It takes two to do good business too || Interview: Tyre Review

It also takes two to do good business

INTERVIEW WITH WIESLAW RUTKA, CHAIRMAN AND SHAREHOLDER OF MASTER-SPORT-AUTOMOBILTECHNIK AND MICHAEL SAITOW, CHAIRMAN OF SAITOW AG, OWNER OF THE DIGITAL PLATFORM TYRE 24.DE, TALKS TO SŁAWOMIR GÓRZYŃSKI

• Our readers have known Saitow and its digital platform Tyre24 for many years. They know a little less about Master-Sport-Auto-mobiltechnik.

Michael Saitow (M.S.): – Let me first explain why this meeting has come about at all and why it is important for the automotive market in Poland, but not only. In Madrid, at the Madrid Motor Show, we met for the first time with President Wieslaw Rutka. As our Tyre24 platform offers spare parts in addition to tyres and rims for vehicles, Master-Sport’s offer met with our great interest. Their products were not presented at our company, but we came to the conclusion that cooperation between our companies should bring benefits to both of them. There we arranged talks in Poland on possible closer cooperation. Some parts offered by Master-Sport are also manufactured by other companies. Mainly for premium brands. However, the Master-Sport brand is not as well-known as the products offered by various companies. So the question arises why the Matsre-Sport brand is not widely known, if the quality of these products is the highest? The cooperation between us would be to sell Master-Sport’s very good products at better prices in the region of southern Poland, among others. This would be provided by our Tyre24 platform, on which these products would be offered.

• How large a proportion of Master-Sport parts are on the Tyre24 platform?

M.S.: – At the moment, we have around 15,000 spare parts on our platform produced under the Master-Sport brand.

• Question to CEO Rutka. Do you manufacture all parts under your own brand or do you cooperate with other companies in this regard?

W. R.: – We also manufacture products under other brands. We specialise in complete suspension kits or components for many car brands. These are parts manufactured for the Swiss Automotive Group, LKQ and for the OEM market. We have one main own brand with which we present ourselves at trade fairs and several others, so that there is no conflict of interest with our customers. Especially in those countries where the competitive struggle is based on price alone. We try to operate in such a way as to avoid a price war. In addition to this, we also have an offer of so-called non-labelled products. However, these distributors know who the manufacturer of these parts is. We do a full service for planned, ad hoc and express orders. At the moment, we rely on the brand, on internet sales, on our core brand. The market is evolving so fast that if we don’t get on that train now, we might not get on it in a while. We want to keep up with the changes that are happening now. We know that 30 to 35 percent of parts, including tyres, are sold online in Poland. The same is starting to happen in other countries. That is why we wanted to enter a universal platform that offers parts of many brands and manufacturers. Tyre24.de is such a platform. It offers a simple delivery system where the customer does not have to pay in person, but the platform collects the payments itself. For us this is the perfect solution.

• How did it happen that you found yourselves in Gorlice?

W. R.: – I was simply born here.

• In a word, was the wolf drawn to the forest?

W. R.: – That is correct! I would like to add that I am a shareholder not only in this one company. I have shares in ventures with different business profiles.

• Master-Sport is headquartered in Munich, and what is located in Gorlice?

W.R.: – Yes, that is correct. We have established a research and development centre in Gorlice. However, there are also other entities that are related to the production of car spare parts. Everything in my business is focused on motoring. And it started with components for cars driving in sports competitions. As we know, this type of parts must be more resistant, durable, or simply better than those for “civilian” vehicles. Many car manufacturers also wanted to receive this type of parts. And so it began to develop. I would like to add that a lot of these components are based on our innovations. That is why these products are better than standard ones. That is why we have practically no complaints. And if there are any, their rate is 0.2 percent. In this respect, we are 10 times better than other parts manufacturers on the market.

• Congratulations on these results.

