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Entries in Consumer (14)

Wednesday
Dec142016

Inventory Levels

If you are in the auto business, or just a casual observer you are aware of inventory levels at dealers by the number of vehicles that are displayed (parked) on the premises.

Way back in the day, before technology, inventory levels were more of a gut feel, with simple ratios (up to a point). In addition to the mantra "You cannot sell from an empty shelf". Usually there was more than less inventory on the ground, be it new vehicles as well as used. 

One strategic vector for new inventory was to have specific models, or specific options that provided a competitive advantage. Those were the days of Bespoke Vehicles from the factory.

New vehicles are assembled in a "just in time" process where most if not all components are just in time, and sequenced to the assembly line. These vehicles that are assembled just in time, get stored on various dealer facilities for months prior to being sold. Reflect on this for a moment...

When components were stacked at assembly plants, and vehicles were stacked on dealer's lots it sort of all made sense.

At one time...the revenue generated by finance contracts from the captive finance company, would often cover the floor planning of the new vehicle inventory. Reflect on this too for a moment.

in 2016 with a ton of technology at the factory, at the dealer, and empowering the consumer, inventories of new and used vehicles remain stagnant, with modest improvements, if any from the good old days (gut-simple ratios).

Looking at "Days to Turn" in Canada from JD Power Market Metrics for YTD November.

Days to Turn

....................New............Used

2012..............69...............61

2013..............65...............60

2014..............62...............59

2015..............70...............60

2016..............73...............61

From the customer's perspective its irrelevant how many vehicles are on the ground at any time, and for how long. For the dealer its an expense. When new vehicle inventories surge its an additional expense.

You have to wonder with record sales, an ample supply of all sorts of technology, why the new vehicle inventory is so high in Canada this year.

What do you think?

 

Tuesday
Nov012016

Digital Reroutes

A though provoking paper...

 

Tuesday
Oct252016

Is The Last Quarter A Pivot?

October is the first month of the last quarter of 2016, big deal we all know that. Absolutely, and in a few days October will conclude, and we will get an improved overview of how the quarter will develop, the year, and the horizon for 2017.

Its a loaded sentence...lets take a look at the auto business in Canada.

  • At the end of the 3rd quarter it remained a record year with signs of a slow down.
  • The mortgage rules changed half way in October. What does it have to do with the auto business, perhaps nothing...
  • CMS (Citizen Main Street) by now fatigued of powering the Canadian economy.

Are we reaching a pivot point?

  • Longer term financing has remained a constant for the past few years.
  • The auto business is pulling ahead on the terms and rolling over deficiencies.
  • CMS can easily pull back on the terms, and seek an elusive equity position.

In a few days we will have a clearer picture of the landscape.

 

Wednesday
Oct122016

Canadian Sales Three Quarter 2016

It keeps on going...

 

 

Tuesday
Sep062016

Reality...After The Dog Days of Summer

This morning we all re engage with reality after the Dog Days of Summer.

Perhaps we are all a little less laid back, and have cranked up the reality meter over the long week end.

As you scan the immediate horizon there are 4 months remaining till the end of the year, you wonder where the time went, and where it will go as we near the end of the year.

Auto Sales

We anticipate auto sales in Canada to continue the record breaking pace since the beginning of the year. Reinforcing the unique Canadian mobility model.

Auto Business

Yes...the union will make its voice heard in the negotiations to have various assembly plants remain in Canada. There will be noise, posturing, a myriad of opinions, and a workable solution will be agreed upon for the short term.

AV

Autonomous vehicles will continue to capture attention, its the next leap for cars. Its a compettive arena that will continue to expand.

Canadian Consumer

Will continue to power the Canadian economy, while businesses continue to hold back investments based on various vectors of insecurity, and maximising profits. Keep in mind that CMS (Citizen Main Street) has endured the brunt of the decreased value of the Canadian dollar.

