Interview with the head of the Fit Service network Tatyana Ovchinnikova about the boom in the car service

In 2022, after the departure of foreign automakers from the Russian Federation and sanctions restrictions, the auto parts segment showed an increase of 4.6%, to 1.9 trillion rubles, was calculated in Technologies of Trust (former PwC). About the fact that car owners began to contact car services more often, about deliveries and prices for spare parts, and also why services do not accept customers with their components, “Kommersant” was told by the director of the Fit Service car service network Tatiana Ovchinnikova.

How has the current crisis affected the service industry?

– In March-April last year, car owners began to quickly do repairs, realizing that there might be some problems with spare parts. There was a very large surge in demand. In addition, the dealer segment began to shrink, and the car owner is still used to the service – not everyone will contact, for example, independent service stations, where there is no guarantee and service history.

A car is the second most important purchase in life. First real estate, then cars. Now it is difficult to change the car, the car is protected. This is especially noticeable in the bodywork direction – colleagues report that they have everything scheduled for two or three months. Previously, if something rattles in the car, but does not affect the speed, then the driver was in no hurry to the station. But now the attitude has changed.

– All participants in the industry have benefited from these changes?

— It is more difficult for independent services now. Price history – they, like dealers, began to lower prices for services. But this is not a long game, business ceases to be efficient without a fair price. And they are now starting to refund prices.

We, as a network business, were in a more advantageous situation when the brands of spare parts began to leave. Fit Service is a subsidiary of Rossko, the market leader in the distribution of spare parts. We had our own stock of spare parts, and Rossko quickly found manufacturers of those brands that could replace the departed ones. Already in the fall of 2022, the warehouses were fully stocked with the necessary items. Expensive and well-known brands left, and brands came that, relatively speaking, are unknown, and their price is low – spare parts in general have become cheaper both for us and for consumers.

– Cheaper analogue brands that came, they are probably not homologated for brands?

– No, they come from factories, from conveyor belts. We just used to overpay for the brand. Many new brands are manufactured at the same factories, on the same lines, just under a different name.

– Do you mean now spare parts for maintenance, for small repairs?

— Yes, there are no difficulties with them on the market. There are difficulties only with new cars that come to the Russian market, as well as with the bodywork direction – we do not feel this very much, but those who specialize in body repair feel it. Now 74% of spare parts out of 100% are available, that’s enough.

– And there are no problems with electronics, with electronic units?

We don’t collide.

— Judging by the reporting of Fit Autoservice, last year in terms of profit was the best since at least 2019. Is this the effect of the flow of customers from dealers?

– We would not say that everyone went to us from dealers. Of course, dealers have changed, they began to bring cars, they left this history of post-warranty service. This is essentially not a dealer, just customers are used to going there. But someone, of course, went to us.

If we talk about financial indicators, then the decisions made even before the event itself influenced. It feels like we’re preparing for this crisis. We refused customers who come with their own spare parts. Quite often, requests to put something are counterfeit. We give a guarantee for both work and spare parts, therefore, by making such a decision, we secured ourselves, and our profit grew due to the fact that the client’s check grew.

– Now you can’t come to you at all with your spare parts?

– They don’t, no. According to the law, if the client arrives with his own spare parts, he signs a document stating that he himself is responsible for this. But this is not our approach.

— But there are problems with large units. What happens if I suddenly find an engine abroad?

– There are always exceptions. If the partner takes on this responsibility, perhaps someday this is done. But for the most part, this is an exception. Our mission is service. Do not puzzle the client so that he himself searches. On the contrary, we say: “You have a problem, let’s solve it.” Our stations are in 153 cities of Russia, and we have 200 partners – owners of car services. If someone has a request “help me find the necessary unit”, then according to the rule of five handshakes, these tasks are solved.

— And if I suddenly want the original?

“It’s just a question of time. We try to find – we have both our own warehouses and warehouses of third-party suppliers. For us, the most important thing is that this distributor has documents.

— Are there such documents now?

– Certainly. Each distributor, of course, has documents and certificates for delivery.

Has the client profile changed?

— The client profile itself has not changed dramatically. The average age of cars in Russia is growing, the fleet as a whole is aging. Today, the most popular brand on our services is Toyota, followed by Lada. The age of the cars that visit us more often than others is more than 15 years. Their 33% in 2023. In second place – from 10 to 14 years.

— Are there many brands of cars from China?

– While only 2%. This is post-warranty. During the first quarter, the number of car arrivals of Chinese cars increased by 7%. The share is gradually growing.

– In large dealer holdings, after mobilization, they talked about a shortage of personnel, including mechanics. Have you felt it yourself?

– Now the price history has turned into a struggle for personnel. There is a shortage of personnel, employees are bought out – they set rates twice as high as the market. At the same time, this is not very clear to us, because if such salaries are paid, then there is no profit left. We are now pursuing a restrained policy in terms of personnel: we are raising rates somewhere, where we see in the market that this is necessary, we work a lot with non-material motivation, corporate culture.

– For some models from China, they say on the forums that their sellers do not know how to service them. Have you had cases with such cars?

— With some brands, no one knows what to do. But this is reality. You can close your eyes to her, but there is a client who needs help. The car park is always changing. Now Chinese brands have entered, once other cars entered. We have individual specialists who, every day, in different ways, with different programs, are looking for answers to questions that arise in the service. There is such a thing as crossing – we select the necessary spare part. Sometimes you have to order five spare parts to see which one will fit.

Doesn’t that add a lot to the cost? It is unlikely that the client pays for five.

– Of course not. We are just issuing a refund. We are generally not in favor of keeping spare parts in our warehouses. Now any major distributor provides delivery 6-8 times a day, someone four times. And this is enough to work under the order. In the warehouse, only the most necessary consumables: technical fluids, filters, brushes, pads, belts, candles. Imagine if a warehouse for 10 million rubles. lies, and already the fleet has changed, and you can throw out 5 million. We have a maximum of 500-700 thousand in cash in our partners’ warehouses, and they should turn around one and a half to two times a month.

— Do you expect the service market itself to grow further?

– In quantity – it is improbable. In Russia, the average car mileage per year is decreasing. And many factors influence this: gasoline has risen in price, they take care of their cars … Also, sales of new cars are far from pre-crisis levels. Therefore, the park itself is decreasing – there are fewer cars on the roads of the country. But there will be more repairs – and it’s no longer just an oil change. With 60-100 thousand mileage and after five years of operation, repair work will be required, and not just maintenance. But the number of players will decrease.

— Is the market in money?

– Will grow. Because prices will rise, services will rise in price, because salaries are growing, and more spare parts will be sold for the service, because there will be repair work. Even those used cars that are now coming to our market from abroad will require repair work. Plus, in our field, a lot depends on the dollar exchange rate. We work for imports – manufacturers of components and spare parts in Russia can be counted on the fingers.

Just today, we summarized the data for July – in the company, plus 25% of revenue compared to last year. Although the network grew by only 4%.

– What do they do in Russia from spare parts?

— They produce technical liquids, but they are not in our portfolio. Basically everything is imported. Our product line includes Russian filters, suspension elements, electrics, radiators, auto chemicals.

– In July, on the weakening of the ruble, how much did the price of spare parts rise on average?

– By 5%. The average check today is 7800 rubles. In June, it was 7600. That is, the growth was only 2%. If we compare the average check with last year, it has changed by 28%.

— Do the main flows of spare parts come from Turkey, China?

– More from Korea and the UAE.

— But spare parts for the UAE market are not designed for the Russian climate, are they?

– There are mostly technical liquids.

Interviewed by Olga Nikitina