More than 2,000 km from the western coast of Europe in the North Atlantic with Iceland and Greenland as the nearest neighbors lies Iceland. The country, which is best known for its spectacular landscape of volcanoes, geysers, hot springs, lava fields and large glaciers, is also home to spare parts wholesaler AB Varahlutir, with its total of 5 branches, which we recently took a trip to Iceland to visit.
AB Varahlutir - in the following ABV - is a dynamic company with relatively young, car enthusiastic employees. "We believe that the future is based on product development and IT as well as connecting the workshops more closely to us - and we follow current developments in our industry very closely," said CEO Loftur Matthiasson, who began his career in the industry as a mechanic and thereafter started at ABV in 2009.
The collaboration between ABV and Triscan began in 2013. "I already knew about Triscan before we started our collaboration, I knew Triscan was known to deliver their broad coverage program quickly. During our collaboration, I've found that product quality is great, and prices are competitive. We buy brake parts, steering parts, coil springs, wheel bearings, drive shafts and CV joints and sensors - and our business is growing year by year. We see many similarities in our values and the way we do business. We’ve developed a close business relationship because we have learned that Triscan understands our position and where we want to go. This has led to a close and open dialogue on how Triscan can support the further development and trading of ABV" says Loftur Matthiasson. Triscan's sale of spare parts to Iceland began in the 1980s, when Triscan was still called Tridon Scandinavia.
70% of ABV's turnover is accounted for by workshops, of which there are about 400 in Iceland. Half of the workshop customers are independent, and the other half are authorized. The workshops in Reykjavík and the surrounding area are supplied up to 6 times a day by ABV with a total of 8 delivery vans. In addition to spare parts, ABV also sells tools and workshop equipment - including lifts. In this context, but also for teaching and warranty claims, ABV has its own teaching and workshop facilities.
A typical market conditions
The comparison to other European countries makes it easy to see: Iceland is clearly different from other auto part-markets.
|Country||Area (km2)||Inhabitants (mio)||Car pool (mio)||Car park's percentage share of the population (%)|
The country's isolated geographical location, limited population and fleet of vehicles spread across a large area make market conditions for a spare part wholesaler rather unusual.
Unless you are willing to pay the price of air freight, the goods are delivered by ship once a week, which puts high demands on the logistics department of ABV. In addition, the deliveries from the central warehouse to the two northernmost departments, about 800 km away and without motorway access, cannot be performed daily.
The average age of the Icelandic car fleet is 12.2 years and, compared to other European countries, it is less varied / complex as car importers restrict the variety of models. For the independent Icelandic wholesalers, this has the advantage that the number of spare parts to be stored can be reduced.
AB Varahlutir history
ABV was founded in 1996 in the capital of Reykjavík. Behind the name of the company hides a funny story. The letters AB in fact have no meaning but were chosen exclusively to ensure that ABV is at the top of the alphabetical listing of Icelandic spare part wholesalers. By the way, Varahlutir means "spare part" in Icelandic. Founder Jon Palsson, the son of the Toyota importer of Iceland, was responsible for the purchase and sale of spare parts in his father's company for 25 years when he decided to start his own business as a wholesaler of body parts. Already in 1999, the product range of ABV was extended with spare parts.
In the period 2010-2016 branches in Reykjanesbær, Akuareyri, Egilsstaðir and Selfoss were opened and in October 2016, the current two major shareholders, Loftur Matthiasson and Gunnlaugur Gudmundsson with Björgvin Atlason, Kari Jonasson and Gudbjartur Gudmundsson took over the company, which today employs 35 people.