[Company Overview] LKQ Europe
Tracing the Journey of an Automotive Giant
As with any great corporation, the story of LKQ Europe is a testament to strategic decisions, timely expansions, and adaptability to market demands. Let's take a step back in time and retrace the steps of LKQ Europe, from its humble beginnings to its position as an industry juggernaut.
The Early Days: Foundations in the U.S.
LKQ Europe has a rich and extensive history, marked by growth, innovation, and resilience. As a market leader in the distribution of vehicle parts, tools, and equipment for cars, trucks, and commercial vehicles, the company has expanded its reach and influence throughout the years. Initially, LKQ Corporation, the parent company, was established in the United States. Recognizing the potential and demand in the European market, LKQ Corporation soon embarked on its journey across the Atlantic.LKQ has operations in North America, Europe and Taiwan.
Diving into the European Market
In its quest to dominate the European aftermarket parts industry, LKQ made a series of strategic acquisitions, mergers, and partnerships. These include the acquisitions of Euro Car Parts in the UK, Rhiag in Italy, and Stahlgruber in Germany. Each of these entities brought with them unique strengths and market positions, enabling LKQ Europe to have a comprehensive footprint across various European countries.
The group encompasses entities such as Euro Car Parts, Fource, RHIAG Group, Elit, Auto Kelly, and STAHLGRUBER Group, complemented by the recycling expert, Atracco. Additionally, LKQ has a minority stake in the Mekonomen Group.
In 2007, LKQ acquired Auto Distribution International (ADI), one of Poland's leading automotive spare parts distributors, through the ELIT brand, a part of Rhiag Italy.
LKQ Europe expects ongoing dynamic growth in the Central Eastern European region. Demographic developments, fast-changing consumer habits, as well as future technology adoption rates have created a need for agile and adaptable business structures. With Poland being one of the most important markets in the region, LKQ Europe is responding to these trends by increasing its footprint not only with the new center today, but also with a logistics network hub in the near future.
“With our LKQ Innovation and Service Center, LKQ Europe installs a digital hub in one of its key growth markets to drive customer-centric digital solutions throughout Europe. By developing and testing advanced digital offerings for customers across Europe, the new facility in Poland will be a catalyst for our innovation and digitalization strategy. In addition to that, we will increase efficiency in our business and realize significant cost savings by digitizing, streamlining and standardization internal and administrative processes in one European center with a high level of quality, thus accelerating LKQ Europe’s digital transformation for the Aftermarket of the future,“ says Arnd Franz, CEO of LKQ Europe.
Since 2011, LKQ Europe has expanded its portfolio by acquiring over 80 distinct companies spanning more than 20 European nations, each boasting unique operating systems, product ranges, target demographics, and corporate cultures. To seamlessly merge these diverse acquisitions, the "1 LKQ Europe Program" was launched in 2019. This initiative aims to unify the operations into a single European entity, fostering an efficient international framework that capitalizes on the organization's vast scale.
Acquisition of Euro Car Parts, UK
One of the first major milestones for LKQ Europe was the 2011 acquisition of Euro Car Parts in the UK. As the leading distributor of car parts in the British Isles, Euro Car Parts offered LKQ a significant market share and a robust distribution network.
Euro Car Parts was founded in 1978 and rapidly expanded to become the market leader in the UK.
The company runs an extensive network of more than 300 branches, complemented by distribution hubs and a next day delivery capability.
Prominent leaders from Euro Car Parts have assumed expanded responsibilities within LKQ Europe to steer European-wide strategies.
Expansion to Easter and Southern Europe with Rhiag, Italy
LKQ Europe's growth strategy focused on key markets, and Italy was next on the list. The acquisition of Rhiag, a well-established name in the distribution of aftermarket parts in Italy, further strengthened LKQ Europe's foothold in Eastern and Southern Europe, Rhiag being the owner of Elit, Auto Kelly, Lang and Simimpex.
In 2019, LKQ Corporation purchased a significant 39% minority share in Rhiag Group.
By January 2022, LKQ Corporation secured the outstanding 61% share in Rhiag Group, achieving complete ownership of the company.
The full acquisition of Rhiag was important not just for the Italian market but for Eastern European markets too; the ELIT Czech and Auto Kelly Aftermarket Distribution Companies are present in all the region with branches.
Stahlgruber, Germany
Germany, with its robust automobile industry, was a market LKQ couldn't ignore. By acquiring Stahlgruber, LKQ Europe penetrated the German market, further solidifying its pan-European presence.
Stahlgruber stands as a prominent wholesale distributor of automotive parts and accessories in Germany and Eastern Europe.
LKQ Corporation took over Stahlgruber Group in 2018 with an investment of approximately $1.8 billion.
This acquisition considerably broadened LKQ's presence in Germany, the most substantial European market for automotive spare parts.
While Stahlgruber is now a fully owned division of LKQ Europe, it continues to uphold its distinct brand and operates autonomously.
With Stahlgruber under its umbrella, LKQ benefits from a vast distribution network, encompassing over 200 storage and sales sites spanning Germany, Czech Republic, Austria, Slovenia, and Croatia.
Fource, North-Western Europe
In 2018, LKQ acquired Fource, a European automotive spare parts e-commerce platform, which enhanced LKQ's digital capabilities, connected over 150 suppliers with 10,000 garages, and served major markets, with sales estimated at over €100 million at the time of acquisition.
