Company Report: Control Instruments Automotive
Supplying the S.A. automotive aftermarket A supplier to the South African automotive aftermarket, Control Instruments Automotive is buoyant about the market's potential, despite a recent slump in demand

Founded in 1948, Control Instruments Automotive, a subsidiary of Control Instruments Group Limited, manufactures and distributes an extensive range of quality, branded automotive components, including instrumentation and off-road products to OEM s and the automotive aftermarket throughout sub-saharan Africa.

The company owns a number of brands, each of which holds a unique position in the aftermarket. Well-known manufactured brands include Gabriel, Echlin, AutoExcel, MAG-Brakes, Autosave and Autocom.

The company is also the exclusive African distributor of a number of internationally distinguished brands, including Warn, VDO, Britax, GE, Shurlok, Touratech, Ring, Eurocable and Unipoint.

DEDICATED OPERATIONS
Based in City Deep in Johannesburg, the company employs over 200 people who are dedicated to its marketing, warehousing and distribution operations, as well as a further 250 people at the company's manufacturing facilities in Johannesburg and Cape Town.

Employee investment Control Instruments Automotive constantly invests in its employees. According to Marketing Director Grant Fraser: "Training is certainly a priority in our business."

The company runs a number of internal training programmes to benefit its employees, including Adult Basic Education and Training (ABET ), part of a government incentive for companies to help their adult workforce to complete their basic education."

THE EXPORT MARKET
To meet the demands of the growing export market in South Africa, Control Instruments Automotive recently set up an export division for the African market. "In the last decade or so, exports and automotive products in South Africa showed strong growth, so it is important that we provide the right portfolio of products," says Fraser.

The company also has a team of product managers based in Johannesburg who work directly under the marketing team, whose responsibility it is to source new products for the emerging markets and to release these products into the new channel.

CLIENT DEMANDS
"With changing demands in the market, it is imperative that we are able to meet the demands of our customers. We have to be able to deliver a quality product, particularly in the aftermarket, which also meets global emission standards," says Fraser.

MAINTAINING SUCCESS
Customer relationships are one of the keys to Control Instruments Automotive's success.
"The relationships we have with our customers are vital," explains Fraser. "Wherever possible, we pass on any benefits from our manufacturing process to our major distributors, and we are working hard to support the network."

Adaptability is not the only thing that has made Control Instruments Automotive a leading player in the sub-saharan automotive aftermarket.

"There are a number of things that create success," replies Fraser. "First of all, our people; we have our own IP (Intellectual Property) and a lot of the technology that we have is continually being developed by our own team."

"Secondly, from a distribution point of view, we carry premium brands which ensure quality and availability of product."

Most importantly, we offer customer-focused service. We work closely with our clients to make sure we know what their goals are, where they are financially and where they want to be in the future. The service we provide is personal, tailored to fit each customer. Our marketing initiatives are based on the requirements of our customers, and we drive various national campaigns to support the growth in sales." says Fraser.

MARKET POTENTIAL
Obviously the economic climate is presenting many challenges for business. "Technically, South Africa is in a recession," Fraser points out. "The trading environment is difficult and demands business units to rationalise. We are maintaining our core focus, and ensuring a platform for success when things improve," says Fraser.

In particular, the slump in the rand in late 2008 had a significant impact on the automotive industry, which incorporates manufacturing, distribution, servicing and maintenance of motor vehicles and components.

"The aftermarket shrunk by 10 to 15 percent," Fraser explains. "New vehicle sales were also down, which pulled OEM down by 40 percent, impacting on the entire supply chain of automotive parts."

However, Fraser is positive for the year ahead, despite forecasting difficult times for the next six to nine months. "South Africa's inflation and the interest cycle is close to peaking and we are anticipating a recovery in the third and fourth quarter of 2009." he says.

"The local parts market is buoyant, due to a combination of larger and younger vehicle populations. The aftermarket is worth about R3.6 billion, based on product ranges that we supply. The primary consideration in the current market is to access the impending market growth, ensuring that the operation and brands are positioned to capitalise on this. There is a lot of potential in that market," Fraser concludes.

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