Moving South: Grease Monkey Expands to South America
Growing companies are usually seen as successful ones, and innovative companies often think outside their “borders” to achieve this growth. Grease Monkey is a Denver, Colorado-based quick lube chain, but has been looking to expand its market share internationally. With locations already in Mexico, China and Saudi Arabia, the company was looking to expand into South America — opening its first store in Medellín, Colombia, on November 1, 2016.
With a population of nearly 2.5 million, Medellín is the second largest city in Colombia, making it an ideal location to pioneer a new automotive service business. In Colombia, as in much of South America, cars are considered serious investments, second only to purchasing houses. In addition, people tend to keep their vehicles for much longer periods of time than is typical in the United States. The average lifespan of a car in Colombia is around 20 years, compared to about 11 years in the U.S. That means Colombians take their auto maintenance very seriously.
The quick lube business model is a somewhat novel concept in Colombia. Small, independent shops still handle most automotive servicing and maintenance in the country. In fact, the automotive maintenance industry has seen virtually no change for at least the last 20 years. Colombian society, however, has undergone substantial upheaval and advancement during that same time.
Once dubbed the “most dangerous city in the world,” Medellín has undergone a renaissance in recent years. It is now a vibrant and thriving Latin American city with the drug violence and guerilla warfare that plagued its past now fading from memory. This new, prosperous chapter in the city’s history has shifted the demographics of auto service consumers. The female market share, especially, has expanded dramatically. These changes have created a market ripe with opportunity for entrepreneurs willing to rise to the occasion.
One of these entrepreneurs is the owner of Colombia’s first Grease Monkey shop — Juan Luis Saldarriaga. With 30 years of experience in the oil, lube and auto service industries, Saldarriaga, and the American Franchises S.A.S. company that represents Grease Monkey Colombia, could sense the winds of change blowing in Colombia. Realizing a new business model was needed to meet the needs of the modern Colombian consumer, Saldarriaga turned to Grease Monkey.
From the beginning, Saldarriaga determined his Grease Monkey location in Medellín would be unlike any other auto service shop in the city. The differences started with the building itself. With its brick façade following the pattern of Grease Monkeys in the U.S., the store stands out against the traditional Colombian architecture. Some patrons have even mistaken the establishment for a restaurant or donut shop.
Inside, the difference is even starker. The floor and pits are painted with a light gray epoxy, and the entire facility is kept as clean as an operating room. For customers who consider their vehicles multi-decade investments, the spotless, state-of-the-art facility gives them the confidence their car is being well taken care of. Especially with the expanding market share of Colombian women in recent years, the clean, pleasant interior space adds an extra incentive to keep customers coming back. The garage portion of the shop features the same cutting-edge equipment and layout as Grease Monkeys in the States. Since the oil and lube industry is, in many ways, still in its infancy in Medellín, the overhead doors, pumps and lube guns all had to be imported into Colombia from the U.S.
As one of the first of its kind in the country, finding and training qualified employees is essential to the Medellín Grease Monkey’s ongoing success. To that end, the facility includes a training center where new employees can learn the ropes and continue to update their skills and knowledge as time goes on. Employees in Colombia are eager to learn, and excited to be part of an innovative, customer-focused business.
As can be expected when dealing with an American business model being transplanted to a different country and culture, establishing Grease Monkey Colombia was not without its hurdles. For one thing, a supply chain for the shop had to be created without the help of an existing network. Thankfully, one of the largest oil companies in the world has local ties in the country, and Grease Monkey Colombia was able to secure a lubricant supply contract.
With its doors open for business and its logistical problems settled, the next big challenge facing the business was building the Grease Monkey brand in Colombia. Even though Grease Monkey has been around since 1978 and has a firmly established reputation in the States, the brand is basically starting from scratch in Latin America. On top of that, the quick lube business model is very new to Colombian customers. Building up the brand and introducing the concept of in-and-out oil changes remains a top priority for the new Grease Monkey.
At this early stage in the business, nearly all of the Medellín Grease Monkey’s patrons are first-time customers. Saldarriaga and his team are determined to build a foundation of loyal, repeat customers. To do so, they are committed to providing the best in customer service while introducing the Grease Monkey motto of, “less hassle, more hustle.”
As with most oil and lube businesses, the Colombian Grease Monkey’s most popular service is the oil change. Additional services include coolant flush, power steering fluid change, transmission fluid change, cabin odor elimination and air filter replacement. So far, all have been well received by customers. At this time, the shop’s focus is primarily on privately owned passenger vehicles, though fleet contracts and other, larger clients may follow.
Compared to the U.S., Grease Monkey Medellín’s prices are higher. This is largely due to the greater expense of oil in the country. Other overhead, like building rent, is comparable in cost to U.S. stores, though the price of construction is less. Labor, on the other hand, is dramatically cheaper in Colombia.
For now, Grease Monkey Medellín remains one of the few quick lube businesses of its kind in Colombia. Despite introducing a novel way of doing auto maintenance, the new business is primed for success.
“The amount of time and effort Juan Luis put into the center to mirror the Grease Monkey model is astonishing,” said Rick Juarez, director of Purchasing and corporate regional director of Grease Monkey International, Inc. “There were many hurdles to overcome with sourcing items in Colombia, but Juan Luis was very diligent.”
With a lot of hard work and a tried and true business model, Saldarriaga and his team are now poised to change the Colombian auto service industry for good.