Apr 01, 2023 Warwick Robinson Nexus; Aftermarket
At the 2023 Nexus! Business Forum, recently held in Montreal Canada, distributors, suppliers, and aftermarket service organisations from around the world were brought together for presentations and business meetings. CEO Gael Escribe’s central message was around the aftermarket developing an “urgent” response to address meaningful environmental, sustainability and governance goals (ESG). “Its time to think about our legacy, and what our grandchildren will think of us. It certainly won’t be simply about KPI’s and profit margins. We need to create the momentum of urgency” he stated at an early morning press briefing.
Escribe remains buoyant about what he describes as the coming “golden age” of the aftermarket, with demand growing to cater to an ageing fleet of ICE driven vehicles. He continued ‘The market is shifting, and now is the time to optimise and consolidate, with the aim of building reserves to fund the approaching next decade’s changes and challenges”.
He contends that Nexus is aware of how giant automotive aftermarket companies have faced challenges in the past, and he is keen to look at different solutions – including acquiring companies that are at, or can rapidly scale. When pressed on his views on North American activities, he stressed that the main aim currently is to support European suppliers in growing their North American market share, however to simultaneously enable American manufacturers to become “more global” by leveraging Nexus’ existing network, explaining that he is proud of the “real collaboration” that these two forces have at their fingertips through the proactive model which Nexus provides.
Nexus describes itself as “the leading automotive aftermarket (AA) global community, shaping the future of the automotive aftermarket”. As one of a handful of large European international trade Groups, Nexus has more than 150 members in 140 countries, allied with 78 global suppliers. In North America, distribution members include the Automotive Parts & Services Group, Advance Auto Parts, VIPAR Heavy Duty, Automotive Parts Associates, and Uni-Select Inc. SA based Motus Aftermarket and Worldwide Automotive Group (WAG) are members, with representatives from both in attendance at the conference.
Day one of the event saw the inaugural Nexus Climate day where a number of speakers presented compelling arguments for ”greening” initiatives addressing emisions, remanufacturing and the challenges of more efficient core collections, which are imperative to maximise the opportunity. It is always interesting to attend an listen to speakers discussing these heady issues, especially coming from a perspective where our local environment presents somewhat “different” challenges.
While the electric vehicle market in SA is certainly gaining some ground, the realities of inconsistent power supply mean that we continue to live in two weirdly opposing spaces. In one we need to keep pace with the European and American markets, specifically in the manufacturing of new technologies – or risk being left out of the fold. In the the second, we content with the reality of having millions of generators firing up for 4-8 hours day simply to keep the wheels of industry moving. Its difficult to take the latest Euro emission controls on vehicles seriously when we know that these generators are by and large the most simple and least “green” examples of ICE out there! Never mind the lack of infrastructure for charging these vehicles on our road network – how would I conceivably charge my electric car at my home or office is the first concern!
When a presenter displayed a world map of emissions it is abundantly clear that Europe and North America have to address the issues urgently. China too, was attributed over 30% of the responsibility for global emissions, but its important to remember that the developed world has outsourced much of its production to the East for decades. So exporting the problem to the East does not mean that the Western countries are off the hook.
In our own context, the African continent as a whole is reportedly responsible for less than 5% of global emissions. While listening to all the talk of electric mobility and its association with greening and “sustainability”, I could not help thinking of the many reports I have read on how so many of the minerals needed for electric mobility have historically been mined in some seriously unsustainable conditions, specifically for the people who actually retrieve them from mines in central Africa. So it’s a complex and multifaceted issue but I must admit that listening to reps from Nexus and the variety of companies who presented at their climate day, I did get the feeling that their approach feels a bit more realistic and grounded.
Its helpful to define the different types of emissions, and the Roland Berger global consulting firm provided an informative primer on ESG initiatives including the following definitions:
In the context of this last point, it was offered that the frequency of parts delivery to garages was an area of significant concern and, accordingly, of potential gains. “So we ship with electrical vehicles to have a good appearance, but we keep shipping 10 or 20 times a day. This is an example where the sense of urgency has to be tackled. If the big guys decide all together to put pressure on the garage to be more organised, we will properly reduce tons and tons and tons of emissions” Escribe explained.
Providing better tools, service and communication perhaps via software is an area to explore. Its important to consider the carbon footprint of distribution organisations and their customers. In the measurement of sustainability, when the costs of some activities are not directly borne by an organisation, they are still accounted for in their ESG scoring. There are also the considerations of remaining within the legal boundaries, competition rules and making sure to not open up cartel accusations. Still, Escribe offered that it is nonetheless important to address this issue, amongst many others, moving forward.
The first day ended with a plenary session where AutoForum participated in the on stage address from Escribe, and we had the chance to pose a few questions directly to him. Day two and three were really focussed on one on one meetings between suppliers and distributors within the group and ended with a gala dinner in an old train station. In the awards ceremony Motus won supplier of the year from the African region, presented to Megan Naidoo by Nexus local VP for Sales & Business DevelopmentMartin Hendriksen .
It was also interesting to attend presentations from Sparker and Mobilion – Nexus own incubator and funding vehicles aimed at growing new and specifically technology-focussed businesses within the group. This will be an area to keep an eye on in terms of Escribe’s strategy for Nexus in the coming years.
As I bowed out of formal sessions I felt that the whole format of the event felt considerably different from most conference interactions I have experienced, and it kept the attendees interested and engaged in a space filled with refreshments, easy access to key representatives and a really effective organisation team. Here’s to the Nexus team for pulling off a really interesting event, we will keep you updated with their news in the coming months.
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