Arnold Kontz, a family-run business based in Luxembourg, began as a bicycle manufacturer before gradually expanding into motorised two-wheelers and then into the automotive sector. From the 1950s onwards, the company forged key partnerships, notably with BMW, for which it became an importer, whilst gradually expanding its portfolio to include several brands. Over the generations, the group built up a network of dealerships and established itself as a major player in the automotive distribution sector in Luxembourg. The arrival of Tommy Kontz marked a turning point, with the roll-out of a multi-brand strategy, which was subsequently continued by Benji Kontz, who took over the management of the company in the 2010s. Faced with structural changes in the sector, the company embarked on a strategic repositioning, which culminated in 2024 with the sale of its automotive operations to a Belgian group. It is now refocusing its development on its historic bicycle business, marking a return to its roots.
In your view, what is the main lesson you have learnt from your experience (or your ongoing reflections) regarding succession and engaging the next generation within your company?
In 2011, a health issue forced him to step back from day-to-day operations, which accelerated the handover of power. For our staff, partners, suppliers and myself, the generational transition had therefore been taking place naturally since 2005, with 2011 serving as the catalyst that formalised it.
How do you manage to balance the family’s expectations with the company’s economic and strategic imperatives, and which trade-offs have been the most decisive?
“One of the advantages of our company is that, historically, the number of decision-makers has always been very small (with one or two people at the helm), and family members not involved in the business have never interfered in its management.
The more patriarchal approach of two generations ago has gradually given way to one that is more focused on trust and respect. The lesson I was taught (or observed) in my family has always been that the interests of the business take precedence over those of individual family members.
It was always quite clear to me, and I think to the other family members as well, that if the business was doing well, the family would inevitably benefit too. So the family’s interests and the business’s interests are, directly or indirectly, aligned.
Which decisions or developments in governance or the professionalisation of management have had the most significant impact on your company?
“Our company takes an approach that focuses on minimising red tape. To be responsive and make the right decisions, we must avoid inertia, excessive bureaucracy and too much hierarchy. If our group has been able to assert its interests against major car manufacturers and has also successfully carried out successive divestments as we have done, it is because our organisation has always given its leader the freedom to implement – and do so with great consistency – any strategy.
In my view, compromise can sometimes lead to a watered-down and less effective approach.
In my view, compromise (within a shareholder base or an overly broad management team) can sometimes lead to a diluted and less effective approach. Generally speaking, we adhere to the legal framework and apply common-sense rules, with a few safeguards that seem useful. Over the last 20 years, we have certainly never created our own internal rules that would have held us back in any way.
How does your company balance the need to honour its heritage with the need to innovate or transform itself in order to remain competitive?
‘In my view, heritage and innovation are not mutually exclusive; indeed, a company must continually adapt to changes in the world, the economy and consumer demand in order to preserve its heritage.’
In our case, I actually see the sale of our car business as a way of preserving the company and its heritage in a market that is set to change significantly over the next 15 years. The fact that we can now focus entirely on the bicycle trade, our traditional business, was an opportunity made possible because, over four generations, the family continued to cherish the bicycle shop alongside the car dealership, which had grown in scale.
This successful chapter in the automotive sector was thus brought to a close at a time we deemed strategically opportune, thereby mitigating the risks associated with the divested business and ensuring that the company’s legacy is both enhanced and preserved for the next generation.
What were the most decisive choices regarding the financing of growth, and how did they influence the company’s governance and trajectory?
“Apart from one notable exception – the acquisition of a group of concessions in Belgium during the pandemic – our growth has always been organic. The most significant financing requirements were linked to the acquisition of the various operating sites.
Since 2005, the company has never paid dividends, enabling it to draw on its equity capital and provide sufficient guarantees to secure financial institutions’ support for our projects.
The most ‘spectacular’ investment was probably the 1978 purchase of the premises of the former Mercedes importer at 184 Route de Thionville, at a time when BMW’s business was still relatively small (rue Bender). It took courage and numerous personal guarantees from the shareholders for the bank to back this acquisition.
