CEO Aarne Simula’s review
24 February – 31 December 2022
For Wetteri 2022 was a year of major changes in the company’s long history. In May there was a change of ownership in the family company and in June, we announced our intention to go public. On 15 December, we rang the stock exchange trading bell in Oulu to mark the start of Wetteri’s stock exchange journey. At the same time, a new strong era of growth began.
The automotive industry is undergoing a massive transformation. Dealership models are evolving towards agency models, motoring is becoming electrified and environmental requirements are tightening. These changes give rise to new types of investment and skills needs. The trend is driving the fragmented automotive trade to focus on larger units and the number of actors in the industry is decreasing. This development is the key driver in Wetteri’s growth strategy.
Wetteri’s strength in the change is based on our comprehensive business model and a demonstrable track record of many years as a successful growth setter. We have Finland’s most extensive selection of high-quality sales and service brands, extensive expertise and long-term relationships of trust with actors in the industry. A multibrand car strategy in car sales and service, together with a heavy-duty fleet business are also important organic growth elements that generate steady cash flow and balance business risks. We have already long been leaders in utilising digitalisation and data analytics. On these operative strengths we will build also our future success.
The year 2022 was challenging for the automotive industry. The poor availability of new vehicles due to a shortage of components in the early part of the year dragged first-time registrations to a historically low level. Even though the situation eased slightly towards the end of the year, there is still some way to go to reach a normal level.
At Wetteri, net sales in the passenger car business were down slightly due to the shortage of new cars. At the same time, the order book grew to record figures and at the end of the review period the order book for new cars stood at EUR 82.7 million. The increase in the share of e-cars and hybrid cars of total sales pushed up the average price of cars sold. Of the cars we sold, 60% were low emission. Service and spare parts services continued to grow steadily last year and a 5% growth was seen in spare parts sales compared to 2021.
For heavy-duty vehicles, invoicing remained at a good level during 2022. The order book for new trucks showed good development and was EUR 20.1 million at the end of the review period. Wetteri Power rose to market leader in its own region with a market share approaching 44.7% of trucks heavier than 10,000 kg. Coverage of truck service agreements was high at almost 83%. Wetteri Power’s advanced maintenance service utilising data analytics keeps trucks running as efficiently as possible and optimises servicing at the right time. This increases customer loyalty and generates steady cash flow for the company.
In March 2023, Wetteri already had more than 900 employees. Employment relationships have traditionally been long at Wetteri. This indicates that our people like working for us and are committed to their work. Besides commitment and trust, our values include boldness and good performance. We know that trust is earned by being trustworthy every day. Driven by our values, we intend to focus on long employment relationships, staff skills and wellbeing going forward. This is the main key to success and guarantees customer satisfaction.
The year 2023 looks more encouraging for the automotive industry. The record high order books are expected to be turn into invoicing as new cars are handed to their owners. The slowing and decrease of inflation and the end of interest rate hikes will likewise stimulate automotive trading. According to Finnish Information Centre of Automobile Sector statistics, the truck trade and used car trade have picked up clearly in the early part of 2023.
With decades of experience in the automotive industry, I look to the future in confidence: the temporary decrease in demand will rebound back.