On the occasion of an evolution in the network of the Swedish manufacturer in France, after the agreement between Sofemat and Kleber Malecot for the takeover of 7 departments, Chantiers de France conducted a cross interview with Davy Guillemard, President of Volvo CE France SAS and Stéphane Malécot, Chairman of the Kleber Malecot group.
Davy Guillemard, what were the main criteria that guided you in this evolution to the network?
The performance and the story. Volvo CE and the Kleber Malecot Group have long been partners. In terms of operational performance and the implementation of Volvo CE's strategy, this dealer has always met our expectations, has always adhered to our projects and our strategic vision. It is this same state of mind that prevails today and that has enabled us to finalize this territorial expansion.
Stéphane Malécot, did you hesitate before accepting this offer?
When such an opportunity arises, it is obviously seized. As Davy Guillemard explained, we have been working with Volvo CE for a long time. For its construction activities, Kleber Malecot has grown with the brand, through the expansion of the range and of the work processes. Carrying the banner of the Swedish industrialist with success, we decided to take up this challenge. We were able to find common ground all the more easily as it was done in full agreement with the management of Sofemat. Here too, the fact that the leaders of the two structures know each other well facilitated the process.
In the current circumstances and in view of the change in size of your perimeter, there is a real risk taking. How do you see it?
Like any entrepreneur, we have weighed the pros and cons of such an operation. We also worked on an economic model for the new set. Our group is also active in the marketing of agricultural machinery, we are used to managing these files. So we had the manual. We are therefore in working order to finalize this file.
Davy Guillemard, isn't it risky to entrust such a territory to a single entity?
What matters to us is that the Kleber Malecot group has chosen a multi-activity distribution, with public works, agriculture and industry, but not multi-brand. This approach has, for us, an interest, insofar as it makes it possible to smooth the cyclical character of these various activities, in which, the variations, upward as well as down, can often be in double digits of a year. on the other. This is all the more important as the extension does not cover a small geographical area, but 7 departments in which performance was not at the level expected for a long time. We have therefore given ourselves the means to succeed and ensure that Kleber Malecot extends the performances recorded in its historic sector to this new territory.
Stéphane Malécot, how does his business model adapt to a rapidly changing distribution business?
Yesterday, today, like tomorrow, the role of the dealer is to provide service. It is service that drives us forward and allows us to increase our market share. This notion of service is in our genes, so much is it part of our corporate culture. It is true that our profession has evolved, that our structures have grown and that potential markets have widened. The transformation plan that Volvo CE has been offering us for 3 years means that we have gradually prepared ourselves. We went from being a dealer to being a distributor by adding different skills internally and structuring the business. Volvo CE has made us grow by asking us to prepare for new challenges.
Manufacturers are also challenged. Davy Guillemard, how do you see this relationship with the network evolving?
Our markets are changing. The profession of our dealers is changing just as much. We have real challenges, such as equipment connectivity, unplanned "0" failure, electromobility, automation, … The challenge is to be able to implement a common strategy. This can only be done on the basis of a healthy and transparent relationship with our distributors. There are, of course, the business results that are taken into account; but there is also the sharing of the common long-term strategic vision.
Stéphane Malécot, is the move upmarket in after-sales services a model the keystone of the distributor's economic model in 2020?
In terms of form, the service is radically different. Basically, the ability to provide a service to a customer remains the same over time and is only the logical consequence of a commercial relationship that binds us to each of our customers. We are judged on the quality of our service. If we don't meet the customer's expectations, they leave us. The expertise of our teams is therefore decisive. Training is also important. In practice, we favor service and maintenance contracts in order to capture the Spare Parts business and optimize the total cost of ownership for our customers. This can involve a more frequent renewal of our customers' machines, thus a new approach in the management of rework. The challenge is to preserve our margins, which are the guarantee of the sustainability of our companies, and to support the manufacturer. The distributor's panel has grown. Long ago, it was no longer about selling a piece of equipment and selling spare parts. There is a range of associated services, which are all sources of growth in our businesses.
Davy Guillemard, can you only validate this approach?
Indeed, I wouldn't be telling you otherwise! Indeed, we have moved from a basic vision of after-sales service to a more comprehensive approach within the framework of a service. The challenge is to move from a vision shared between manufacturer and distributors to a daily and efficient implementation, recognized by our customers. The path for change has been marked out, we are in the midst of a transformation in our organizations but also in our ecosystem.
Stéphane Malécot, is your company ready to market electrical equipment?
We will learn by walking. Everything has to be done. The first ECR 25 Electric mini excavators and L25 Electric articulated wheel loaders arrive. Fleet conversion is not going to happen overnight. It is taken for granted that there are fewer parts on an electric machine, so fewer interventions. On the other hand, there is a range of services to be put in place, particularly in terms of connectivity, on these ranges. Concretely, this means that we should find growth in these services.
Davy Guillemard, is the subsidiary prepared for the electric “revolution”?
Volvo CE aims to be a strong player in the field of electromobility. The first compact excavators and small articulated wheel loaders will be delivered in the coming weeks. Considering the living machine fleet, and even though there are several hundred machines that Volvo CE will deliver by the end of next year, the conversion will take time. Of course, the economy of an electric machine is not that of a traditional machine. This clearly demonstrates the value of working with strong distributors who are well established in their economic base. With them, we are part of the long term and we give them the opportunity to become powerful players in the rise of electromobility.
Stéphane Malécot, what do you think are the ratios of a distribution structure capable of ensuring its development and sustainability?
We must aim to cover fixed costs up to 80% by the margins generated on the service and trading of spare parts. However, it is certain that the needs for technical monitoring and maintenance of electrical equipment are different. It is up to us to invent new services to support the marketing of these ranges and thus generate new resources. With Volvo CE, we have the advantage of being a pioneer in the simultaneous marketing of two electric machines: the ECR 25 Electric mini excavator and the L25 Electric articulated wheel loader. We will therefore be able to create the market and test various economic models.
Davy Guillemard, does the geographical proximity provided by the network still make sense in 2020?
We have the advantage of a network of local distributors which allows us to better understand the "pulse" of the field, associated with the French presence of the manufacturer Volvo CE. We are in fact still present on the French market; both at the level of central support and logistics functions but also at the industrial level with our compact excavator manufacturing plant located in Belley in Ain.
The takeover is a continuation and in full agreement with the "Sofemat". There will therefore be no rupture for the teams, nor for the customers. Continuity of service is guaranteed. We must not forget that for a long time, Kleber Malecot has been operating in regions, further from its historical base, far from its bases with the same quality of service and the same commercial performance.
Interview by Jean-Noël Onfield