What comes to mind when you hear the name AutoXpress? Is it the red and yellow colors or is it the quality of customer service? Perhaps it is the possibility that they, like other retail outlets could soon set up shop on that prime space in your neighborhood. AutoXpress might be your go to auto parts and accessories solutions provider but just how much do you know about the business? The Inquisitor sat down with Jeenal Shah who is an Executive Director of AutoXpress and a third generation family member in a business that is slowly shaking off the family business tag.

You have a 65-year-old business heritage. What is it that most people do not know about AutoXpress?

Although AutoXpress started out as a family business, it is now an institutional business. Approximately 36% of the shareholding is held by financial institutions, namely IFC (International Finance Corporation) and AfricInvest. It was started by my grandfather in 1958, my father took over the business in 1960, my elder brother Sandeep, joined the business in 1985 and I joined the business in 1994.

Talk to us about the evolution of the business.

The business started in Kisumu in 1958. Soon after initiating a relationship with Pirelli Tyres, it was apparent that in order to serve the Kenyan market better we needed to have a presence in Nairobi, so we opened our first branch on Mombasa road in 1998. Within a short time we realized that the business had a lot of potential for growth and opened many more outlets initially across Kenya and into the East African region since 2008.

We started off as a wholesale business but later realized that our own well run retail chain would possibly look after our consumers much better. While we continued our distribution business, we embarked on a journey of opening professionally run retail stores in order to deliver better service to our customers.

Interesting…how did you cope with the competition in the market?

Our competitors at the time were Sameer Africa, which was the biggest player in East Africa, and Kingsway Tyres – companies that were well established, having more than 10 fitment centers each in Kenya.

With Pirelli’s help we accelerated the process of retailing tires directly to consumers and by 2007 we realized that we had a well-liked brand and so we opened more centers within Nairobi, the first one being along Mombasa Road and the second one being Jubilee tires, a 60-year-old tire shop in the city center.

As we opened more retail centers, we got closer to our customer, provided better customer experience and offered better value. We buy everything directly from the manufacturers and retail them, cutting out all the middle persons to bring real and good value to our consumers. We significantly dropped prices from what people were used to. We provide great value and excellent customer experience and this combination is what has helped us to grow exponentially over the years.

Auto Xpress initially went by the name Nyanza Petroleum dealers until 2007. The name did not reflect the range of products and services offered and was limiting from both a geographic perspective and a product perspective. Looking to match the company’s mission which is to give good and fast service to motorists, an advertising agency was engaged to rebrand and they came up with the name AutoXpress. The red and yellow colors are from our association with Pirelli and fortunately they do stand out.

What is AutoXpress’ business footprint?

Besides Kenya, we have operations in Tanzania, Uganda and Rwanda.

Tanzania has really grown quickly. We moved into Tanzania in 2015 and in 6 years we are a healthy number 2 in the market. The growth there has been better than we expected.

We moved into Uganda in 2018 and 2019 was our first full year of business. We then had COVID in 2020 which had a devastating effect on the business making it difficult for us to grow as fast as we had anticipated. We believe in the potential that the Uganda market has. While the market is profitable, it is still small. I’ll be spending more time there to jumpstart the growth journey once again. We are excited about it and are looking forward to growing the business. I think Uganda will soon grow to become number 3 given the right amount of energy, capital injection and vision.

Rwanda is a different market altogether in that we find this market to be a bit more limited. It is a much easier landscape to navigate but it is a small market for two reasons. First, the population is a fraction of the rest of the East African countries and secondly, the landmass is very small and with our kind of business, mileage is what counts. The distance from Kigali to almost any border is no more than 170 kilometers meaning there is not much mileage being done and consequently, the tire and service consumption is relatively small.

The Rwanda market also presents the challenge of tight regulations for our kind of business in that when opening fitment centers, planning permission is quite difficult to obtain and therefore poses a challenge to put up retail centers in residential areas.

What other activities do you love doing besides AutoXpress work?

Cycling!

