If you own a car, chances are that’s thanks in part to ATR International, the world’s largest and oldest trade cooperation of automotive parts distributors. With its many garages across Europe, and its own brand for car parts and accessories called Cartechnic, the company has a strong presence in the aftermarket. So, you may well also owe your car’s continued functionality toATR International.
Headquartered in Stuttgart, ATR International comprises 37 partnered companies and 268 suppliers worldwide. It has a presence in 63 countries, across all (inhabited) continents. The company began life as Auto-Teile-Ring, a collection of five automotive parts suppliers in Germany in 1967, two of which (Matthies and Stahlgruber) are still partners to this day. However, ATR did not aspire to globalisation until the 1990s. In 1999, ATR International was created as an extension of an earlier incarnation, and it began to acquire members from France, Spain and further afield. In 2017, ATR’s external revenue exceeded €22.5 billion, representing a continued exponential increase from previous years.
Roland Dilmetz has been Managing Director at ATR International since 2002, having previously worked for Robert Bosch (now one of ATR’s trusted suppliers). This gives Roland an impressive 36 years of experience in the automotive aftermarket, and not just in the one position. During his time at Bosch, Roland worked in a variety of the company’s trade divisions, overseeing central auditing and sales, as well as marketing training and research. He even spent five years in Spain (one of the first countries in which ATR began its global expansion). Therefore, when the call came from the three-year-old trade cooperation, Roland was well-equipped to move straight into the role of Managing Director.
Democracy in corporations
For around 16 years now, Roland has overseen ATR International, which is structured as an Aktiengesellschaft, or ‘share corporation’, a company owned by its shareholders, and is roughly equivalent to the UK concept of a public limited company. According to Roland, the cooperation has led to a truly democratic culture between all its members, who are leaders in their respective domestic markets.
“For many years, we have had these real values in our mission statement, and we live by them,” says Roland. “The difference between ATR International and its competitors is that we’ve followed the ‘one company, one vote’ principle for a long time, independent of company size.
“So it doesn’t matter whether it’s a relatively small company, with a turnover of €40 million in Iceland, or a €10-billion company like AutoZone in the US, both have only one vote in our general assembly, both have the same proportion of shares. At first glance, you could say ATR International is very unbalanced in regard to the size of its members, but the ‘one company, one vote’ principle makes up for this, and everybody accepts that.”
This democratic model is possible thanks to ATR’s status as an AG. The company’s ideal of egalitarianism was not adopted as just a vague aspiration but was enshrined in the company structure. “The purpose of structuring ATR as an Aktiengesellschaft, was that all its members and shareholders should have the same quantity of shares,” says Roland. “Every partner is an equal partner with equal voting rights, obligations and shares. Further, ATR International is not listed on the stock market and therefore the shares do not increase or decrease in value. This also makes it easy to integrate new shareholders.”
“Each partner is an equal partner with equal voting rights, equal obligations and equal shares.”
Further, ATR’s structure gives its members a stronger position in the sales market, by pooling their strengths. The intent is to generate a synergistic effect on the market by using common strategies, reinforcing each member’s ability to shape the automotive aftermarket, and also keep sales and price policies in line with the market. There is also a benefit for the market itself; ATR’s selectivity means only high-quality companies profit from the stronger market position, and so the market becomes dominated by superior manufacturers, ultimately ensuring customers have access to exceptional products and services. Ideally, the company will also continue to grow and increase its lead over competing trade cooperations.
In addition, shareholders have exclusive access to the cooperation’s own brand of automotive products, Cartechnic. Over the past two decades, ATR has grown its 20 product groups and 700 items to a low-cost, high-quality brand. It includes antifreeze, electrical components, oils and lubricants, and general cleaning and service products. Cartechnic has a large target market, aimed at commercial garages, specialist retailers, petrol stations and public transport companies. Access to these products is, therefore, just one of the boons of membership with ATR.
