Market review

Mekonomen’s vision is to make CarLife easier for consumers and companies. This also defines our market, which comprises service, repairs, accessories, spare parts, tyres and all of the associated services available to make CarLife easier.

Our position

Our market is the aftermarket for passenger cars and light trucks and we continuously strengthen our position since we constantly aim to broaden our offering to make CarLife easier. In terms of accessories, we compete with a number of players in each niche from car care and car child seats to animals and entertainment in cars. In terms of workshops, we compete, but also work with brand-affiliated players and we are noticing that the previously sharp division between brand-affiliated and independent players is disappearing more and more.

Our customers

Our customers increasingly value accessibility, simplicity and service. Most consumers and companies want to simplify their CarLife. To meet the demands of our various customers we have thus launched new concepts such as Mekonomen Mega and Medium, with stores and workshops in the same facility and with a very high level of accessibility and service. In Sweden, we have also launched Mekonomen Direct – by calling 0771-72 00 00, a customer can book an appointment in the workshop, regardless of the time of day.

Market size

The total Scandinavian aftermarket for passenger cars amounts to slightly more than SEK 80 billion, of which the service and repair segment accounts for fully SEK 40 billion. We currently have a market share of 14 per cent in the end-customer aspect of this segment through our workshop chains Mekonomen Bilverkstad and MekoPartner.

Growth

In the past, growth in this market has been about 3-5 per cent annually. Following a temporary setback in 2008, the market has once again experienced growth in 2009. The market’s size is primarily dependent on the size and age of the car fleet and on the number of kilometres driven.

The demand for spare parts also tends to rise during recessions while demand for accessories rises during periods of economic growth. When combined, these factors make the industry relatively unsusceptible to economic fluctuations.

However, rapid fluctuations in new car sales may have an indirect effect on the size of the market since new car sales often generate the sale of a used car, which is repaired and refurbished prior to being sold. This results in a chain of repairs of older cars prior to being sold.

Long-term market growth is also dependent on the evolution of cars. On one hand, cars are becoming more durable, which leads to a diminished market for certain components such as exhaust systems. On the other hand, the complexity of cars is increasing, which raises the value of service and repairs. In our assessment, these effects will offset each other in the long term and the growth experienced in the past will continue.

Customers’ freedom to choose reinforced through EU regulations

The brand-affiliated players’ protective position has weakened in recent years through the implementation of new EU regulations. The customers’ position has strengthened through EU regulations, which now enable brand-independent workshops such as Mekonomen, to perform service and repairs on new cars without affecting the new-car guarantee. This is based on the service being performed in accordance with the car manufacturer’s specification and with original spare parts as compliant with the EU definition. You can thus be sure that the guarantee applies when servicing or repairing a car with Mekonomen Bilverkstad or MekoPartner. In addition, independent workshops are also entitled to the requisite technical information, equipment and special tools on the same terms and conditions as the brand-affiliated workshops.