The Midas car repair shop chain feels comfortable in its market position. Faced with the after-sales services of the big brands, which the customer usually abandons when the warranty expires, and small workshops, with less capacity to respond to trends, the French franchise group is gaining ground in the middle part of the business, the one that is oriented to an increasingly aging car fleet. Midas plans to grow strongly through openings and new products.
“Our regular customer is a car between five and ten years old,” explains the general manager of Midas in Spain, Ramón Rueda. The automotive industry is going through difficult times, with registrations down and customers confused about what type of car to buy, but Midas is taking advantage of the situation. “The park effect gives us an opportunity,†he says.
The French chain does not want to miss the moment, now that the pandemic has been overcome. Founded in Georgia in 1956 and owned by the French company Mobivia, it has already recovered pre-covid activity levels, which has not happened in the automotive sector as a whole. Last year, revenue increased by 11.5%, up to 64 million euros, and stepped on the accelerator in the opening of new workshops. If the annual average consisted of inaugurating between eight and nine a year, in 2022 it reached 18 and, if its forecasts are met, it will close 2023 with more than 200.
In between, explains Rueda, it has been necessary to deal with “the impacts on the supply chain” and the increase in inflation. “Of our revenue growth last year, 30% is actually the result of inflation and, in the first months of this year, in which we grew at 9%, this percentage is higher, from 66”, he explains.
The group, which has close to 20% of its workshops in Catalonia and is jointly owned by the Norauto chain, describes its commercial results as “very good” and prides itself on outpacing the sector in growth. “We have managed to raise margins despite rising costs. It is a healthy growth and with high customer satisfactionâ€, he affirms.
However, the business is not exempt from competitive and cost pressures. Rueda assumes that “everyone has to raise prices” given the rise in the cost of raw materials and warns that “this year the margins are narrowing.”
To gain competitiveness, the group is setting up its own logistics platform and has also opted for electronics. Manufacturers have sophisticated their systems, which threatens to put workshops that do not have the technology to work with them out of the game. “Electronics is gaining weight compared to mechanics, but we have a system that gives access to the technical information of each brand and allows us to make the diagnosisâ€, he indicates.
There is also a commitment to urban workshops dedicated to both cars and motorcycles and other types of mobility through Midas City. The group will launch this year a flat rate for its customers, will bet on products such as air conditioning and has presented an ITV service.
The chain advances in environmental aspects, but downplays the threat to electric car workshops, which have fewer parts and, therefore, fewer breakdowns. “Electrification is a trend, but the question is the pace. The reality is that the number of electric cars barely reaches 2% â€, he indicates, before recalling the delay in Spain in the deployment of charging infrastructure.
The verdict is that “in all scenarios the combustion car endures,” says the manager. “The question is in the capacity that you have to transform your business and in preparing yourself for the future that is going to comeâ€, he adds.
Another of the threats of the workshops is found in the irregular centers in which VAT is charged without. Rueda believes that this trend is going backwards because cash payments have decreased and the control of the Tax Agency over these activities is increasing.
