"Invisible helper" explores China's automotive aftermarket

Christophe Aniel  (Left)
CEO
Mondial Assistance China
 
Ronan Gould (Right)
National Sales Manager - Automotive
Mondial Assistance China

Gasgoo.com: We learnt that Mondial Assistance is the first roadside assistance company that enters China (from 2003), so please give us a brief introduction to your automotive services in China.

Christophe Aniel: Mondial Assistance Group is a world leading company in terms of global assistance. There are two lines of business in the group: automotive services (roughly 40% of the global business) and travel insurance (around 48%). The automotive services basically include roadside assistance, customer relationship managements (CRM), extended warranties, and other services related to the automotive sector, to help enhance the services of the manufacturers and dealers.

Globally Mondial Group has almost 10,000 staff all over the world, and our revenue in 2007 is about 1.5 billion euros. We have 30 business units across the world, however when we do not have a business unit in a specific country, we can still leverage our extensive automotive and medical network there to deliver a prompt and professional service (400.000 globally worldwide), which means that we can service anybody, any time through our 24-hour call center and our network. This is the global concept of Mondial Group. It's a growing and profitable group, with a profit growth of 10% each year.

We entered China in 2003 and we start from almost scratch. At the time we bought a small Chinese company which has an assistance platform, and then we became a WFOE (Wholly Foreign Owned Enterprise) in 2004. We grew from about 10 people in 2003 to 165 people now. Our headquarters in China is in Beijing, and we have offices in Guangzhou, Shanghai and Chongqing; we now hope to expand to Shenzhen and Chengdu. Here we work with BMW, Mercedes-Benz, ChangAn Ford, Volvo, Jaguar, Nissan Infiniti, Honda Acura and etc; we've got 15 of the automotive brands in China as our clients.

We are growing well in China, our growth rate in China last year is about 90%. And about 95% of our staff is Chinese; some of them are growing to mid-range and senior managers, because we need the Chinese people to address the Chinese market.

We are 99% B2B (business-to-business), that's why the end consumers may not be fully aware of the Mondial systems, because when we work for a car manufacturer, we become BMW or Mercedes assistance.

Gasgoo.com: So you're the invisible helpers.

Christophe Aniel: Our purpose is to deliver our service to the OEMs. That's the full concept. In only very few cases we act B2C, when for example a manufacturer wants to propose roadside assistance outside the warranty, and then we can offer a co-branded renewal program with the manufacturer after the warranty expires.

We've worked mostly with the joint ventures auto companies set up in China. Now we are walking to Chinese-branded vehicle manufacturers who also want to grow their brand loyalty and improve their service to become more competitive. They will need our services as well--frankly speaking, it's not very expensive, yet it has great value. It's still in early stages to convince the Chinese manufacturers, but that's our strategy now.

Ronan Gould: We want to raise our service to the Chinese brands, because they certainly compromise a significant percentage of the overall sales, particularly as we know Chery is a very successful brand in China. We are very happy and proud to work with Chery in the future, because we believe that our service and added value will help increase its customer loyalty.

Challenges for roadside assistance provider in China

Gasgoo.com: What are the challenges you face when you start business with the Chinese vehicle manufacturers?

Christophe Aniel: The first challenge would be culture and education. And for the time being, we've met a lot of Chinese people looking into prices and purchasing power…these kinds of things only. We can feel that the Chinese customers are not likely to spend money easily. So we have to find the right balance between Chinese consumers who want to pay and the services we provide.

Ronan Gould: In addition，the concept of roadside assistance is new in China. While in Europe and other mature markets, roadside assistance has been recognized by all of the automotive brands. In China, it's only starting to become prevalent. What we have to do as an assistance provider is to demonstrate to each of the manufacturers the benefit of having a dedicated and branded roadside assistance program which adds value to their product and increases customer loyalty to their brand.

As Christophe said, there is a cost obstructer; we have to balance the cost versus the benefits. The demonstration takes time, and involves some relationship between cost and some of our core values. We have to convince the clients the service we provide is professional, but also it's valuable. That is what we can do，and we've made good progress with a lot of the joint ventures in China. As the competition in the market is increases each year and they are looking to improve their customer service; we believe passionately our services can help them to achieve that.

