As AIA Canada began its second season of the Curbside Chat Podcast Series, current AIA Chair Bob Jaworski interviewed Mauo Cifelli, President & CEO of Groupe Del Vasto.
As a past chair of the automotive Aftermarket Warehouse Distributors Association, (AWDA), Cifelli provided an update on the association’s activities, including an update on the AWDA business and educational conference that’s scheduled to take place from October 31 to November 1 in Las Vegas, alongside AAPEX at the Sands Expo.
Cifelli said that AWDA has endorsed the association’s Manufacturer’s Advisory Council recommendation to align and overlap AWDA with this year’s AAPEX event.
Additionally, as the economy opens up, AIA Canada has also announced it will be hosting Canada Night at the Venetian in Las Vegas during industry week this coming November and tickets are rapidly selling out.
Supply disruptions
Moving onto other topics, Cifelli discussed the ongoing challenges facing the automotive aftermarket, including supply disruptions.
He noted that even prior to the onset of COVID-19 last year, there were already ripples appearing due to issues such as the U.S./China trade war and demand/supply shocks that resulted from that. Since then, Cifelli noted that we’ve essentially seen a “domino” effect.
Not only did manufacturer shutdowns last year impact supply, but shipping items from overseas became extremely problematic.
From blockages in the Suez Canal to difficulties and delays surrounding the unloading of supplies at major ports in the U.S. and Canada, the result has essentially been a perfect storm for the industry.
Nevertheless, some of these challenges are being addressed.
These include re-evaluating supply chains to reduce dependency on off-shore locations for manufacturing and distribution as well as reviewing existing strategies such as lean inventory management and just-in-time replenishment practices, whose weaknesses have been exposed over the last 18-months.
When faced with the kind of disruptions we’ve seen during COVID-19, Cifelli said such practices have proved “crippling” to service levels and that it has impacted not just the automotive parts industry but other sectors as well.
Different markets
Regarding the aggressive push by major auto parts retailers in the U.S. into the wholesale side of the business, Cifelli noted that while similar trends have been witnessed in Canada it was important to draw distinctions between the two markets.
He said the while there are no significant barriers of entry to the Canadian market for big U.S.-based retailers, our country’s population base, which is much more widely dispersed than the U.S., does present some unique operating challenges, especially for those companies looking to enter the market.
As a result, Cifelli said that incumbent players in the Canadian automotive parts space have an advantage in that they know the landscape, know their customers and know the nuances specific to the markets they operate in.
“From my perspective,” he said, “competition is competition and you have to be ready to compete at all times.”
In looking at potential threats to the industry, Cifelli remarked that while the electrification of vehicles is currently a hot topic and growing vehicle complexity is leading to a decline in the DIY segment (at least as it relates to modern vehicles), the technology itself is not currently a huge threat to the aftermarket parts distribution model.
What is, however; is the way in which OEMs are creating a customer experience model for vehicle owners and the impact that could potentially have on other businesses within the larger automotive ecosystem.
“For us,” he said, “it’s about making sure we understand and that we adapt.” Cifelli also said it was important for the industry not to compartmentalize B2B or B2C segments but rather to see it as B2E—business to everyone.
“It really is about how we use technology to bring the entire automotive ecosystem together,” he said.
“And that to me, really is the importance of how to leverage technology within our own businesses.”
Unique business model
The podcast also included segments that discussed Groupe Del Vasto’s unique business model in the industry that includes not only a traditional warehouse distributor element.
But also a wholesale division with 16 locations branded under the AutoValue name, plus a franchising arm with Auto Mecano, Mister Muffler and Octo Auto Service Plus locations.
This setup allows Groupe Del Vasto more control over creating the value proposition for the customer, with a robust distribution network that’s able to support franchise locations by providing them quality service and competitive pricing.
Additionally, Cifelli noted that a major part of Groupe Del Vasto’s business is still conducted with independent auto parts and service centres and by leveraging the power of data, the company is able to make strategic decisions to optimize future success.
Cifelli also discussed the important role that associations play within the industry and the tireless efforts of volunteers to ensure the automotive aftermarket continues to have a collective voice that represents its interests.
“I’ve always felt strongly about getting involved and working together with others to safeguard our future,” said Cifelli.
“Whether we are faced by issues such as international trade and global tariffs, where we have an opportunity to lean on associations like AIA heavily for guidance and support, to local issues, such as the Your Car, Your Data, Your Choice campaign.”
Regarding this initiative, Cifelli said that it was “nice to see AIA and the Auto Care Association working together and keeping each other updated on progress and joining forces to push forward.”
But ultimately, he stressed, success for and within the aftermarket is about the people who devote their time, energy and passion to not only making this industry what it is today but ensuring its interests are protected going forward.