When I joined the company in 2005, it was already on a more solid footing. Furthermore, the company has not paid any dividends since then, which has enabled it to use its equity capital for certain financing needs and to provide sufficient guarantees to ensure that financial institutions are willing to support our various projects.
What tax or legal issues have proved most critical for your family business, and how have you addressed them with a long-term perspective in mind?
“For several decades, the most significant legal issues centred on successive import and dealership contracts, whereas in the car distribution sector, the dealer is economically highly dependent on his (often sole) supplier.”
The diversification of the brands we represent, coupled with the early signing of new contracts with Jaguar Land Rover, Aston Martin and Lotus, enabled us to sell the BMW business in 2015 at a strategic moment for us.
More recently, it was, among other things, the introduction at European level of new contractual frameworks and margin systems – notably the attempt by certain manufacturers to introduce agency agreements – that reinforced our decision to withdraw from the car distribution sector.
What strategies have been most effective in developing your product or service offering whilst remaining true to the company’s core values?
“From the customer’s perspective, our product range hasn’t changed much over the last 100 years. We have always provided means of transport and the associated services. The idea has been to stay as close as possible to the customer and build a genuine, long-term relationship.
This is much easier within a family business, where the shareholders are not necessarily focused on maximising profits. We are fortunate that our sector is both commercial and artisanal.
And, perhaps counterintuitively, our approach to growing our business (in the long term) has generally been to invest in customer service – that is, the after-sales support that enables us to build genuine, long-term relationships with our customers.
At what point did you feel it was necessary to accelerate the company’s growth, and what lessons have you learnt from this phase of scaling up?
“By 2014, we had achieved such a high market share with BMW that it was becoming difficult to generate further growth. Sometimes, simply maintaining satisfactory sales and profit figures can be a challenge in itself and a significant achievement.
To facilitate growth, it is sometimes helpful to start again from a lower level.
However, our powerful suppliers often viewed a lack of growth as a failure, and the penalty for the dealership was a reduction in profit margins due to excessively high (growth) targets. This was one of the reasons that led us to sell the BMW business in 2015, following a record-breaking few years.
We were then able to focus on developing our British brands by building and refurbishing dealerships and redefining the marketing and image of these brands in Luxembourg. The potential for growth here was enormous, and within just three years we had succeeded in selling over 1,000 new cars a year.
In my experience, I have come to the conclusion that, to facilitate growth, it is sometimes useful to start again from a lower level.
What were the main drivers – and the main challenges – of your internationalisation strategy?
“We did acquire some dealerships in Belgium in 2020, but this was more a matter of strategic opportunity and synergy than a genuine desire to expand the business internationally. As far as our bicycle business is concerned, we currently have no plans for international expansion.
In your experience, how can a family business attract and retain key talent in an increasingly competitive environment?
“Compared to large corporations or publicly listed companies, family businesses can make a difference through their corporate culture and the values they uphold. Whilst HR and marketing departments in large multinationals are certainly busy creating a certain atmosphere and promoting corporate values, this often comes across as artificial.
I get the impression that it’s easier for employees to identify with the more authentic values of a family business. And since family businesses often focus on the long term rather than short-term profit maximisation, they can take a much more employee-friendly approach and, for example, avoid making redundancies simply because the company hasn’t quite reached break-even point.
How has increased international competition in your domestic market changed your positioning, organisation or strategy?
“Like all retailers, we are undoubtedly competing with the major online platforms. But bicycles remain a relatively expensive item, are bulky to post, and increasingly require skilled labour for assembly and subsequent maintenance. Our customers, for their part, also want to build a relationship with the shop that will support them with servicing and repairs.’
This applies less to accessories and clothing, where competition is certainly fiercer – not because of the price, but because many people have simply got into the habit of ordering online for the sake of convenience. We have therefore also set up our own online shop, enabling customers who wish to support local businesses to place orders with us.”
This article was written for the June 2026 issue of Paperjam magazine, published on 20 May. The content is produced exclusively for the magazine. It is published on the website to contribute to Paperjam’s comprehensive archive. Click on this link to subscribe to the magazine.
Is your company a member of the Paperjam Club? You can request a subscription in your name. Please let us know via club@paperjam.lu.
