AUTO GH. Own way.

The Poles, like companies from other Eastern European countries, find those niches in which it is really difficult to compete with them. For example, Piotr Hotala, co-owner of AUTO GH company, eventually came to the decision to offer the consumer a unique product for today's market conditions - a “shock absorber + coil spring assembly” kit - installed and forgotten. With an impressive list of benefits!



- The history of the creation and development of the company allows us to assess the degree of immersion of the owners in the nuances of the business and the level of competence in technical issues. Piotr, tell us the story of your company.

- My father got into the automotive market in 1998, bought half of the business of a small Polish company selling parts for Wartburg cars. I was then 10 years old. A year later the company began to sell spare parts for a fairly well-known German brand today, we started with shock absorbers. At the age of 12, in 2000, I was selling various products on the Internet, and my father, seeing this, suggested that I sell shock absorbers online, suggesting that this was the future.

In the wave of notable success, when I began to sell online not only shock absorbers, my father bought the other half of the company and renamed it AUTO GH. Coincidentally, the abbreviation GH "coincided" with the German word Gro?handel, which means "wholesale", "wholesaler". When the Germans told us about this, it was a pleasant surprise for us. Actually, our specialization soon became just that. And after 20 years our sales have reached significant levels exactly in the German market, and it has become a key one for us.

In 2002-2003 we thought about our own brand and started looking for suitable Chinese factories. It turned out to be quite difficult, we did it without trips to factories and went through all the circles of hell along the way, until I met a person competent in these matters. I am still friends with him. But more about that later …



In 2004 we created the GH brand, bought 2 containers of springs in Argentina and, since by that time we were the best seller of this group of goods (shock absorbers and springs) on the Polish Internet, we thought that we could sell all these many thousands of springs online. Of course, we made a mistake, and thus we had to become a wholesaler. On the backdrop of wholesale springs, we returned to the task of finding shock absorbers in China and I flew there for the first time.

While selling springs to Africa, I met a man who worked in a plant in India that made shock absorbers of a very famous brand. We traveled together many times in China, visited factories, I saw every process and learned everything about shock absorbers and their production. Today my friend has an auto parts wholesale business, and before that he had a shock absorber restoration business. And he shares his invaluable experience with me. And we continue to travel with him to factories in China together until now.

In 2012-2013 we had an unusual personnel crisis - we were the victims of unscrupulous employees who were able to inflict heavy losses on us. In 2013 my father said that he did not have the strength to deal with this problem and gave the business to us, his children - me and my brother and sister. By 2017 we restored the company's potential. Today my sister is my right hand. The father, who already has his own other businesses, comes to us with interest to observe and help with advice.

Until 2017 we had only shock absorbers and springs. In 2017 we began to increase the range of products - to introduce new product lines. We started with parts of the brake system - brake discs, brake pads, brake calipers, ABS sensors. Today, for example, spare parts for the brake system - 10% in the turnover of the company, parts in the electronic component - 2-3%.

We closed online sales back in 2016 - it became uninteresting, including to some extent it competed with the wholesale direction and distracted attention.

In 2018, not far from Lublin, where we are now, we purchased a new warehouse with an area of 5000 sq.m. and equipped with a modern warehouse management system WMS. Here is also the central office of the company. In the same year we dramatically increased our activity in wholesale, including abroad.









In 2020 the company launched a new product line in the form of shock absorber strut assembly with suspension spring and all other parts that make up the assembly. We ordered specialized equipment for the assembly of these units, which the manufacturer upgraded according to our requirements. It implements our know-how to prevent errors and waste, as well as for convenience and speed of work.



One production line can produce 20,000 pieces of such kits per month. We refer to this product as a "Strut Assembly Kit". In English - "complete strut assemblies", and in German there is even a separate term for this - "Federbein". For convenience we call it short - sets.

In 2021 the GH brand product range of all types included almost 9,000 items.

The second production line for the complete assembly of struts was put into operation in 2022, and now the potential production capacity of the enterprise reaches 40,000 pieces per month. This product has become key for us.

- How many percent of the money in the company's turnover are sold complete strut assemblies?

- In 2022 - 30%, in 2023 we plan to reach the figure of 60-70%.

- Is this product exactly what distinguishes you from other companies?

- In Europe no one takes it seriously anymore. Two companies, a German and a Dutch one, tried the same thing, one of them had the same product, but at much higher prices.

- How and for how long did you prepare to launch the production of kits?

- We examined 500-600 original samples before starting the production of kits. Of course, most of them were from dismantled cars. Yes, the search and analysis process is not fast.

For the production of a kit, it is easy to buy a shock absorber, a spring, dust cover and a bump stop, a bearing. But it is difficult and often very expensive to buy other parts of this assembly - the plate and other parts, and some of them do wear out and need to be replaced regularly.

We have learned to design and order them at factories both in China and in other countries, incl. in Poland. It ends up costing us a reasonable amount of money. But sometimes, when we either haven’t designed yet, or didn’t have time to produce and deliver, or it’s not profitable to exclusively order small batches at production facilities, we can buy some components on the local market, sometimes at higher prices, but it’s also profitable for us.

50% of the sets we release have something special that becomes a problem for others. But we have learned to solve these problems.

The entire assembly process and all quality control tests are done in Poland, which is why we write "Made in Poland" or "Made in European Union", even if the individual components are not made by us.

