Rapidly improving the operational and financial aftermarket performance of one of the largest and most traditional car makers worldwide in Brazil

Our client

One of the most traditional car producers in Brazil, counting on over 200,000 employees and over 20,000 dealers worldwide, our client's dynamic brands offer a comprehensive range of vehicles in more than 100 countries around the world.

Background:

• Despite its large and robust operations, respectable market-share and significant customer retention, our client was facing bottom-line difficulties in the aftermarket: business margins had fallen far below acceptable levels, and had been showing no trends to recover.
• The local aftermarket is a large and promising one, but has been facing strong competition from several independent local producers and distributors, supplying the market with low-quality products at prices that pressured margins even more.

Approach:

• Relying on top management's full support, a rapid performance improvement initiative targeted to the aftermarket: a facts & figures operational joint-analysis with a revenue and cost-drivers examination, as part of a '8-weeks' support, completed by defining levers & measures for immediate action/implementation.
• Revenue generation processes, pricing and sales allowance/policies, as well as sourcing and supply-chain parameters were revisited and readapted with the involvement of key external service providers, strategic suppliers and dealers.

Outcome:

• Jointly a yearly USD 30 million potential in sales revenue increase has been identified, double-checked and translated into pricing and sales policies changes.
• Over USD 80 million in cost saving opportunities have also been identified, especially from inbound logistics, and warehouse performance optimization.
• Besides that, a USD 150 million working capital reduction has been implemented, based on parts-carrying and warehouse optimization measures.