Automotive Art was established in August 1990 by joint founding partners Dereck Foster and Hugh Blades. The company started out by specializing in automotive paints but later diversified into broader automotive categories, including tyres, tools, wheels, car accessories, automotive chemicals, additives, waxes and polishes. Today the company has seventeen Automotive Art franchise stores operating in nine territories throughout the Caribbean, while the Automotive Art private label paint brand is distributed in many countries around the world.
Dereck Foster, Executive Chairman of the Automotive Art Group of companies:
‘In the early days we started out selling Glasurit products since we had the distribution rights throughout the Caribbean, but also developed our own private label to augment our overall product lineup in the value segment of the market. Then, while still building our refinish business, we diversified into other related automotive categories, eventually opening our own retail store. That proved to be a very successful move and it also provided the company with a convenient way of showcasing our paint products to the distributors we were using throughout the region. But we soon noticed that when our regional customers came to the store in Barbados for training, they were just as interested in all our other retail items as they were in the paint. For a while we found ourselves teaching them about all the aspects of our business model – for free! Clearly we knew that situation couldn’t continue and, in seeking a solution, we saw the opportunity to launch an Automotive Art franchise model.
After recruiting a consultant and spending about a year producing all the processes and documentation, we got started by converting some of our existing distributors into franchisees. Once we’d taken that first step, we continued by signing up new people around the region. By the time we’d concluded just about the whole English-speaking Caribbean, it was clear that any further expansion of the franchise would entail a whole new set of challenges. It is a complex business to teach and quite tough for the franchisees to manage, plus once you are dealing with non-English speakers then you have to translate and reproduce all the documentation and marketing literature. And moving into bigger markets outside the Caribbean would be even more demanding, especially with regard to different types of legislation and having to compete with major international players.
The other, more positive reason that we held off expanding the retail store franchise model was that by then we had identified the automotive paint business as our main potential for future growth outside the Caribbean.’
Doug Armstrong, C.E.O., Automotive Art Group of Companies:
‘We originally used to buy paint from a European company and we had an agreement to sell our private label into North America. However, not long after we started making in-roads in the US market, a large US multi-national paint company came along and acquired our European supplier and cancelled our private label contract that allowed us to sell our paint in the continental USA. We could have fought them, and probably eventually won, because we did have a contract; but we knew it would take years and cost a lot of money. So, in true entrepreneurial spirit, we made the most of a bad situation by negotiating a better contract for our Caribbean distribution rights, plus we sold our US client base to them.
That setback definitely hampered our expansion but there was no way we were going to just give up our strategy; so we started looking for a new paint vendor, ideally one where we could control our own destiny. In the world of automotive paint a handful of big brand names that control the global market. Less than ten companies control about 80% of the entire market. The smaller manufacturers share the remaining 20% and, among them, there are less than a dozen companies that can produce really good colour paint with a good match – and colour matching is critical for car paint. As fate would have it, we lucked out by finding one of them in Poland, with extremely good technology and lab skills and the capacity to develop new products fast.
Fortunately for us that company had just two shareholders, one aged 45 who wanted to expand and the other aged 67 who wanted to retire. It took us a while to negotiate with the older partner but we eventually struck a deal and in June 2012 we became a joint venture partner in their company. That was a huge step for us to take but the benefits are massive, not least of which is we now have complete control of our supply chain. The first production they did specifically for us was an entire paint line designed to meet US regulations and allow us back into the US market. Since then we have helped them by putting in better operational systems, like the ones we use in Barbados. We have also installed new equipment and built a new lab and warehouse, After year one the production company has grown almost 30% and recorded its best year. The directors and shareholders are very happy!’
‘We are still a small player in terms of the wider industry but with all our new products we have a bright future. Our company headquarters is in Barbados, our corporate HQ for paint is in USA, we have a logistics centre in Florida, we manufacture in Poland and we are now supplying over sixty markets in the Caribbean, Central America, USA, Canada, Europe, Russia, Middle East and Africa.
We are manufacturing our own genuinely world-class automotive paint and that gives us real global opportunities and a very exciting future. So we might still franchise into the bigger markets of the world but, if we do, we will focus on our paint products.
We want Automotive Art to be a global brand. It doesn’t matter where we come from, what matters is where we are going to. And one day I’d like to be able to say that we sell our products in every country in the world. That is our dream and our management team is focused on that target. That is what we want to do and that is our intention.’