JC Auto considers growth options
The car parts distributor JC Auto is undertaking an expansion drive that could be accelerated by an Initial Public Offering (IPO) on the Warsaw Stock Exchange (WSE) within months. JC Auto's ambition is to establish new markets in Hungary and Czech Republic, while broadening its range of products and services well beyond its original niche activity in Poland.
Product Polski
JC Auto was founded in the early nineties under the original brand name of Japan Car Auto, with the business plan of filling a market niche by operating as the only firm in Poland supplying parts for Japanese cars. The move away from specialization, and towards a universal offer of parts for any brand of car has been made now that JC Autos has effective logistics in place.
The Central Europe Trust (CET), a British-based consultancy group, is advising JC Auto on how best to secure new finance to achieve its goals. "(JC Auto) can go to banks, large funds or private investors," says Piotr Kołodziejczyk of CET's Warsaw office. "In any case there will be interest in a business with such a successful history and such opportunity in the future."
JC Auto's sales figures are up 40 percent on last year, and turnover is now more than three times the figure it was four years ago. Revenue is funding growth, but with all of the firm owned by its founder, his wife and his brother, a sale of a minor portion of company shares is seen as a further opportunity for propelling growth.
"(Majority shareholder) Jerzy Grabowiecki holds 90 percent of the shares," says Zbigniew Dąbrowski, Marketing and Key Account Manager at JC Auto. "It is not a problem to part with, for example, about thirty percent of shares to fuel growth." Dąbrowski is certain that JC Auto's business model will work abroad, and that the time is ripe for expanding fast.
Into Europe
EU membership will considerably lower import taxes on Japanese cars across Central Europe, bringing prices down most strikingly on luxury models. This is good news for JC Auto, whose core business is still in the sale and distribution of Japanese parts. CET's Kołodziejczyk speaks of 'latent demand', especially in the Czech Republic, where the profile of car consumption is predicted to change in JC Auto's favour this decade.
"Around fifty percent of cars in the Czech Republic are locally-made Skodas," says Kołodziejczyk. "But a vast number of them are over ten years old. These will need to be replaced soon, and very possibly by cars that JC Auto provides parts for." As the distributor of a complementary good, JC Auto's core business will ride on new demand for Japanese cars.
"The same space in the market exists in Hungary and the Czech Republic that we found in Poland," says Kołodziejczyk, intending to use the same business model abroad that has brought success to JC Auto at home. "For the Japanese suppliers who we now have established great relations with, it makes no difference if we do a good job in Poland, Hungary or the Czech Republic."
Analysts have a identified a threat to the new car business after EU membership, as tariffs on the import of used cars, previously buoying new car demand, will be dropped. According to JC Auto, this characteristic of the freer market should also play into their hands, as lower used car prices increases demand - and therefore the need for their products.
Product Polski
JC Auto was founded in the early nineties under the original brand name of Japan Car Auto, with the business plan of filling a market niche by operating as the only firm in Poland supplying parts for Japanese cars. The move away from specialization, and towards a universal offer of parts for any brand of car has been made now that JC Autos has effective logistics in place.
The Central Europe Trust (CET), a British-based consultancy group, is advising JC Auto on how best to secure new finance to achieve its goals. "(JC Auto) can go to banks, large funds or private investors," says Piotr Kołodziejczyk of CET's Warsaw office. "In any case there will be interest in a business with such a successful history and such opportunity in the future."
JC Auto's sales figures are up 40 percent on last year, and turnover is now more than three times the figure it was four years ago. Revenue is funding growth, but with all of the firm owned by its founder, his wife and his brother, a sale of a minor portion of company shares is seen as a further opportunity for propelling growth.
"(Majority shareholder) Jerzy Grabowiecki holds 90 percent of the shares," says Zbigniew Dąbrowski, Marketing and Key Account Manager at JC Auto. "It is not a problem to part with, for example, about thirty percent of shares to fuel growth." Dąbrowski is certain that JC Auto's business model will work abroad, and that the time is ripe for expanding fast.
Into Europe
EU membership will considerably lower import taxes on Japanese cars across Central Europe, bringing prices down most strikingly on luxury models. This is good news for JC Auto, whose core business is still in the sale and distribution of Japanese parts. CET's Kołodziejczyk speaks of 'latent demand', especially in the Czech Republic, where the profile of car consumption is predicted to change in JC Auto's favour this decade.
"Around fifty percent of cars in the Czech Republic are locally-made Skodas," says Kołodziejczyk. "But a vast number of them are over ten years old. These will need to be replaced soon, and very possibly by cars that JC Auto provides parts for." As the distributor of a complementary good, JC Auto's core business will ride on new demand for Japanese cars.
"The same space in the market exists in Hungary and the Czech Republic that we found in Poland," says Kołodziejczyk, intending to use the same business model abroad that has brought success to JC Auto at home. "For the Japanese suppliers who we now have established great relations with, it makes no difference if we do a good job in Poland, Hungary or the Czech Republic."
Analysts have a identified a threat to the new car business after EU membership, as tariffs on the import of used cars, previously buoying new car demand, will be dropped. According to JC Auto, this characteristic of the freer market should also play into their hands, as lower used car prices increases demand - and therefore the need for their products.