It’s certainly not your typical company structure. Even Roland admits it can be a little complicated for first-timers. “I would start by explaining to a new employee what we do and how we do it with our mission statement in mind,” he says. “Our experience suggests that you’d need several months to understand our business model. I’ve now been with ATR almost 17 years and in the automotive aftermarket for 36, and I’m still learning about our business from our ATR members. This is especially true over the past few years, in this fast-changing industry characterised by many disruptive trends.”
However complex, ATR’s business model is undeniably a strong one, given its enormous international success so far. Norbert Haug, Vice-President of Motorsports at Mercedes-Benz for more than 20 years, was a guest speaker at ATR’s 50th anniversary celebrations. In his speech, he used an analogy to perfectly describe how these different companies came together to combine their strengths and create a strong, quality organisation: “Formula One World Drivers’ Championship titles are always a team effort. Strong individual performance is important, but the team is the real star.”
One big family
Naturally, not just any company can become an ATR member; there is a rigorous selection process. Given the company’s success and worldwide reach, one would expect there to be many membership applications. Sure enough, the organisation has had around 80 companies from 40 countries apply for membership in recent years. However, only half a dozen made it into the ATR family.
Indeed, the membership selection process has been a very gradual one since ATR went international in 1999. That year, there were only 10 members, and it did not reach 20 until 2005. The year 2012 saw the company reach 30 members and today, there are 37. The deciding factor is that any prospective member must be in tune with the company’s culture, philosophy and mission. ATR International has to maintain its internal dynamic of cooperation and mutual benefit for members and suppliers. “Of course we want to
grow,” Roland says, “but not at any price.”
“Of course we want to grow, but not at any price.”
“The most important thing is to carefully select members, like these two new ones we got in January,” Roland explains. “One was a relatively small company from Bosnia, but for Bosnia, it’s a big company – as the country only has seven big players – and the other was from Turkey. So then we were in this process where we looked at any gaps in the 116 agreements we had with suppliers, and how these new members could fill them.
“ATR has another special quality – let’s call it ‘our cultural history’. We transformed many national German agreements into international agreements with the suppliers. And then we asked, ‘Okay, what demands do the new members meet? Do they want to start with, for example, shock absorbers or clutches? What would be good in the market? What is the competition like in that area? Does it make sense for a particular supplier to work with, for example, Bosch or Valeo?’ From there, we make a recommendation to our new members but, of course, they are free to decide.”
Though ATR may be discerning in its choice of shareholders, it is more than just a business. “Many people and suppliers talk of a success story, but on the other hand, our members are all lucky as well,” says Roland. “There were about 70 other companies who applied for ATR membership. They are now in one of the other four international trading groups because, while we are very selective, the main issue was always about finding the right partners.
“Despite all the growth, and the developments and achievements, it’s still like a big family. It’s a very close relationship. There are many friendships, visits, calls and emails between the members throughout the year, not just when they get together at ATR meetings, shareholders’ meetings, forums and things like that. So it’s all very friendly.
“Despite all the growth, and the developments and achievements, it’s still like a big family. It’s a very close relationship.”
“It’s fascinating to bring people from different continents together – we have an excellent climate in our supervisory board. It is always deciding on new members and discussing things intensively, but in a frank way, so this makes it really enjoyable to work with ATR members.”
ATR International’s specific market focus is the independent automotive aftermarket, which deals in the manufacturing, distribution and retail of automotive parts, accessories and equipment. As one can imagine, given the scope of ATR’s operations, it tries to ensure the highest quality in suppliers. To that end, the company encourages its members to work with ATR-approved suppliers, called International Preferred ATR Suppliers (IPAS), all of which have promising market positions and strong ties to ATR. However, the choice remains with the shareholder, in keeping with ATR International’s democratic culture.
“In principle, all members are free to choose a non-ATR supplier,” says Roland. “But, of course, they usually make the decision based on the economic benefits of the ATR membership. If they work with ATR suppliers, which we have made integral to our membership agreements, they get a bonus,” he adds. “If they say, for example, ‘No, I have had a close relationship with this other supplier for many years, and I would prefer to maintain that, it’s their decision. We won’t make a fuss over it. But the IPAS partnership figures speak for themselves.”