Suggestion for You

  1. 1-At the end of each workday, write down the six most important things you need to accomplish tomorrow. Do not write down more than six tasks.
  2. 2-Prioritize those six items in order of their true importance.
  3. 3-When you arrive tomorrow, concentrate only on the first task. Work until the first task is finished before moving on to the second task.
  4. 4-Approach the rest of your list in the same fashion. At the end of the day, move any unfinished items to a new list of six tasks for the following day.
  5. 5-Repeat this process every working day.

  6. Read the whole story...here.

 

 

Thursday
Sep012016

An Ocean Of Opinions

As we slowly (you wish) progress towards reality next week. We can still be a little whimsical on these last few days of the Dog Days of Summer. Might as well take advantage of it...

Summer

Hopefully you had a wonderful summer with your family and friends, enjoyed the warm climate, sun, and activities that we all do in the summer. Created your own memorable moments. Agreed...there is little time to catch up. Is climate change a reality? What do you think?

Real Estate

In Canada there is a new opinion every day on the health, frothiness of the real estate market. Especially in Toronto and Vancouver. It seems that everyone is an expert, everyone quotes the other expert on various snippets of the market.

As per the opinion of experts an adjustment if not an outright crash is just around the corner. What do you think?

The reality is that the market is on fire and will remain on fire for the foreseeable future.

Mobility

Pent up demand, its just a blip, and so on. We have been saying for quite some time that the Canadian model has migrated from ownership to mobility and will continue to migrate towards mobility. Reflect on this for a moment...owning a vehicle is no longer the accomplishment that it was a few years ago..

Eyeballs

In an age of social media, everyone is in the eyeball business. How to attract eyeballs for a nano second to generate more views, hits, and whatever else it will take. When an insignificant event on the other side of the planet is covered by media for days running, complemented by opinions through Skype from some obscure expert.

Its the quest for eyeballs.

Simplicity

You are very good at what you do, it looks simple. World class athletes make it look easy, almost to the point that anyone can do it. A competent car makes it feel very easy. Inevitably we get embroiled with the technology, the complexity, and often forget the simplicity.

Needless to say that the various opinions merely obfuscate the simplicity.

Technology in Cars

Its the immediate battleground for most manufacturers. Its no longer my engine or transmission is better. Back in the day a Turbo Hydro automatic transmission was a global benchmark. Today its technology in the auto business, and especially the product. Lets not forget a bunch of disrupters on the side lines waiting for opportunities to pounce.

My car has more technology than yours...

Canadian Economy

Still powered by CMS (Citizen Main Street) and will continue to be powered by CMS, and cheap money from Canadian banks. Lets not forget all the doomsayers that are predicting an imminent crash. There is too much skin in the game with CMS. Lets talk about a bunch of other stuff, and lets make sure CMS remains upright.

Oil

Reflect on this...decades ago there was the oil shock with prices sky rocketing, now its another oil shock with prices plunging. Obvious that Alberta takes a hit...

Interest Rate

You can see a mild rate increase coming on the horizon at some point. Imagine a 25 point increase, it will be depicted as an earth shattering event, generate ocean and ocean of opinions on the upcoming doom.

We could keep on going...

 

 

Wednesday
Aug242016

New Model Launches

Have you noticed that the majority of new model press launches from any manufacturer all follow the same format to emphasize the various virtues of the model being launched.

Here is the format

  • Pick an inetresting location, if its exotic even better.
  • Invite auto journalists that write for a platform that attracts a gazillion eyeballs for a few nanoseconds.
  • Expect the journalists to write an "inviting" article on the new model, that will be instantly forgotten by the target audience.
  • At a later data have press vehicles available for the same and more journalists.

This launch model goes on and on, and on. While costing substantial sums of money.

Its all done at a time when vehicles are basically good, most of the components come from the same suppliers to augment economies of scale, and obvious that all vehicles encompass a myriad of technologies and user interfaces that are increasingly complex and distracting.

Yes...there is a strong level of product parity.

Subsequently the dealer personnel is trained on the new product, while most manufacturers have one form or another of "online" training / learning supported by tests. There are also various live sessions with various dealer personnel.

