Spare parts and OEM market challenges in Poland


Today's directions of the spare parts and OEM markets in the segment of trucks, agricultural and construction machines put more and more demands on manufacturers and distributors. First of all, the standard of service expected by clients in Central and Eastern Europe (the new EU countries) is not much different now from the requirements and standards of the so-called old EU countries. This is due to the fact that Poland is a European leader in road transport with a share of almost 25% in international transport, in addition, the share of road transport in domestic transport is 75% and the fleet of trucks belonging to Polish companies has exceeded 180,000 units. Competitive struggle on the European market, low profitability of transports makes the service life of vehicles long, which results in both price and quality and speed of delivery of spare parts is an increasingly important competitive advantage. In the case of tractors and agricultural machinery after the sales boom, the summit of which took place in 2008-2009, there was a significant decrease in sales of new machines as a result of a reduced share of subsidies to agriculture and the entry of European directives concerning, among others, production standards. Adaptation of cheaper machines by producers to new EU requirements has caused their prices to increase. In addition, the fragmentation of farms (1,4 million) and 24% of manpower employed still in agriculture, low willingness to join producer groups, and the size of Polish food exports (27,5 bln EUR) while diversifying production, are causing constant import of used machinery and demand for cheap, good quality spare parts and their replacements. At the same time, due to the lower efficiency, at least in general farming, the price plays a role. Both manufacturers and distributors of spare parts develop sales in the e-commerce channel, whose growth has been maintained for last 4-5 years in two-digit values. In the area of construction machinery, it important to say that machinery from biggest international producers account for 80% of the machinery park in Poland, with further development of road infrastructure and infrastructure investments largely financed from EU funds and at the same time low profitability of general construction companies, long winter period and fierce competition parts supply and service is quite often a matter of to be or not to be. In all segments discussed, there is a tendency to shorten the delivery time. The 24 hour deadline has now been in many cases shortened, the suppliers are trying to deliver the parts ordered in the afternoon on the next day in the morning, and deliver the parts ordered in the morning on the same day in the afternoon. These trends, such as shortening the distribution channels between the producer and the final recipient, increasing the share of e-commerce sales, and shortening the delivery time pose many challenges for companies operating on the OEM and spare parts market also in the selection and recruitment of the local management and staff, as well as training and motivating. Along with the need of assurance high customer service standards efficient co-operation between all company's departments and clients, exchange of information, flexible price policies, and short claim proceeding became more important than ever.