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SHERPA Interview Marko Reichmann Christian Leis

SHERPA Interview

“We will continue to listen carefully to our customers”

Managing Director Marko Reichmann and Sales Manager Christian Leis understand the key factors in the company’s success – close communication with car repair workshops and inspection organisations, the innovative strength of SHERPA Autodiagnostik, and the expertise of the STENHOJ Group. Now they plan to expand SHERPA’s service network and enter yet more new markets.

SHERPA has been growing at a remarkable rate for quite some time. How do you intend to maintain this pace over the coming years?

Marko Reichmann During the past few years, we have consistently expanded our product range. The addition of exhaust testing technology means we will be able to equip the complete test lane – from the suspension tester to the brake tester, from the lifting platform to head light tester and, as I just mentioned, exhaust testing. Over the next few years, this broad product portfolio will enable us to expand our international business both as an independent company and a partner of inspection organisations.

In addition, we are working on further enhancements to our test stands. Digitisation is opening up new horizons. For example, it allows operators to record start and stop times on a test stand and analyse the load on the gearbox in the system in more detail. It enables them to optimise maintenance intervals and prevent system standstills.

However, we also understand the importance of listening to and accurately understanding the needs of the market, inspection organisations, and workshops. They are our customers and we have to develop the right products for them. SHERPA is in a great position to respond quickly to new challenges and offer the products and services our customers need.

When will SHERPA’s exhaust gas measurement technology be ready for the market?

Reichmann We will launch our exhaust gas testing equipment by mid-2019. We have taken technologies developed by STENHOJ Sweden – our Swedish sister company – and supplemented them with our own innovations and ideas. If necessary, these devices can also be modified to meet additional customer specifications. Particle counters will become mandatory from 2021 – we want to supply suitable testing and inspection equipment and participate in this market from the outset. Measurement of nitrogen oxides (NOx) is not mandated by law for general inspections. However, we are preparing to offer market-ready products in good time should this change.

What proportion of your business is accounted for by the international market – and how do you plan to win new customers outside of Germany?

Reichmann At the moment, current legal changes in Germany mean that about 30 percent of our orders come from foreign countries, but we want to increase this share to 70 percent. That’s our five-year goal. We see enormous potential in many countries.

Christian Leis In the process, we will also expand into markets where neither SHERPA nor AUTOPSTENHOJ have ever operated before. There are still large white areas on the map where we have no foreign representatives, for example in North and South America. Now, we want to crack these markets. At Automechanika, we identified some enormous opportunities, especially in South America.
A growing number of countries and regions want to introduce centralised safety inspection for motor vehicles and are looking to build on the example of Germany and the experience of our large inspection organisations. Some countries, like Brazil or India, are still in the early stages of planning but others have already made a lot of progress. These countries are now investing in the construction of test lanes.

We can drive our international expansion in partnership with the major inspection organisations we have worked with for many years. At the same time, we want to enter new foreign markets with other sales and service partners in order to gain additional car repair workshops as customers.

Are you well-positioned to take on the international competition?

Leis We already know many of our international competitors from German or European markets. But we also face new competitors from countries like China and Russia. Or Spanish suppliers that are particularly strong in Latin America. It is vital that we understand local needs precisely and consistently focus our product portfolio on customers’ wishes. We meet the highest technical specifications and have no need to fear low-cost providers. After all, the countries seeking to introduce safety inspections are basing them on the quality standards we know from Germany and Europe. Inspection organisations have had positive experiences working with our products in the German market. As a result, a growing number of them are investing in SHERPA testing and inspection technologies for their operations in other countries.

What distinguishes SHERPA from the competition?

Leis We manufacture very durable products. However, above all, we are also great innovators. Over recent years, SHERPA has filed numerous patents for innovations which make daily business much easier for our customers – including the automatic all-wheel detection we invented and the Easy Drive Out System (EDOS). These are also very popular in international markets. Furthermore, we have significantly expanded and completed our product range in a short time.

How do you benefit from your cooperation with the STENHOJ Group?

Reichmann It enhances our international reach and sales power because the STENHOJ Group’s companies are active around the world. For example, by dealing through our sister companies, inspection organisations can access our products in markets where we are not yet represented. In addition, we have the huge advantage that our supply chain is almost entirely within the Group – the MECO-SEP head light tester is a good example. This means we have even better control over quality. And having access to in-house expertise allows us to adapt and expand our product range much faster. We take great care to curate and develop this know-how which is complemented by the versatility and international backgrounds of our employees and executives. The Group is very well prepared and positioned.