The IPAS system provides benefits to the entire ATR family – shareholders and suppliers alike. It eliminates any need for a trial-and-error approach to forming business partnerships, by providing new members access to suppliers that ATR knows to be excellent. The company also uses the system to fill niches or needs that new members may have, identifying gaps in their supply chain.
IPAS, Roland says, emerged as a way of creating a more unified basis to the ATR family. “We have unique relationships with each member, so eventually we would have needed a team of 20 people just negotiating agreement after agreement all day, every day. So we said, ‘Hey, we have to find something like a core, a nucleus to all this – how do we do that?’ That idea came from General Manager of Coordination Purchasing Wolfgang Menges after we visited a conference of companies completely unrelated to the automotive aftermarket, involving pharmaceuticals and related businesses.
“That was how we got the idea to create something like IPAS. We then analysed all ATR International’s members at that time – how well they work together, in which product groups, what the most important product groups are, who the most important suppliers are, and so on, in regard to shock absorbers, lamps or batteries, for example.
“At that time, we had nothing. We had no database. We really started with nothing, just this working group, several members of which are still here. People like the former CEO of automotive parts distributor Inter Cars, Robert Kierzek, the purchasing director of Star Group, and others.”
In pursuit of high-quality supplier–shareholder relationships, ATR International instituted the IPAS Forum. Held biannually, the forum gives members the chance to meet ATR suppliers face-to-face. The most recent forum, held last November, featured around 230 shareholders and ATR suppliers and, over three days, numerous meetings were held between potential partners. Some of the discussions were planned, others impromptu, and at the end of the forum ATR International received plenty of positive feedback.
These IPAS Forums are increasingly necessary as ATR International builds a truly global presence, and the vast network of members and suppliers needs to be brought together. “Often, like in the case of Asia, we bring new members together with the suppliers for the first time,” says Roland. “So, we had our seventh international IPAS Forum last November.
All the new members from Korea, the Philippines, Singapore and Thailand were there, and they had the chance, over three days, to meet all the important suppliers, get in contact with them, and see what they could do. After this event, the next task is to have meetings here in Stuttgart with the suppliers.”
As well as the IPAS Forum, ATR hosts a number of other international meetings and task forces such as the IPAS Steering Committee and the Workshop Equipment & Tools Steering Committee (WE&T). “About two years ago, we established WE&T, which included international members,” Roland says. “The committee has already achieved good results after a few meetings with suppliers from the sector, and this will continue.”
Another steering committee was recently formed to discuss the importance of private brands, retailer-specific products made to compete with brand-name products. “We held an international meeting in November to discuss this topic and see how we could work together to make it progress,” says Roland. “This concerns more than just our current Cartechnic brand, which has been on the market in 17 countries for many years. There are a number of interesting approaches for a collaboration, especially with our existing 114 ATR suppliers, of which 36 are IPAS, but also with new sources of supply. The new Private Brands Steering Committee met in November 2017 and at the beginning of 2018 to determine ATR International’s next steps in this area.”
There are also national initiatives, including talks with suppliers, and meetings on marketing and distribution. Between the IPAS Forum, the steering committees, and the regular meetings with shareholders and suppliers, it’s evident that ATR spends a great deal of its resources and time in maintaining a strong business network stretching across the globe. Even when difficulties present themselves in the network, the company continues
to nurture the supplier–shareholder relationship.
“There are always problems, like delivery problems in a certain market, or price problems, and so on,” Roland admits. “So if we have a meeting with a supplier, we ask all our members ‘What are the current issues we should discuss with them?’ Then we go through all the members’ issues with the suppliers, and look at their point of view, and then make a to-do list. This is regularly updated with input from our team, suppliers and the ATR members.
“We go through all the members’ issues with the suppliers, and look at their point of view.”
“The goal is to create a win–win situation. No supplier wants to cooperate just to benefit an international trading group. They will cooperate only if it is a win–win for the suppliers and the members. Otherwise, they won’t pay a bonus or work with the company, so we must try to be a kind of regulator in this independent aftermarket.”
