Wetteri is the market leader in its sector in Northern Finland with a market share of 38%. The automotive market is currently highly fragmented with great potential for consolidation. Through company acquisitions, Wetteri aims to actively consolidate the industry into larger and more profitable units.
According to the company management, the strong trends in the sector accelerate Wetteri’s growth and improve the company’s profitability.
Trends and drivers of growth in Wetteri’s business environment
1. The operational model of the distribution network in the car business is evolving. Car manufacturers’ position in the distribution network is growing and the importance of separate importers is decreasing. The role of retailers is developing towards the so-called “agency model”. This model adopted by European car manufacturers is estimated to influence the relative profitability of car business in a positive manner.
2. Consumers’ buying behaviour is moving towards digital services and platforms. Wetteri has developed its digital services and online channels for car sales and intends to continue this development in the future. Wetteri has invested in the digitalisation of repair and maintenance services as well as contactless services and will continue to do so. The company will also continue to develop its direct mechanic service to boost efficiency.
3. The price development of traditional fuels and general environmental awareness increases the demand for both new and used cars with alternative power sources. This is estimated to increase the demand for new cars and keep the volume of orders steady. The sales structure of used cars is estimated to change so that the demand for vehicles using traditional power sources will fall and the demand for vehicles using modern power sources will increase.
4. The availability of raw materials and the global market development, especially the situation with China and Russia, are weakening the availability of components, which, in turn, holds up the delivery of new vehicles. On the other hand, the ageing of the car fleet in Finland means long-term demand for car repair and maintenance services.
The age of Finnish passenger cars is above the EU average, creating opportunities for Wetteri in both the retail and after markets. In the company’s view, the passenger car market will grow by about 25% in 2023 because of the vehicle deficit caused by COVID-19.