7 Questions for the Interstate Batteries CEO
Carlos Sepulveda talks about the state of his business.
Dallas-based Interstate Battery System International Inc. comprises a privately held group of companies that sell, market, and distribute more than 16,000 types of batteries and related products, including automotive replacement batteries. The company has more than 1,500 employees and annual revenue in the $1.5 billion range.
1. How are things going?
In January of this year we sold 1.6 million units in our legacy SLI (starting, lighting, ignition) battery business. That was the highest monthly total in our history. What’s more significant, though, is that our SLI sales volume for the 2011 fiscal year to date—May through Sept. 15-- is up 7 percent over last year.
2. Why is that?
We made a concerted effort to enhance our presence in the marketplace, including increasing the availability of our products and giving our dealers better tools to analyze replacement needs by ZIP code, for example.
3. What sort of market share does Interstate have in the legacy battery business?
Our total share is 15.6 percent, making us No. 1 in the market. Our target is to get to 20 percent over the next five years.
4. Is the sputtering economy good for the battery business?
Yes it is. With the slower economy, people are keeping their vehicles longer; the average age of vehicles on the road has gone up over the last five years. So there are more “turns” in terms of the replacement batteries they need. (The average new-car battery lasts anywhere from 18 to 30 months, depending on a number of factors.) Studies show that 24 percent to 28 percent of all vehicles will get a new battery this year.
5. What’s your take on the economy these days?
It’s under a lot of pressure! The increase in the national debt appears to be quite sobering. I see increasing pressure on the value of the dollar. People wonder why the economy isn’t rebounding after all the stimulus spending. One reason: business owners are expecting their costs to go up, in terms of higher taxes or higher interest rates, for instance. It’s hard for businesspeople to want to invest, given the economic storm clouds on the horizon.
6. Where is your greatest potential for future growth?
There is a continuing appetite in the marketplace for portable mobile technology. We will also see growth in auto batteries, with all the hybrids and electric vehicles coming out. Our big asset there is our North American distribution network.
7. And your biggest challenge going forward?
The leading indicators of success for any undertaking is the quality of the people you have on the team, and the quality of their thinking. How to attract and retain the absolute best is key. I’ve been here for six and a half years, and I can say we have the best team now that we’ve ever had.