While ATR has engineered a large global network of trusted suppliers, it has had to not only actively limit the number of members they accept, but also the number of suppliers. With recent additions to the ATR International family in South-East Asia and Australia, the company now has a truly global reach. It has had a presence on every continent since the start of last year, but with every new addition to the company comes the possibility that the new member will want to bring new suppliers with them.
“There are now 37 shareholders,” says Roland. “When I started in 2002, we had this situation where it was clear that we would grow, and we wanted to grow. At that time, ATR had about 10 members and most of them were based in central Europe. There were none outside Europe, not even in Eastern Europe. But each new member already had relationships with their suppliers, and they said, ‘Yes, of course. It would be great for me to have an international ATR agreement with these suppliers!’ So we saw that with the growth of ATR, this would lead to a situation where instead of 80 international agreements, we would end up with 400–500.”
Growth and expansion
The global aftermarket industry is enormous, and expectations for the market’s future remain high. In 2015, the industry was valued at US$760 billion, with the US and Europe accounting for approximately a third each, while China represented another 10%. By 2030, the global industry value is expected to reach US$1.48 trillion, thanks to a growth of 4.4% in demand in 2018 and a compound annual growth rate of approximately 5% for the foreseeable future. The highest regional growth is naturally in emerging economies such as India and South America, though growth is still forecast for nations of the Global North; in developed countries particularly, demand will be driven by the increasing age of vehicles.
With this in mind, what are ATR’s plans for the future? The company’s stated aims are threefold: to be represented on all other continents while continuing to enhance services; to help brand-independent car repair businesses become more competitive in an increasingly global, valuable market; and to gain market leadership in Europe.
As mentioned, the company now has a presence on all continents, but work remains to be done, since in some regions, like Asia, market penetration remains minimal. “We would like to cover the white space, let’s say, in the emerging markets,” Roland explains. “Especially in Asia, where we started last year with new members in Singapore, the Philippines, Korea, and Thailand, and of course the huge markets of China and India, not forgetting countries like Vietnam, Indonesia and Malaysia.
“We’ve come from a national or German-dominated trading group to an international trading group, and the next step will be a global trading group. Therefore, the past year, with the expanding presence across our continent and in Australia and the Asia–Pacific, was very important.”
“We’ve come from a national or German-dominated trading group to an international trading group, and the next step will be a global trading group.”
Of particular importance is China, given that it continues to dominate the Asia–Pacific market. This is thanks to increased prosperity, which in turn has led to a rise in automobile ownership. China’s new car sales in 2017 were up 3.6% from last year, and used car sales were up an impressive 20%. This is expected to continue in the future as the nation’s wealth grows. Increased used car trading is central to this market growth, which in 2021 is expected to total nearly 21 million sales. The older the car, the greater the chance that replacement parts will be needed, and that drives demand for that segment of the automotive aftermarket. Additionally, a slowdown in Western European and US demand for replacements will further drive the industry to seek out opportunities in China, India and Eastern Europe.
It is therefore clear that the first of ATR’s three aims – global representation – is already well in hand. But what of the second, helping independent car repair businesses to remain competitive?
Well, as the market expands, the technology also continues to develop. Naturally, with innovation and evolution in the industry, more training and staff who understand the technology will be increasingly necessary. Developments in the industry include electric vehicles, automated driving and data-connected cars, some of which are already hitting the streets in various forms. Telematics, including GPS, in-built communications and advanced driver-assistance systems have appeared in top-of-the-line vehicles already. Now, however, they’re being installed in mid-range vehicles, thanks to growing demand for data connectivity. It’s an exciting time to be in the automotive industry, but it would be inadvisable to rush in unprepared.
“I noticed something during my recent visits to South America, Europe and China. In all these regions, the focus was on finding qualified people. On the one hand, the industry is getting more complicated; on the other hand, an electric car is not as complicated as a combustion engine. Nevertheless, everyone is looking for qualified workers, and it’s going to be really challenging over the next few years to find the right people,” says Roland. “It’s so difficult. The aftermarket in Central Europe is not as ‘sexy’ as other branches or markets. For the automotive specialists of today, tomorrow will be more about mechatronics, so it will get more complicated in the future, and we’ll need the right people to fill these roles.”
