“Macadam wants to be the best, every day”
The acquisition of key parts of SGS, which closed on July 1st, will take vehicle inspections specialist Macadam to the next level, both geographically (22 countries) and in terms of turnover (€50 million). It’s all part of a long-running, well-considered strategy, with clear goals for the future. To be the biggest? That's one thing Bertrand Donck (pictured), the company’s CEO, doesn’t want to be pinned down on: “If you’re number one, it’s always for a limited time. We would rather be the best, every day.”
Founded in 1993 in Belgium, Macadam specializes in vehicle inspection services for lease companies and other major fleet operators. In recent years, the company has focused on digitization of vehicle data, to expedite repair and resale of the assets.
But Macadam also offers a second suite of services, which is about specifically about knowledge. Via EuroFleet Consult, the company provides training and coaching in the areas of vehicle fleet financing, management, and taxation.
The SGS acquisition is equally important for both service pillars. Not only does it broaden Macadam’s inspection capacity, it also expands its expertise in terms of auditing, training, and coaching. So the acquisition is an extremely good fit. And that is no accident, says Mr Donck.
“Back in 2016, we developed a five-year strategy to spin off our systems-based activities from people-based ones. The idea was to find third-party collaborators for those systems-based activities. For every year since, we’ve invested 10% of our revenue in the development of our systems. We also made it clear that we were looking for a larger European footprint, outside of our own key markets (the Benelux, France, Italy, Spain and Portugal, with satellite activity in the Baltics and Switzerland, Ed.)”
Specifically, what does the acquisition of key parts of SGS AUTOMOTIVE add to your activities?
“It adds volume, markets and people. In terms of volume, we’ll have an annual turnover of more than €50 million. We’re now present in 22 markets across Europe, including in all the major ones, plus Turkey. And we’re now a company of 700 professionals. But it’s not just about quantity. The acquisition also delivers us SGS’s profound experience in Retail Network & Dealer Audit, which is something we did not have.”
“In short, the acquisition will not only help us deliver more and better inspections, but also more and better inspection systems, inspection professionals, and audits, trainings and coachings centred on vehicle inspections.”
Acquisitions are hard work. What’s your plan to get it all done?
“We have a plan to bring together the best of both worlds. It’s called Macadam.ONE, with three very simple points: one team, one system, and one focus – the customer.”
“In the first six months after the clearance and final closure of the acquisition, we will focus on integrating our people, our operations and our clients. By 2024, our aim is to have all our activities and tools on one system; to perform one million vehicle scans per annum; and to be the best, every day again.”
Considering recent market fluctuations, and your reliance on human capital, isn’t it logical to seek solutions in automation?
“Since 2016, we have invested considerably in autonomous vehicle inspections, working with the best experts in this field throughout Europe. What we’ve learned, is that it’s hard to approximate the quality and reliability of a human inspection. We pride ourselves on delivering results with an accuracy of over 99%. Machines are still quite far from that level. Perhaps for certain types of inspection, it’s enough to drive a car through one of those automated inspection gates, but not for all.”
“We are, by the way, developing our own AI inspection tool. But it will be used as a support, not as a standalone solution. Nevertheless, it will make inspections easier, also by allowing staff that has not received specific training to perform the inspections.”
Looking beyond your own acquisition, what are some of the major changes in the market that you see impacting your business?
“There are three major changes. One is the agency model. As you know, this will result in the financial burden of the vehicle inspection shifting from the dealer towards the OEM. There will be a real need for all agents to be evaluated using the same criteria. That’s a process that will require a lot of change management and oversight. It will require a higher level of customer intimacy. And that’s where the expertise of SGS as service excellence provider will come in very handy.”
“The second major evolution is the increasing size of fleets, which is the result of the rising success of private lease formulas, among other things. When your fleet size balloons from 100 to 1,000 vehicles, you need a totally different back office, not just a bigger one. We can offer the knowledge, the processes and the tools – also and especially to manage more flexible fleets, fleets of young used cars, fleet compounds.”
“Thirdly, electrification. The battery state of health is crucial. You will need moments when you evaluate that state of health, not just when an EV is resold, but also when it’s handed over from one user to the next, for example within the same fleet. That will require new, more flexible inspection protocols.”
Sounds like busy times ahead. Good luck!