Customers see great value in roadside assistance service

Gasgoo.com: It seems that most of Mondial customers are premium brand car manufacture.

Christophe Aniel: We've worked with premium brands, but with volume brands as well. Yes, a large part of the business is with the premium brands, but we start to work with volume brands. Sometimes, we can differentiate the offer with different price, so we have low-end and high-end products depending on what the manufacturers want to bring to their customers. So we have to find the right balance and offer the tailor-made products with an appropriate price. So it is all about marketing differentiating the offer. We've got both premium and volume brands, now we want to explore the Chinese manufacturers. The market is booming and so is the competition in the automotive market.

And loyalty starts to be a problem. We've made some studies on roadside assistance. When you have a problem, you call Mondial Assistance; anywhere and anytime, we turn a very quick, transparent and real time service, perhaps on a main street or in the countryside. Then when people want to renew their car, they think the service is good, and that may influence their decision, so roadside assistance around the world is a key benefit.

Ronan Gould: I'd like to share some interesting statistics with you. We did follow and observe and consult with all of our customers after we provide assistance. Overall 93% of our customers said having a roadside assistance program is a factor in their decision whether to stay with the (car) brand or to change the (car) brand. That's very persuasive: 93% clearly demonstrates to the manufacturers that customers see a value in the service, and it's important. Because when they have a break-down, it is possible to turn a negative experience into a positive experience if your customers feel your service very good. This is the type of information we'd like to share with our clients. The customer's loyalty to the brand is directly related to the after sales performance of the manufacturer and the dealer.

Gasgoo.com: More and more Chinese local companies are trying to provide the roadside services; some of them get funds from the private equities or banks. What is Mondial's advantage compared with these small, local or separate automotive service providers?

Christophe Aniel: Instead of having a regional approach (a regional dealers or garage), we have a nation-wide service network across China. For example, we've got an extensive network of almost 1400 providers, which we control, manage and recruit; we just get rid of the bad ones and select new capable providers. We are constantly improving. Everything is centralized, we dispatch the providers, and we give the information back to the manufacture. We can cover people nationwide, and it's not going to depend on the regional capability or because somebody is nor available, or dealers are not there, or it's not the right time, or it's not open at night, or whatever.

There are many regional and local difference, things varies in the living and the service, but we strongly believe a worldwide company like Mondial with an extensive network in China, is able to deliver service to companies like the General Motors, or Chery, or the Japanese automakers. The fact is that we can leverage the manufacturers' network; we also have our network, so that we can deliver the services anywhere and the approach is consistent. The feedback from the manufactures often is "perfect".

Ronan Gould: The key part of our approach is quality; we are very strict about quality on the network. As Christophe said, we remove the bad ones; we ensure that when our service providers are going to visit their customer, they will have the best professional service. We work with the best dealer networks as well, we provide additional registry to the dealers service to provide the service. We believe that's the reason why Mondial is the NO.1 in this market-because of our knowledge of the local market; we have global presence with local experience; we provide a quality, 24 hour service.

Gasgoo.com: Your network in China is very impressive. How did you set up your distribution channels during the five years?

Christophe Aniel: That was the very efficient work from the network team Ronan mentioned, with about 15 people reporting to the network manager. We took five years to recruit the providers face-to-face, not on the phone, to have a proper interview, to assess their competence, to assess their means, to give them training and quality standard. For example, every year we send them the data and providing DVDs, showing how to repair all models. These 15 people who are based in Shanghai, Guangzhou and Chongqing; they keep contact with the providers and bring sufficient volume as well.

Last year, Mondial provides roadside assistance service covering in excess of 400,000 cars. That was achieved through four-years of hard work in the team, with a regional presence and some robust processes to ensure that we have a strong and stable network. It's the starting point.

Gasgoo.com: How profitable was your local business yet?

Christophe Aniel: We just release global results, we don't release local results. The group has grown by over 10% last year. As for China, our growth rate in China last year was 90%, and we have handled 400,000 cars. The operating result is improving, we are moving closer to profitability.

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