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Entries in Sales (2)

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?

 

Friday
Sep092016

Vroom Room

Good Morning,

Its Friday, its the Vroom Room, make yourself comfortable enjoy the cappuccino and biscotti, join the conversation, invite your friends.

Have you noticed that when sales are down every manufacturer has a myriad of reasons and positive points (spins) as to why the sales are down, and the various upsides. Reminds you of..."Torture the data until it shows what we want to say".

In the meantime August is a middle of the summer, middle of the quarter month, a "lets hold back on incentives month".

The ongoing shift from sedans to utilities/trucks is impacting every manufacturer.

Sometimes you have to wonder "where the heads are at?". We see a manufacturer looking for an individual to fill a function for one of their aspiring nameplates. You go through the job description which is all encompassing. This manufacturer is seeking an individual with extensive experience, while using all the appropriate buzzwords and acronyms.

In the meantime the job title is "specialist" (obvious that a specialist earns less money than a manager) you can see where this is going.Then you wonder why that particular brand struggles in Canada.

If you have a motorcycle, hopefully you found the time to go for a few bike rides, especially now that its a little cooler. Its still a liberating experience to go for a bike ride.

We just experienced one of those idiotic shifter with additional buttons that are completely counter intuitive, make you wonder "what were they thinking" and are potentially dangerous. You have to wonder why manufacturers insist on designing such a shifter for any vehicle.

The same vehicle with the idiotic shifter has a gas gauge not showing on which side the filler door is located. Go figure...but it all makes sense, to somebody.

The usual old race cars from the Monterey Motorsports Pre Reunion 2016.