I love cycling out in the forest- Ngong Forest, Karura Forest or in Tigoni with a group of about 5 to 10 friends. We go as a cycling group every Sunday and I’m religious about that.

I also like the mountains a lot, so I do a lot of hiking and trekking. During the winter season, I go snow skiing for at least one or two weeks which is another one of my new hobbies that I’ve become passionate about.

Talk to us about AutoXpress’ business segment that specifically caters for the ladies.

We have more female sales assistants and branch managers than men in a traditionally male dominated business. There’s some level of comfort and confidence that comes with a lady customer being attended to by a lady sales assistant or branch manager. Men also like the ladies and the ladies like the ladies, so it works well for all our clientele. We have also noted that men get quite impressed when they are served by our experienced customer service ladies.

While it is still difficult to find female technicians in the market, at Autoxpress we have managed to recruit a few of them in our retail service centers.

Further, our promise to our customers is clean and aesthetically pleasing facilities. If you go to any of our garages, you will find them clean. In particular our clean washrooms are thoroughly appreciated by lady clientele.

There is the perception that ladies are not quite conversant with automobile related issues and consequently most ladies end up paying exorbitant charges for minor problems. How are you addressing this?

Nods in agreement.

While it is still true, that perception is much less today compared to the past.

In our service and product offering, we emphasize on transparency. The first form being pricing. Generally, in the garage business in Kenya both in the past and the present, one would receive a quote for a product or service depending on one’s gender, clothing and the kind of car he or she was driving.

At AutoXpress, you will find all product and service pricing both on our website and on physical smart menus at the store. We endeavor to put our best foot forward by providing the lowest non-negotiable price upfront, making it easy to select and purchase what one requires or desires.

The other thing we do is that we are very clear about giving a warranty on everything we sell and we don’t ask our customers for a receipt in case they come back for a warranty claim. We have a Customer Relationship Management system where all customer service history is recorded and all warranty claims can be verified. Our desire is to have a lifetime relationship with our customers.

Today our customer base is broad and cuts across all demographics.

Let’s talk about AutoXpress’ governance structure as an institutional business.

We are not a public company but we’re also not a family business anymore as we have institutional investors. We have AfricInvest and IFC as part of our shareholding. The Board has 6 Directors, Sandeep and myself are the Executive Directors. AfricInvest has two representatives on the Board- Skander Oueslati and George Odo and we have two Independent Directors namely Mr. Pratul Shah and Mr. Duncan Wilkes.

With Actis and AfricInvest coming into the business and you having to cede some level of control, would you say having external partners is a good idea?

We agreed to external partners primarily because we wanted to diversify risk. We had been re-investing all our profits into the business and taking on more debt to grow the business. However, since we didn’t want to continue doing so, we agreed to sell an equity stake.

However, external partners who deploy capital would of course need to have a say in the running of the business. Hence with the investment from private equity in 2014 meant we constituted a board. Having external directors on the board has been very beneficial for the business as they provide sound business advice to grow the business as well as manage risk.

If you are humble enough to admit that you don’t know everything, you will benefit immensely from better governance that a formal board brings.

I’d like to get more insights on your Board composition and dynamics given the different players in the business.

There are 2 types of directors on a board, independent directors and shareholder directors. Independent directors are very important because they are more risk averse than shareholder directors who often take risk when chasing profits. If it’s the long-term survival of the business that you are after, you must have a good perspective on your risk profile. The INEDs provide a balanced point of view on this. The external members on our Board have done this very well, constantly checking on our risk profile while the business is growing aggressively.

The external directors also provide exposure and access to different kinds of resources that will help your business grow. When we ventured into the retail business, we couldn’t find an equivalent business in Kenya to model on. Our external partners (Actis) provided access to global talent and helped bring on board the former Chairman and CEO of Tire & Battery Corporation (TBC Corp), Larry Day who assisted us immensely in formulating and executing our retail strategy since he had done this successfully in a developed market already. He would attend board meetings via Video conference, physically come once a year to visit us, engage with our regional managers, branch managers and staff mentoring them, advising them and sharing critical insights on leadership.