Leis STENHOJ has been active in the market for more than 100 years and the Group has a wealth of experience. We share this with our sister companies and everyone benefits. It allows us to access proven technologies and develop and adapt them as required. It allows us to bring innovations to market more quickly and respond to our customers’ changing or specific requirements more effectively than many of our competitors.

Reichmann At the same time, however, we retain complete freedom to develop and refine our own products. This is important because our inspection and measurement technologies have to meet very high technical standards. These are our strengths and we must work on them consistently.

How important are the major inspection organisations for SHERPA's business?

Leis Inspection organisations are key players in the market so they are not just very important as customers but also as multipliers. After all, most car repair workshops around the world have to work with inspection organisations. Unless they already have their own inspection equipment, they send the vehicles they repair to these organisations for inspection. They become familiar with the SHERPA brand and appreciate our high quality standards. So they remember us when it is time to invest in a test stand of their own.

Reichmann Sales to the major inspection organisations account for significantly less than ten percent of our total revenues in Germany. This is not really surprising because the number of facilities run by inspection organisations is much smaller than the number of car repair workshops. However, in some markets regulations require large inspection organisations to operate the test stations and they need partners to supply the equipment. This entry point is another area that will become a much greater focus of the entire Group’s activities. We recently established the Periodical Technical Inspection (PTI) department led by Chris Manby to help us achieve this goal.

Where do you see further growth potential?

Leis In addition to inspection organisations and workshops, we see significant potential among vehicle manufacturers. We are working hard to win new customers in partnership with our sister companies which already have a strong presence here as suppliers of lifts.

How fast can SHERPA adapt its production to growing international demand?

Reichmann We work with a network of suppliers who manufacture the systems we develop. To react even more flexibly to order spikes, we are planning to expand our cooperation with a machine factory in Denmark that belongs to one of our sister companies in the STENHOJ Group. This will give us reliable access to production capacity and help us to avoid longer delivery times.

What role do SHERPA’s sales and service partners play in your growth strategy?

Reichmann We already have a strong sales and service network in Germany and Europe. Here, we will continue to rely on proven partners who receive regular training and the latest know-how for the sale and maintenance of our products.

Leis In addition, we started developing customer services for the German factory market in early 2018. This will provide even faster and more targeted services, especially for our major customers. These are state-of-the-art services with specially trained employees who understand every aspect of SHERPA equipment and can thus provide exceptionally competent support. We will increase our focus on these types of partnerships in other countries as well and build up a network of marketing and service partners who sell and maintain SHERPA products. This will enable us to ensure high standards for our customers worldwide.

How do you intend to preserve and develop the culture of innovation at SHERPA?

Reichmann The development of new, innovative products and technologies will continue to be at the heart of SHERPA’s success. We have reorganised our team with a development manager who is highly experienced in project management. In addition to knowing the exact needs of customers, this is the key to product innovation. We will continue to listen closely to our customer’s wishes, invite inspection organisations, workshops and vehicle manufacturers to discuss their ideas and needs with us, and then work on solutions with highly trained and motivated experts from our development team.

Where do you still see scope for product innovations at SHERPA?

Reichmann We have probably exhausted most of the potential in the field of mechanics. But, as digitisation continues, many more opportunities will arise. Our products will become more closely networked, they will collect and evaluate data to optimise the operation and servicing of our systems, e.g. through predictive maintenance, and to keep downtimes to a minimum.

Many applications that other companies are only now discovering have long been part of our portfolio. Remote maintenance is one example: we have been able to access our customers' systems when necessary for years. At Automechanika, our Business Process Support Team presented the application possibilities for virtual and augmented reality which we will use in future when planning new test lanes. This allows people to walk into real rooms and use virtual reality to see exactly how and where our products would fit. We also want to use this technology for training and service.

What are the biggest challenges you face over the coming months?

We will be working hard to increase our delivery capacity still further and become more flexible in terms of output. In the long term, it is important that we think ahead and focus when dealing with digitisation – we must always pay attention to what the market really wants. We must focus our resources on finding new technologies that offer better solutions for real problems rather than chasing trends or buzz words. That's why our products only implement innovations that really help our customers. In future, we want to communicate with the users of our systems from an even earlier stage of product development and invite them to work with us even more closely. Intensifying the exchange of ideas and technologies with our sister companies in the STENHOJ Group will increase our collective clout still further.

And where do you see SHERPA in five years?

Reichmann In five years, we will be the international benchmark for the development of inspection equipment. We will have opened up a number of new markets where SHERPA is not yet represented today. We will have found a new headquarters here in the region with space for a flagship test lane training facility, additional rooms for training our world-wide partners, and a fully-developed test environment with a new prototype workshop. And we will have doubled our sales compared to today.