Improving efficiency in the trade with automotive spare parts

Towards a more efficient and sustainable trade with automotive spare parts

Albania is one of the most important markets for used cars in Europe, proportionally to its dimensions. Of the 450’000 registered vehicles, 95% are used cars from Italy, Germany and the UK. Albanian drivers are used to repair their cars with spare parts and therefore Albania also has one of the largest care wrecker industry in Europe. Despite its importance the sector is yet very inefficient and unorganized with numerous small players and a considerable amount of informal business. Car wreckers traditionally do not have any kind of ERP system, nor stock management, nor standardized and organized operative processes. Nor is there a common terminology to identify car components in the multi-language business (Albanian, Italian and English).

Finding a spare part is a nightmare for drivers or auto mechanics. They have to call and personally visit different car wreckers, with the broken piece in hand and hope to find it: if the car wreckers themselves find it in the midst of the chaos that they usually have in stock. Clients lose time and car wreckers lose good business. Dealing with defunct pieces and theft in stock are further challenges that create a lot of frustration. Finally, the toll on the environment of the sector as it is currently functioning is considerable as there are many small businesses that dismantle cars everywhere, without any procedure or caution nor safety measures for themselves.

Against this background the vision of the Swiss-Albanian founder team of LEKO is to realize a supply chain-based platform which will benefit both car wreckers and car repairers and shall set a new standard in the car dismantling industry in Albania. For car wreckers it will offer a management system to digitalize their spare parts stock and a selling platform on which they can present their pieces in acustomer friendly manner, with guarantee terms and discount rates and the possibility to push sales in a more targeted manner. Car repairers on the other hand shall more easily find and select the desired products with all the necessary information and possibility for electronic payment. A dedicated logistic service through trucks shall ensure timely delivery to customers. In the long run the platform shall become the nucleus of a network of professionally working car wreckers and auto repair businesses, first in Albania and later expanding into the region. Apart of the investment of the founding partners, a loan from SECO Start-up Fund has helped finance logistics and working capital of the business.

The implementation of the ambitious plans over the past two years brought with it a few nuts to crack, first and foremost to find enough scrap dealers willing to spend a considerable amount of time to organise, record and digitise their warehouses. It quickly became clear that the car wreckers did not just need software, but a lot of support in process organization and training. The IT system had to overcome teething problems and at the same time users had to gain confidence that the platform would work and bring them better business. Then there was the challenge of logistics planning to deliver the parts - correctly and in time – as promised. Obviously, Covid-19 related restrictions did not help in the crucial early expansion phase of the business.

But the dedication and persistence of the founders so far has paid off: The company is currently serving thirteen customers, out of which seven in Italy. It has built fifteen quality jobs (car wreckers even had to employee people) and is making an important contribution to the professionalisation, digitalisation and greening of an important economic sector in Albania and Italy.