The impacts of technology are not necessarily limited to a need for staff retraining and adjustment to new products. Online retailers also represent a big challenge to the automotive aftermarket, as indeed they do to most retail sectors. Amazon and eBay are the largest sellers of automotive parts in the US by both quantity and revenue. Amazon, in particular, is intent on beating conventional retailers on price and convenience. Indeed, even Walmart has launched an online auto parts store, CarSaver, and with online retail as a whole growing enormously year after year, the evolution of the automotive aftermarket is not only inevitable, it is necessary.
As a result, DIY automotive part sales are falling and, in response, many physical retailers are moving towards DIFM (or do-it-for-me, the inverse of DIY), as it is one of the few advantages brick-and-mortar stores still have over online retailers. At the same time, some companies are of course moving into online retail themselves, given that the US online aftermarket is expected to hit US$30 billion by 2025.
Another difficulty the industry faces is counterfeit components, poor in quality but designed to look like the products of more reputable competitors. This represents an enormous cost to the industry; in the US alone, the economic impacts reach US$3 billion annually, and counterfeit products account for 40% of the market in India.
ATR International, meanwhile, is continuing to support its workshop chains. The trade cooperation is focusing on making sure it’s still at the cutting edge of automotive technology, and ensuring that its internal relationships are mutually beneficial ones.
Timeline of ATR International AG
1967: Auto-Teile-Ring GmbH is founded by five German auto parts manufacturers.
1991: First international partners join: France’s Groupe Laurent, with Spain’s Gerstenmaier joining the following year.
1999: ATR International AG is founded, formalising and structuring the group’s global expansion, with 10 shareholders in eight countries.
2000: ATR Akademie founded.
2004: The IPAS system is launched.
2007: The first North American shareholder joins. ATR has more than 20 shareholders.
2008: ATR SERVICE GmbH, a consolidation of all ATR garages, is founded, making the company the largest garage franchiser in Germany.
2011: ATR’s first shareholders in Africa and South America join.
2012: With 30 shareholders, ATR expands to Central Asia.
2017: ATR International now has a presence on all continents, with the addition of shareholders in Australia and South-East Asia (37 in total). External revenues come to €20.1 billion.
It started an academy in Hamburg in 2000 to conduct workshop and shareholder training. Hosting hundreds of events with more than 15,000 participants a year, the ATR Akademie teaches topics including tech, management, sales, legal and IT, giving participants a comprehensive grounding in working for the aftermarket. ATR International also provides a training camp for mechanical apprentices, training individuals to work with diesel, gasoline, automotive electronics and electrical engineering. At the end of the training, the best candidates are invited to participate in a competition, and the winners receive prizes like an invitation to the FIA European Truck Racing Championship. Even those who don’t win come away with invaluable skills, necessary for automotive work.
Such programs are essential in the modern automotive industry, where vehicle brands, types and technologies are proliferating at an exponential rate. Given ATR’s large network of workshops, the Akademie is an eminently sensible strategy; it can’t afford to let itself be left behind on the retail front. After all, ATR’s workshop chains Meisterhaft, AC AUTO CHECK and autoPARTNER have nearly 1,500 locations combined across Germany and Austria, and the international workshop chain ACC is present in Portugal, the Czech Republic, Turkey, Croatia, Romania, Hungary and Greece, with plans to expand further.
The intent behind ATR’s workshop chain is to provide a network of expertise, as well as making sure high-quality products are placed throughout the sector. At the same time, it also takes some of the burdens of management away from workshop owners, allowing them to focus on not just work but also customer loyalty and marketing. With more and more competition in retail, and ever-changing customer attitudes, having a unifying strategic goal behind all these workshops may well secure their future.
According to Roland, ATR International will continue to develop this side of its business. “We will strongly support our shareholders with workshops,” Roland says. “In particular, our new overseas shareholders are very interested in the transfer of know-how from the ATR headquarters, which has more than 20 years of experience in this field.”