“In 2013, LKQ Corporation acquired the shares of Fource, then Sator Holding. This was followed by the acquisitions of various wholesale companies in the Netherlands, such as AOC, APS, Heijl, Heuts, PrimaParts, Slager, Rijsbergen and Veam, which are now known as Fource Automotive. Together with Atracco Group, Auto Kelly, Elit, Euro Car Parts, Láng, Rhiag Group, Simimpex and Stahlgruber, we are the largest automotive aftersales family in Europe.” (source)
In 2014, Fource Automotive comes to life as a merger between Van Heck, Harrems, Havam and Kühne (source)
In 2018, LKQ took over Fource, Europe's notable e-commerce platform for automotive spare parts.
This acquisition equipped LKQ with advanced digital tools and an online sales channel, enriching its traditional distribution network.
Fource seamlessly links a vast network of more than 150 suppliers to over 10,000 automotive workshops across Europe for online parts procurement.
The primary regions Fource caters to encompass the UK, Germany, Netherlands, Belgium, Sweden, and Poland.
At the point of its acquisition by LKQ, Fource's sales were projected to surpass €100 million.
Atracco, Italy
Established in 1975 and headquartered in Turin, Italy, Atracco is an Italian firm specializing in the provision of aftermarket automotive parts and accessories.
- In 2015, reports surfaced indicating LKQ Europe's acquisition of a predominant share in Atracco, though the exact amount remained undisclosed.
Láng, Hungary
Established in 1990 in Budapest, Lang Kft emerged shortly after Hungary transitioned from communism. Its founders envisioned a firm dedicated to supplying quality automotive parts in Hungary's budding market economy. With a modest beginning of just five staff members, Lang Kft expanded its reach throughout Hungary during the 1990s. By the turn of the millennium, Lang Kft boasted a presence in 15 locales nationwide, positioning itself as a top distributor.
In 2007, Rhiag, an Italian enterprise, secured a majority share in Lang Kft, marking its foray into Eastern Europe. Under Rhiag's leadership, Lang Kft further augmented its distribution span in Hungary.
Presently, Lang Kft manages over 50 storage facilities and offices nationwide, with a workforce of approximately 500 individuals. The company supplies parts for both personal and commercial vehicles, catering to mechanics, retailers, and bulk buyers.
Trusted brands like Mahle, Hella, Valeo, Osram, and Midas are represented by Lang Kft in Hungary.
Maintaining its stature, Lang Kft ranks among Hungary's top three parts distributors, generating yearly revenues exceeding €100 million.
Strategic Partnerships and Investments
Image credits: Aftermarketnews.com
Mekonomen, Sweden
LKQ Europe's strategic vision led to a minority investment in Mekonomen, a publicly traded company on the Nasdaq Stockholm. This move not only established LKQ's presence in the Swedish and wider Nordic aftermarket parts market but also strengthened its European supply chain.
Mekonomen Group, headquartered in Sweden, is a foremost provider of car parts and workshop services in the Nordic area.
In 2018, LKQ Corporation invested approximately $190 million to secure a 20% stake in Mekonomen.
While Mekonomen is an autonomously traded entity on the Nasdaq Stockholm, LKQ's investment makes them its principal shareholder.
This strategic investment not only grants LKQ access to the Swedish and broader Nordic car parts market via Mekonomen's distribution but also augments LKQ's European sourcing capabilities.
Despite the investment, Mekonomen retains its operational independence, though the two firms engage in collaborative efforts on certain procurement and supply chain projects.
Representing its influential position, LKQ holds a seat on Mekonomen's board to offer insights and direction as a significant stakeholder.
Joint Venture with Elitcar, Bulgaria
2020 marked a significant year for LKQ Europe as it entered into a joint venture with Elitcar in Bulgaria. This alliance combined the strengths of both companies, allowing LKQ to expand its market presence in Eastern Europe with a local partner known for its domestic expertise.The rumors are now about LKQ exit from this joint venture at the end of 2023.
Acquisition of Auto Distribution, Poland
LKQ solidified its presence in Poland by orchestrating Rhiag's acquisition of AD Polska distributor, subsequently rebranding it as Elit. Additionally, through the Mekonomen Group, LKQ indirectly oversees Inter-Team.
Final Thoughts
LKQ Europe has grown into an automotive giant through strategic acquisitions and partnerships across Europe over the past decade. Major milestones include acquiring Euro Car Parts, Rhiag, Stahlgruber and investing in Mekonomen. With over 80 acquisitions across 20+ European countries, LKQ now has an extensive distribution network and market leadership across UK, Italy, Germany, Eastern Europe and the Nordics.
LKQ Europe's ascent in the automotive aftermarket landscape showcases not just strategic acquisitions, but a visionary approach rooted in understanding and adapting to market dynamics. Through initiatives like the "1 LKQ Europe Program" and the LKQ Innovation and Service Center in Poland, the company emphasizes its commitment to integration and digital transformation.
From humble beginnings in the US, LKQ now generates billions in revenue in Europe and employs thousands across the continent, becoming an automotive industry leader. LKQ Europe's story underscores the importance of vision, adaptability and calculated growth in building a successful pan-European business in a competitive industry.
As a major force in vehicle parts distribution, LKQ seems well-poised for continued innovation and growth in Europe in the coming years.
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In Bulgaria they have relied for development on collaboration with a local company. You know the market, we come with logistical support and success is guaranteed!
Only that the Bulgarian market is one that demands cheap first! And this requirement was not met because LKQ was selling the product to the Bulgarian company.
I believe that LKQ will enter a stage of stabilization and balancing of the firms they bought. At the moment there is a bit of chaos but with a change of local management and appropriate actions the upward trend will be resumed.
They took a huge gulp with Stahlgruber, since then they chew soft leaving expansion to Eastern Europe.
are the rumors about lkq leaving bulgaria true? too bad!!