- How can Europeans, buying in China, guarantee quality to their customers? What does your experience say?

- Over the years, the Chinese noticeably improve the quality - the number of engineers increases, experience is accumulated. It is important to reach the right agreements with the Chinese, but still at the same time always and constantly control the quality, even at most good factories. Better yet - sign the right contract, which describes all the test methods, as well as significant penalties for poor quality goods. The Chinese will sign it, but, having assessed the risks, they will certainly increase the price.

- What countries do you sell the most to?

- Most of the products of all product groups we sell in Germany - 80% of the total volume of all types of goods.

At the same time, we make more than 95% of foreign sales of sets also to Germany. 5% - to France. The plans are to sell to Belgium, Great Britain. We are working on potential sales with the US. Monitored the situation in Africa.





- Does the market in Germany require kits, or do you “impose” this product?

- Initially, the market of this or that country does not require this product, moreover, it does not suggest that it will be needed. But when prices in Germany rose to the level of 160 euros for the work of replacing two shock absorbers (to buy them - another 80 euros per pair on average) - our product for customers in this country became a solution that ultimately saves both money and time. Of course, you need to understand that at the same time absolutely all other details become new.

We have a large system customer who sells our strut assemblies and they replace them for free in their network of workshops because it's easy and fast - the replacement time is reduced to 15 minutes instead of one hour for the replacement of one shock absorber recommended by the program Autodata.

In addition to being fast, it allows you to have a transparent warranty policy. If something is wrong after installation, for example, the car does not drive as comfortably as expected, the assembly is to blame and the assembly supplier deals with this, not the service station. It is impossible to blame a part that has not been replaced (for example, a spring), because absolutely all parts have been replaced.

Finishing the answer to this question, I will say that in Germany, after two years of our product being on their market, the demand for our product “from below” is already beginning to form. But at home, in Poland, it is much more difficult for us to sell kits, because the price of labor of a Polish car service employee is noticeably lower.





- Do you primarily present yourself through this product?

- Yes, because it is our own development.

We also emphasize that you can buy all their components separately from us, which is often impossible to find from other, even very famous brands in the world.

There is also a logistical advantage for us and for distributors: 100 sets - 1 pallet. But the price of one pallet with sets is like 10 pallets of just shock absorbers.

- What percentage of kits do you sell for the front axle and how many for the rear axle?

- There are few car models, on the rear axle of which the design is just that. But for all cars where the rear can be replaced as a kit, we have an offer in stock.



- You have shock absorbers of the PRO series ...

- Yes, shock absorbers of the GH PRO series are distinguished by their internal filling - the valve and other parts - of the highest, original quality, so the price is 20% more expensive. If the client requires the best quality - we can offer. We have only 150 positions so far.

As a rule, on older cars, their owners prefer to put something cheaper than the "original". We already have 1200 positions.

- Do you use PRO series shocks in kits?

- Yes, sure.

- Are the kits sold in Ukraine and in countries that are generally similar in terms of economic situation and the level and type of development of a car service with Ukraine?

- In Ukraine and in the countries you asked about, they are not sold. Parts are sold separately. Basically shock absorbers. And the quality is guaranteed by the fact that the same spare parts are used in kits that are successfully sold in Germany as top products.

We emphasize in every way that since we make sets that are successfully sold in economically developed countries, we always use high-quality shock absorbers, springs and other components.



Briefly about our shock absorbers:

• We have a good price on shock absorbers.
• We have very good quality shock absorbers.
• We have the best quality/price ratio for shock absorbers.
• We have good availability of shock absorbers.
• We have shock absorbers of the PRO series.
• We have beautiful high-quality packaging, which is also important to many.



Shock absorbers as a spare part and as a constituent product in our assortment occupy 60-70%. This is our main specialization and remains so. The rest of the products are a harmonious addition, and we plan to expand these groups without much advertising, because the expansion of these groups requires large investments. The number of positions in them is approximately 700.



- How do you expand the range?

- I decide what new things we add to the range, and the program gives an analysis of how much of it needs to be ordered from factories. I personally visited 99% of the factories. If I see that a factory produces quality parts, we can order the entire range from that factory. Then we do the analysis, including checking the quality. And what is really of high quality and sells well at our regular prices - we buy again.



- How many people work in the company?

- 25 people together with a filial in Germany, where we have three own warehouses.



- In how many countries do you have distributors?

- In addition to the home market in Poland, there are distributors in Ukraine, Lithuania, we started selling in France. And through our largest distributors in Germany the products go, in fact, to all European countries.

The markets of Ukraine, Poland and Germany differ in the structure of the vehicle fleet. And by working with them, we are able to maintain a good availability of spare parts for different generations of vehicles and thus have a wide effective range. Example: thanks to Ukraine, we have a good demand for spare parts for VW Golf 4 and 5, thanks to Poland - for Golf 5 and 6, thanks to Germany - for Golf 6 and 7.

Information for Ukrainian consumers - in Ukraine our distributors are Syndicar (Pitstop) and AVDtrade.

We don't want to suddenly add more distributors because we know we won't be able to handle requests from new countries and don't want to see gaps in parts stock in our warehouse. Everything is gradual. Grow according to plan).

Interviewed by Oleksandr Kelm
information agency autoExpert-Consulting