Reflect on this for a moment...who should go to the exotic place to experience the vehicle, the journalists that will attract a gazillion eyeballs for a few nano seconds...or the individuals that will eyeball customers and prospects in a showroom on a daily ongoing basis.

With the auto industry slowly migrating towards a customer experience model to distinguish itself from increasing product/feature parity.

How do you launch the customer experience attached to the vehicle being launched?

How do you launch the passion required to close a deal ounce the vehicle is in a showroom?

How do you launch the ownership experience attached to that specific vehicle?

New model abc has all the features you expect, in addition to this new sensor here, the other gizmo there, it almost drives itself, the all important fuel economy (that you will never achieve) is xyz. It will be available in showrooms on such a date for a starting price of so much.

Sound familiar?

Sometime in the future...

We visited a dealer with new model abc to give you an overview of the ownership experience, besides the navigation, adaptive cruise control, warranty,  the ownership experience encompasses 1-2-3...and its the coolest thing.

Reflect on this for a moment...

The astute manufacturer will not simply launch a new model but also the service, and ownership experience attached to the new model. 

 


Wednesday
Jun082016

The Colonel and Cars - Part 2

 

 

We continue this morning with The Colonel...

Q- Differentials...

A- Still old school mechanical.

Q- Center of the Dash...

A- The place where a ton of customer interface technology resides.

Q- Styling...

A- Sells a lot of cars

Q- You mean compelling styling...

A- Absolutely, must make a statement with street presence.

Q- Cadillac...

A- There are no words...phenomenal cars, with poor sales.

Q- Utility vehicles...

A- Supplanting cars...Swiss Army knife...go figure.

Q- Tool Box...

A- Seen the latest tool boxes and work benches...Wow what else is there to say.

Q- Transmissions

A- Competing with truck transmissions from back in the day, a 9-10 speed automatic is starting to look like an RTO9513.

 

 

 

Tuesday
Jun072016

The Colonel and Cars - Part 1

Colonel, great to be sharing a cappuccino with you again this morning.

Q- Airbags...

A- How can a gazillion defective airbags make their way into vehicles?

Q- Driving...

A- Not much fun on congested roads.

Q- Engines...

A- You know the answer V8 and a V12 for the experience.

Q- Turbochargers...

A- Great technology works well with smaller displacement, less cylinder engines.

Q- Are you saying that V8's with twin turbos are perhaps...

A- Raise the bar on the complication factor, while lowering the emptional factor.

Q- CMS (Citizen Main Street) in Canada seeks mobility.

A- Absolutely, at a monthly payment that fits the budget.

Q- Tires...

A- Great advances in tires especially when you "want to apex everything".

Q- Can you go overboard with tires and wheels.

A- Absolutely...when brake discs look like dog dish hub caps behind the wheel...you arrived.

Q- Headlamps...

A- LED lights are totally cool...really cool.

Q- Interiors...

A- Too much emphasis on leather and the various renditions of leather.

Q- Renditions of leather...

A- Yes...you wonder which animal it came from.

Q- Electric power steering...

A- Probably saves fuel, can tweak it with technology.

 

 

Monday
Jun062016

The Colonel and Cars

This week we have The Colonel with us for a cappuccino in the morning, we will engage him in conversations to explore what is on his mind.

Q- Is there more or less passion in the auto business?

A- Less, its supplanted by technology.

Q- What was it about a 1967 Stingray?

A- Big block, the side pipes, the rumble.

Q- What is it about an S-Class sedan?

A- Supreme highway cruiser, with an element of F&*k You.

Q- Manual transmissions.

A- A reminder of mechanical cars, clutch, linkages, clutcch pedal, shifter.

Q- Fuel Injection...electronic.

A- Precise fuel metering, better performance and economy. Direct injection sounds awful in a 4 cylinder.

Q- Front Wheel Drive

A- Cost and space saving.

Q- Full Size Pick Ups.

A-The second coming of the classic North American luxury car.

Q- Premium economy.

A- Works well for shareholders.