(TBC Corp was started in 1956 and is one of North America’s largest marketers of automotive replacement tires. It has worldwide operations spanning wholesale, retail and franchise while providing customers best-in-class brands, automotive maintenance and repair services.)

What about the shareholder directors?

The shareholder Directors are pretty much about ‘roll up your sleeves and grow the business’. But with a very short time frame to grow shareholder value and with many things requiring your attention, one has to learn how to prioritize. One needs to be clear on what is good for the customers and for the business and the top five or six issues identified then become your pillars for strategic growth.

My decision making is clearer because of this dynamic on the Board.

Do you have committees?

Yes, we have two committees. Remunerations Committee and the Audit Committee.

Given that Auto Xpress has been here for quite some time, what advice would you give an entrepreneur who is looking to enjoy similar longevity?

First is grit!

One trait that most entrepreneurs have is grit as running a business is difficult. It has wonderful ups and disappointing lows and you need to have the grit to get through the low points.

The second quality feeds off the first in that as an entrepreneur, you may not have all the skills to do everything, yet you can’t employ professionals because you do not have the financial capability. For a young entrepreneur, you need to develop various skills and very quickly meaning you will be required to go outside your comfort zone.

Case in point, I’m a chemical engineer who knew nothing about business. I did not go to any business school nor did I attend any accounting classes or Human Resource programs. However, by running this business I have gained my ‘African MBA’ (on the job MBA). I’ve had to learn all the skills that you need to scale a business, that is, how to look after customers, how to motivate your staff, how to attract investors, what to do when selling a business and so on.

The ‘African MBA’ may have taken longer than going to business school but it does sure run in your veins forever! My advice is to jump in. You have to be hungry as an entrepreneur if you really want to win. If you don’t want it bad enough, then it’s not the job for you. If you really want to have something, whether it’s growing your business or anything for that matter, you must have the fire inside of you. The high and satisfaction of seeing your growth is incredible.

Looking back 30 years, it’s very satisfying to see how far we have come. I feel that I am more streetwise and sharper having learnt so much over the years on the job. The people around me (suppliers, customers, board members, staff, etc) have taught me everything. I have also learnt a lot from attending many of Sunny Bindra’s leadership courses over the years.

What future do you foresee for the business?

This is, in my opinion, my last chapter in the business. My goal now is to develop a team which can take over from Sandeep and myself. We will then probably stay on as Non-Executive Directors on the Board for a while. I am comfortable with what we’ve achieved at AutoXpress and look forward to somebody else taking this good business and making it into a great business. The other goal in the next 5 years or so is to establish a presence in Southern Africa and West Africa as well. The plan is to make AutoXpress a truly Pan African business.

Are there any family members looking to join the business?

My two nieces are already in the business overseeing the customer service side of it and they’ve grown into and along with the business since they joined.

Looking back what do you wish you would have done differently?

I wish I would have done an MBA or professional program after my engineering course. While I have learnt a lot through my ‘African MBA’, I think I could have shortened the time frame of learning and could have grown the business faster had I done an MBA program. I see the people that we now employ with MBAs are definitely more numerical and analytical than I was when I first joined the business.

I wish I would have spent some time working for a multinational or a big business before I joined AutoXpress to learn how things are done professionally so that I could have brought some of these best practices to AutoXpress earlier.

This article should have been a TED Talk. What do you think?

Here is the Inquisitor’s take: While it is pleasing to see the organic growth of the ideas you have put your efforts to, I can only imagine the satisfaction that comes with evolving into a person you perhaps could never have envisioned yourself to be. Jeenal started off as a chemical engineer but grew into a streetwise business achiever. Learning is a lifelong process and Jeenal is a personification of persistence and desire. Jeenal added that business is all about human psychology which he wished he had studied earlier. Learning how to motivate people, how to hire good people and learning to understand people better Is a key cog to growing a successful business.

The Inquisitor