W.R.: – But this requires an enormous effort and hard work. We demand a lot from ourselves. It is not just that we are pressured by the customers of our products. We ourselves know that we have to make parts that are the best on the market. We gather information from those who operate cars with our parts, and from mechanics who assemble the components. We discuss many details of design changes with them in order to achieve an even more reliable and competitive product. Factory-built cars have disadvantages. Many brands are sold to countries with poor quality roads. Cars, and therefore the components used to build them, wear out much faster. Suspension components require a lot. They are usually the key components in the life of a vehicle. If our products can cope with such conditions, no terrain is a problem for cars with our parts.

• At the moment, every product from white goods to cars is said to last a maximum of 6-8 years. Products have to wear out in order to sell new versions and to keep the proverbial business moving. What do you make of this statement?

W.R.: – We have a slightly different business philosophy. We want to tie the customer to us by the fact that our products are reliable, they are meant to last for many years. And this can be seen in our suspensions. In my opinion, we are one of the best in the world in terms of the number of suspension kits available and the quality of their manufacture. We offer 400 solutions in this field. Moreover, we sell annually tens of thousands of suspension sets (wishbones) only on the Polish market. The customer appreciates this. Interestingly, we have subscriptions for our components and, just like in the old days, people queue up for them. We are trying to keep up, although demand is growing faster than supply. However, we try to complete orders as quickly as possible.

• Apart from the cooperation with Tyre24 platform, do you also cooperate with other online entities and parts distributors such as Inter Cars, Inter Team, Moto-Profil?

W.R.: – I cannot answer this question directly, as we have confidentiality agreements in place. All our parts are sent to the central warehouses of our partners throughout Europe, from where they are distributed in the B2B sector. At the moment, we have information that due to the development of the pandemic, we will also send our products directly to the target entity, bypassing the central warehouse, which is supposed to shorten the time of delivery and response to the needs of the local customer. The automotive market has accelerated very strongly in recent months.

• I understand that the production of parts at Master- Sport takes place in Germany and Poland. Do they come from one or two factories owned by you?

W.R.: – We receive parts from various factories, both ours and foreign ones. In the Master-Sport plants these parts are assembled into complete subassemblies, such as suspensions. However, some elements, such as oil filters with a magnet, air filters with particles, nobody has but us. These are unique products for which we have patents. As for the lithium-ion starter battery with heat sink, which will be able to be mounted directly under the hood, we are still testing it. If we succeed, it will be a technical breakthrough. Whoever develops a solution first earns money. The next one will have lower revenues, and so on. It is a race for first place and a lot of money.

• In Gorlice you have an experience centre. What kind of research is carried out there?

W.R.: – We start with an idea and visualisation of the project on 3D printers, on which we also make prototype elements. On their basis, moulds are made in production plants, where test specimens are created. In order to obtain the homologation, a part has to pass laboratory tests, be fitted on a car and simulated usage for four seasons. Such a component must be tested in all conditions, even extreme ones.

• How important is the aftermarket for you and why do you care about the Polish market? Mr. Rutka and Mr. Saitow met in Gorlice to achieve what goals? What does it mean for both companies, what does it mean to establish cooperation between you?

W.R.: – The situation has changed since Poland joined the European Union. Before, we did not give the Polish market such importance. After joining the EU, all markets have become very close to each other, they have standardised in terms of regulations and solutions. We have a strong position in Poland. Our market has the disadvantage that everybody here fights to the death with prices. This is a death trap and we did not want to take part in this war, but in the end we had no choice but to establish ourselves here. In order to strengthen our presence here, we had to join in this game. The synergy of what we want to do with Michael and his online platform Tyre24 can give us a big acceleration effect, the so-called vertical take-off. That’s what we’re working on at the moment. There’s the platform, there’s the accessibility, there’s the system that knits. And now including us in that system should give us an acceleration effect.

• In recent years, a lot has been said about electromobility, electric and hybrid cars. Master-Sport also trades in batteries, which are known to contain many harmful substances. What pro-ecological measures do you take so that your production does not harm the environment?