While supporting its workshops is undeniably important, the company must also keep on top of industry evolution, such as the increasing digitisation in automotive engineering. ATR is aware of this, and has bought shares in data collection firms and similar companies. With this kind of business partnership, ATR is positioning itself to be on the frontline of technological innovation, so it can provide a more in-depth, personalised service to customers.
“We are a shareholder of Caruso, a telematics project,” says Roland. “With all the new challenges coming from telematics and from the communications side, we’re increasing our cooperation with suppliers, especially the IPAS.”
ATR is also a shareholder in other companies, such as PARTSLIFE, an organisation helping the automotive market to reduce waste, maintain environmental protection and ensure OH&S is upheld. ATR also has a stake in FIGIEFA, the Brussels-based representative for independent European automotive market retailers.
The purpose of these investments is not to earn profits, but to help support ATR’s shareholders and the market. Maintaining a connection to the growing digital side of the market ensures that both the company and its members stay ahead of the curve, while guaranteeing environmental and worker protection keeps the ATR family moving along smoothly in the industry. It’s for this reason that the company has started an international working group – made up of experts from ATR members across different markets, service providers from Caruso and ATR employees – to create innovations in the field of telematics. Essentially, these advances let ATR keep on top of its third goal, assuming market dominance.
Of course, the organisation is not limiting itself to just technology development in its efforts to become the market leader. It will continue to focus on business management strategies and internal communication. It was the first among international trading groups to implement business intelligence tools and strategies, such as an enterprise resource planning system, which allows an organisation to automate many of back-office functions (development, marketing, sales manufacturing, and so on).
It also goes without saying that ATR International plans to support the supplier–shareholder relationship that is such an integral part of its functions. “We have to put local manufacturers in touch with our IPAS, and see where we have the opportunity to help them grow,” says Roland. “It’s helping them to develop, to come into – what is for them – a new world.”
Cartechnic, too, will receive attention, and is being gradually developed into a more global brand. “We will definitively further extend our range of products and services in the field of lobbying activities, purchasing coordination and marketing in order to deliver even more value to our partners in wholesale trade and the supplier industry.”
Throughout this process, the way ATR International grows will be defined by its core values: responsibility, in following the law and respecting the environment; trust, in facilitating a smooth collaboration between members, service providers and suppliers; loyalty, in remaining reliable and dependable; and diversity, in promoting diversity and regarding it as one of the company’s strengths.
The future of ATR International
Perhaps a good historical analogy for the structure of ATR International would be the Holy Roman Empire, which was mostly located in modern Germany and existed for eight continuous centuries (if ATR’s success continues, they may be around for just as long). Like the Holy Roman Empire, ATR International is composed of numerous sub-units that are largely autonomous but have come together in a somewhat democratic way to benefit everyone in the organisation.
However, Roland’s own historical inspiration comes from a little further back in time. “Often during my professional life I’ve found guidance in Hannibal the Carthaginian general, and often dubbed the ‘father of strategy’,” he says. “Before famously crossing the Alps with his elephants, Hannibal said ‘Aut viam inveniam aut faciam’, which means ‘Either I find a way or I will build one’.
“Either I find a way or I will build one.”
Timeline of Cartechnic
1995: Cartechnic is launched in the domestic market.
1998: It is trademarked in the EU.
2002: International distribution is commenced.
2007: Distribution is expanded to Eastern Europe. A trademark licence agreement is reached for ATR International shareholders.
2008: Cartechnic is trademarked internationally under WIPO.
2010: The Cartechnic website is launched.
2014: Distribution is expanded to Northern Europe.
“My job title in German is Vorstand or Managing Director. I am convinced that a Vorstand must be a vorbild (role model) and have anstand (integrity). Maybe that sounds old-fashioned, but in these turbulent times, I think it is more relevant than ever.”
After more than a decade and a half at ATR International, and nearly 40 years in the automotive industry, Roland is aware that the time may soon come to hand over the reins to new blood. “Since I’m 61 years old, we are currently very carefully examining how to hand over the cultural fate and spirit of our group to the next generation,” he says.
That said, Roland has some advice for other business leaders. “Willy Brandt, the former German chancellor and winner of the Nobel Peace Prize once said that nothing comes of its own volition and only
a few things last long.”