CHALLENGE AND OPPORTUNITY

Colombia 2018 | TRANSPORT | INTERVIEW

TBY talks to José Francisco Gili Planella, General Manager of Derco, on adding brands, building business lines, and growing market share.

José Francisco Gili Planella
BIOGRAPHY
José Francisco Gili Planella studied commercial engineering at the Universidad de Chile before beginning his career. After 12 years as Sports Marketing Manager at Nike Chile, he transitioned to Derco SA, taking on many positions within the company. During his 12 years at Derco, he completed five as Retail General Manager.

What are the achievements and challenges the company has faced since entering the market?

Derco arrived in Colombia almost eight years ago. Since then, the market has pushed us to improve our business and provide better customer service. Derco is a distributor and certainly has the talent to be a major player in the car market in Colombia. In 2017, we improved our returns in the Suzuki brand, and we intend to continue this trend. We also added the Citroën and DS brands to our portfolio. Citroën is a European brand, and our challenge is not only to increase the number of Citroën cars we sell here, but also to position the brand in Colombia. The Suzuki and Citroën brands are our key focus for the coming years. We are always looking for new brands to add to our distribution portfolio. Colombia has a population of almost 57 million; however, vehicle sales are only 240,000 cars per year, compared to 400,000 in the Chilean market. This means there is both a challenge and an opportunity to grow in the car industry in Colombia.

What is Derco's current market share in Colombia, and how do you manage to compete in such a competitive market?

We have a 3.7% market share in Colombia's automotive sector. We definitely want to increase that share. Nevertheless, there are still some areas, such as machinery and spare parts, where we can continue growing the business, and one way is to continue adding new brands to our portfolio. We are always looking to do that. For example, in Colombia's automotive industry, we only sell four brands—Suzuki, Great Wall, Citroën, and DS, but in Chile we have seven brands.

What is Derco's strategy to partner with high-end or luxury car brands?

Our distribution system works under an umbrella structure with retailers. What we do here and in our other markets of Chile, Bolivia, and Peru is to distribute and sell under the umbrella of Derco Center, which is our retail brand. This strategy has been working well for several years. The Derco Center brand is powerful and provides the right support to grow the various car brands we sell as well as their market shares. We have been using the Derco Center umbrella for 50 years in Chile, and we are using the same structure in Colombia.

Is Derco planning to explore new markets in the near future?

Right now, we are not. We are in Chile, Peru, Bolivia, and Colombia. We still have a lot to do in these countries, especially in our markets outside Chile. There is room for us to continue growing in these existing markets and we are always looking for new brands. We would not discount the idea of going into new markets in the future; however, right now we are focused on our existing four markets to continue positioning ourselves in them.

What are your expectations at Derco for 2018?

We are active in the car sales business, machinery, spare parts, and in our own retail business. Our first goal is to continue to consolidate those four core lines of business. This means establishing a solid base that allows us to continue growing those activities in the future. Our targets are more about efficiency and productivity. In retail, we want to increase our sales staff. In our car business, we want to achieve over 4% market share. We are uncertain about how the machinery sales segment is going to perform in 2018 because it depends on industry in the country. Currently, industrial growth is stagnant in the country; however, we are trying to get additional sales of machinery in different sectors, such as agriculture.