W.R.: – We would like to make such a battery that not only would not cause ecological problems, but would also weigh enough to be carried by a not very strong woman. Such a battery could be taken home every day upon arrival and fully charged, so that the next day we could drive normally. The idea was to make this possible for people living in multi-family houses. We explored the conditions for manufacturing and using such batteries. However, the cost of manufacturing it was currently so high and the price so high that not everyone could afford such a battery. This does not mean that we have completely abandoned the idea. This project is on hold for the time being. We are waiting for the prices of raw materials that are used for production to come down. Perhaps in six months or a year we will return to the implementation of this idea, and the price will be acceptable to customers and everyone will be able to afford to buy such a battery. This type of battery would support a rather small and not too heavy car, which we would drive only in the city.

• But it would have to provide the ability to travel 300-400 km.

W.R.: – For such a small city car, we were thinking more about 100 km, because nowadays many families have two or even three cars. The electric one would usually be used for driving around town to take the children to school, to take them to extra classes, to run some errands or to do some shopping.

• As the name of our magazine says, Przegląd Oponiarski is addressed to tyre repair shops, although in recent years they have diversified their offer to such an extent that it is now difficult to find a shop dealing only with wheels. Out of almost 12,000 garages, probably 90 per cent also offer other vehicle maintenance work? Is this the base on which you want to build?

W.R.: – When changing the tyres, the mechanic sees what else could be done to the car. He sees that the brake pads and discs need replacing, and that the suspension components are also worn out and need replacing. The idea is that when a customer comes to have his tyres changed, he will also have several other car components repaired in the same workshop. The idea is that, on Michael’s platform, in addition to tyres and rims, the customer should also be offered other automotive parts that are subject to wear and tear, which can be replaced in the same workshop. If all of this can be dealt with in a single order on Tyre24, the customer will be happy because he does not have to travel to another location. When looking for a good tyre at an affordable price, he takes care of a few other things that need to be done on the car. This idea has to work.

M.S.: – I would like these two worlds – the world of production and e-commerce to merge. So that the customer gets the best product at the best price and in the shortest delivery time. The system on our platform works in such a way that if a customer orders a part by 6 p.m., he must receive it by 7 a.m. the next day. Therefore, to reiterate, the most important objective of these actions is to provide the customer with the best product, at the best price and in the shortest time.

W.R.: – By approaching the subject in this way, we will achieve the effect that each part ordered on the platform together with other products will be cheaper than if they were ordered separately in the company’s shop. The customer will start to count every penny and will prefer to place a complex order in one place and have his car repaired also in one place.

• What will you consider the success of this cooperation in a few years’ time?

M.S.: “This cooperation will enable us to cut a substantial slice of the European market out of this huge automotive pie. It is very important to remember these three principles: the best product, the best price and the fastest delivery.

W.R.: – There will be such a synergy from combining our efforts that I don’t have to think twice about joining this platform. Knowing Michael, we immediately want to bind ourselves for at least five years. Then – I hope – this cooperation will extend for another five years. We already have concrete plans in terms of turnover and sales. This is not a project that we will launch in a year or two. It is already happening. Based on Chairman Saitov’s long experience, his knowledge of customer needs, the analytical work his company has done, success must be guaranteed. With this knowledge, I am sure of it.

• One last question for Mr Rutka. How did it happen that you found yourself in Germany and why did you start your business there?

W.R.: – At the time when I started, Poland was just laying the foundations of capitalism. Nothing was known or stable. I’m thinking especially about the law. Let me just say that we still have a big problem with it. German law is very stable, the economy is also very stable. So the choice was easy. In addition, there was also a gap between us in terms of research and development. After 30 years of change in our country, a lot has changed in this respect. We look much better. However, German laboratories had and still have excellent tools and equipment. Their documents and certificates are recognised the world over. With over EUR 20 billion worth of spare parts, Poland has also become an important player on the global market. The brands and research and development centres operating here are also already recognisable. My company participates in practically every automotive trade fair. We are present in Asia, the Arab countries, Africa and, of course, Europe. Our plans have been slowed down somewhat by COVID-19, but we are not giving up. In some countries, without a personal visit, a look in the eye and a firm handshake, there is no chance of doing good business.

• Thank you for the interview and I wish you successful transactions.