember the design of the premises and
the technical tools we use, and they are happy to share their
impressions with friends and acquaintances.

We have never used any advertising since the beginning of
our activities,save for several occasional attempts to set up
internet advertising during the crisis. Such attempts failed,
and we have not attempted to do so again. Of course, no
amount of money will make "word of mouth" work unless
you do your job well, so high quality work and memorable
trappings have kept us flowing with new customers.

The structure of our organisation is as follows. There are
two or three people working at the diagnostic post. I, as
a diagnostician, do the inspection and give explanations
and advice to customers. It is important that only I do the
inspection, because this is when we get acquainted with
a new customer and he forms his opinion about the service
station by the diagnostician's actions, communication skills
and technically competent arguments for repairs of parts

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and units. The very first impression affects the way our suppliers has become pointless, because we will not accept
cooperation with a customer is going to proceed. the parts from them. And customers often simply have
nothing to compare our prices with: their wallet is the only
This is how I ensure a flow of loyal customers, and they guide for them. As for price checkers and those who are only
associate the service station with me. guided by price, those are not our customer pool.

One day it became clear that the diagnostics post could For the same item, we usually provide two options
bring in more customers than our basic service station could to choose from. The first option is a high-quality part that
"handle". So the idea of partnerships with other small service isn't the original, and the second is a lower-cost but equally
stations came up. Such partnerships could be of interest high-quality part.
first and foremost to small service stations and "garage"
workshops. Supported by our diagnostics post, they would For parts and oils, we charge an average of 40%.
not be busy with diagnostics, choosing spare parts, ordering I'm aware of the strategy of using economy segment
parts and making appointments, but instead could focus parts and charging 80% or more for them, but I disagree
on what they know how to do: quality car repairs. We've with it. We do not use economy segment parts that, in the
already begun moving in this direction, and I believe we'll end, will cost a little less than premium for the customer in
keep working for the next ten years to create something akin this strategy. We rather prefer a smaller markup, but deliver
to a service station aggregator. a quality-guaranteed part to the customer, plus 40% of
the higher purchase price of premium parts gives a profit as
Spare parts available good as the 80% profit of the cheaper economy segment
It's no secret that a service station earns money parts.
Now, as an experiment, we offer all WAG owners spare
from the sale of spare parts; suspension repairs and parts at a 20% surcharge, but at a work hour price that is
maintenancesessions always involve the sale of goods a little steep for our region: RUR 2000 versus the usual
worth more than the cost of the repair itself. Hence, what RUR 1200.
is needed is more work, through which more spare parts Altogether, the repair costs don't change, but at this point
can be sold. We have proven this assumption in practice, we subjectively find that our customers are more willing to
and it has proved to be true. This is why we are now sticking pay more for work than they are to overpay for parts.
to this strategy. The spare parts warehouse is more of a relic from
the days when there were no express deliveries several
We could not dare refuse customers with their parts for times a day and no ROSSKO warehouse within walking
a long time, even though using those parts made no profit distance. The times when we worked on the fly without any
to us. But, when the diagnostic post saw that the customer preparation for the customer's visit. The times have changed,
flow was increasing and we could not "handle" it any more, the distributors' warehouses now stock the majority of
we had to filter the customers, and the first thing we did commonly used products that can be delivered to us
was to reject the customers bringing their own parts. In the multiple times a day, and preparations for customer visits are
end, very few customers left us for not accepting them with now a must, having own warehouses is neither obligatory,
the spare parts, while the rest were even more willing to
have us repair their cars. Well, checking prices from other

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Most importantly, participating in the competition each time forced us to review
the situation, learn and apply what we learned in practice, which ultimately had

a knock-on effect on revenue growth.

nor even advisable. A warehouse not only takes up valuable category. That same year we went to the finals in
space, it also freezes money, which, in fact, does not work. Moscow, where I was in the top ten diagnosticians, but
We are now taking reasonable efforts to dismantle the we did not win any prizes. Every time we participated in
warehouse, or at least cut it in size considerably to give free the competition, we realised where we had gaps in our
room for another post. knowledge, and we tried to eliminate them.

Among the winners The competition acted as a driving force that pushed
We seem to have joined another tradition lately: taking part us to advance. We attended professional seminars, took
online training courses on the resources of spare parts
in professional competitions. We first entered the “Best Car manufacturers, and invited industry-renowned trainers. Most
Service” competition in 2018. It was more of a curiosity for importantly, participating in the competition each time forced
us at the time. us to review the situation, learn and apply what we learned in
practice, which ultimately had a knock-on effect on revenue
In Krasnodar, we took part in the regional finals and growth. We took part in the 2020 competition as a team.
competed only in the "Best Car Mechanic" professional We had luck aboard, and we came in second place in the
category. We didn't become the best and realised that finals as a mini service station, and our mechanic came in
there were lots of things we were unaware of, and this first place. Connections with colleagues from different cities,
became an incentive to develop our skills and gain sharing experiences and just communicating with smart
knowledge. In 2019, we also took part in the competition. people is also what the "Best Car Service" competition
Our mechanics scored in the top ten in the region, and presented us with.
I took third place in the "Best Diagnostic Technician"

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