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Entries in Economy (3)

Thursday
Jan192017

Sideswpided

At times you have an epiphany moment, and the other day it appeared on our radar that not only can you get disrupted from a myriad directions. Yes...everyone is constantly talking about disruption, business models changing, revenue sources altering.

In most instances you will get an initial signal of disruption on the horizon, then its up to you to adjust and recalibrate your actions and/or business model. Remaining stagnant is not an option.

But you can also get sideswiped and perhaps in a totally unexpected fashion, with varying negative results.

Canada is in the ideal position of being sideswiped in the near future by economic forces, or just a tweet. Yes...you want to reflect on this for at least a moment.

Auto Business:

We make auto parts and components, as well as assemble vehicles in Canada. Been doing it for decades, its always worked, although there have been pressures to perhaps make components, assemble vehicles elsewhere for less money.

We have had record auto sales for the past few years.

What happens when you start applying additional fees on the components and assembled vehicles? What decisions will be made? What will be the impact? Who wins and who loses?

The old Auto Pact was simple if Canada shipped $1.00 to the US it had to import $1.00 from the US, and July was the month to balance the books. Today NAFTA is a free for all with stuff coming from all over the place.

Perhaps nothing will change...but there is a cloud...the auto business just got sideswiped.

Lets not forget that the Canadian dollar at 75 cents is still not cheap enough.

Economy:

How often are you still hearing "The Great Recession" which in reality never happened in Canada. We experienced a slowdown but certainly not a major upheavel. In the meantime many Canadian companies made money and conveniently sat on the money. The premise was the great recession, uncertainty, and whatever other flavor of the day. In the meantime lets leave the money in the bank, lets sit on it.

Lets drop the interest rates to stimulate the economy, lets piss away the value of the Canadian dollar to encourage exports, and with time something will come our way.

As we roll into a time of "I'm going to get my shit together and I really don't give a fuck about anyone else". Do you think that Canada is getting sideswiped?

Citizen Main Street:

CMS is the only bright spot. Cheap money, low Canadian dollar, solid Canadian banks, a ton of money available. "Lets buy real estate, lets buy vehicles, lets take care of ourselves while keeping the economy rolling".

Who is going to buy all these houses at "ridiculous" prices, who is going to buy a record number of vehicles. Who else...CMS.

It worked so well that it scared the piss out of a ton of folks, and construction developed into the biggest Canadian industry. Not oil, not manufacturing, construction powered by CMS.

Will CMS get sideswiped? NO  Can CMS be more mindful with money? YES

 

 

Wednesday
Jan182017

Middle of January 2017

Yes its mid week and a few days past mid month.

We start the year, we want to get a "feel" for what is going on around us, we take a look at our plans, direction, and really take it all in to improve the understanding.

What caught our attention...in no particular order.

Eyeballs:

Unreal how everyone is scrambling for eyeballs to monetize whatever they are doing. Obvious some are even bolder than the bold.

Autonomous Vehicles:

Although its all moving in the direction of AV's we are not there yet, its progressing, a ton of folks are learning, and technology is being calibrated. Is there an upside for Canada?

People:

If you are in the auto business, you are in the people business...its that simple. Been like that for decades. Even with all the technology, all the empowerment...still in the people business.

Politics:

Its a great arena for a bunch of folks to try and get more eyeballs for their platform. In 2017 disruption is a huge eyeball attractor (is there such a word). Lets leave it at that.

Glass Palaces:

The retail auto landscape in Canada in reaching "peak glass palace" (which is often the price of entry) you have to wonder what's up next...the glassier palace on top of the glass palace?

Finance Terms:

"You can finance them for longer because they last longer". In 2017 the naivete of the statement is mind boggling, and completely detached from the reality in Canada.

Peak Technology:

Ask yourself "Are we reaching or have we reached peak technology in the auto business in Canada?" At some point its all pedestrian technology that anyone can access.

Motorcycles:

Boomers powered a generation of V Twin cruisers. Now the industry is still seeking a footing with younger generations. Is it a sport bike, is it a cruiser? One thing is certain it has to be less money. Victory shut down, MV Agusta is still challenged.

Utilities:

They are versatile, more profitable for manufacturers, and fashionable (life style vehicles). Are dealers making money with utilities?

Pick Ups:

The old school full size body on frame car, reincarnated as a pick up, and add a transfer case for good measure. By now we all know that an F150 is aluminum.

Real Estate:

Will keep on inching up especially in the GTA. The next few months will be revealing.

Interest Rates:

That they inch up by 25 points, manufacturers will continue to subsidise lower rates. Its not a big deal.

Used Vehicle Values:

We have been fortunate in Canada to move a ton of used iron to the US in the past. Will it continue? Probably but at lower prices. Values will come down in 2017.

Auto Shows:

Its not the reveals (eye candy), its the attendance by CMS (Citizen Main Street) that makes the difference, and moves iron.

Millennials - Gen Y:

Are increasingly becoming a factor in the Canadian auto business.

Disruption:

Ongoing in 2017, its a time when a "tweet" can quickly get folks do a 180.

Individual in the Back of the Room:

Might as well coin another one IBOR (individual in the back of the room), the person that observes the pedestrian knowledge and behavior to gain an advantage. You want to be an IBOR in 2017.

Time:

The equaliser, its the same for everyone, a precious resource that is constantly accelerating with increasing velocity. Successful individuals start their day early...very early.

We suggest that you make your own list of some of the stuff that has caught your attention so far this month.

 

 

Monday
Apr182016

Canadian Sales - First Quarter 2016

Our thoughts on Canadian sales for the first quarter.