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Entries in Auto Sales (23)


Vroom Room

Good Morning,

Its Friday, its the Vroom Room, enjoy the cappuccino and biscotti, join the conversation.

On the cusp of the long week end, the end of the Dog Days of Summer, and an immersion into reality.

Concluding a busy summer, you have to ask yourself if you want to be part of all the "conversations" or you would rather be spared, or spare yourself from some the of "conversations" that are unproductive from your perspective. have to be your own editor, and your own conversation filter.

From the Strada vault...Bespoke Vehicles when dealers ordered vehicles by option, not packages that simply raise the price. Today you want this on a vehicle, you have to buy another 4 of something else, and obvious for dramatically more money than just the option you want.

Canadian Sales:

With the gyrations of the financial markets, accompanied by dire talk on the Canadian economy. Vehicle sales continue to set records. The power of new products, demand for trucks, and free flowing money. Its really the power of CMS (Citizen Main Street)...think about it.

From a few months back...The Transparency Spin, as you get back to reality be aware of the various spins that are applied to usually influence the transparency.

When the yogurt hits the fan...

Its interesting to observe human nature when some unpleasant stuff hits the fan, as much as there is all sorts of tehcnology to permit a ton of activities. The typical human response is timeless...head for cover, look out for number 1, seek out a level of security...guess somethings will never change.

Since there was no Bonneville Speed Week this year, a photo gallery from a few years ago.

Have a wonderful long week end with your family and friends.




Vroom Room

Good Morning,

HorsesIts Friday, its the Dog Days of Summer, its the Vroom Room. Enjoy the cappuccino and biscotti join the conversation, leave a comment.

You have to wonder if the Canadian economy is really "tanking" as the mainstream media would like us to believe. In the meantime our dollar persists on a downward spiral.

Did we forget all the media noise about China and the debt in Greece?

You know the saying...we always learn something new. It was informative last week to drive on the 401 with a conventional cruise control, and compare it to our drive with an adaptive cruise control. If you missed it just scroll down.

Don't you love it, reading that there is a pondering here, a mulling there, a possible somewhere else, and so on and on. have to be your own editor.

Canadian Sales:

A record breaking first half of the year...what else can you say...spectacular, impressive. Are we destined to drive around in a "square" utility vehicle of one make or another? What do you think?

Behind the scenes at the Goodwood Festival of Speed...impressive photo gallery.





New Vehicle Sales

The other day we were reading a fascinating article on new vehicle sales tactics in the Globe and Mail. Almost as if its a novelty, and only 1 or 2 manufacturers are deploying the tactics.

If you have been in the auto business ate the retail level (dealers) for a few decades, the tactics of meeting monthly sales objectives are not new. Its been going on for decades...

What has changed is the appreciable bonuses that are now attached to meeting monthly sales targets.

Lets take a look at a few points in no particular order.

  • Meeting new vehicle sales objectives is an intrinsic part of the auto business, it will continue to be so for the foreseable future.
  • All manufacturers have one form or another of a bonus system attached to meeting monthly and yearly sales objectives; with a variety of imaginative names.
  • Agreed...some manufacturers have a variety of creative and imaginative tactics.
  • From the dealer perspective reporting a vehicle sold to the manufacturer generates a sale/delivery, and starts the warranty.
  • Reporting a vehicle sold does not require a sales contract, although it requires a customer name and address.
  • Nothing stops a dealer from increasing their demo or courtesy vehicle fleet.
  • Yes...on the dealer side there is a level of creativity as to when and why a vehicle is reported sold.
  • On a specific month the last sold vehicle to meet an objective can trigger an appreciable bonus for the dealer.
  • The last few days of the month usually involve a flurry of calls from the factory representative to various dealers seeking additional sales.
  • You can just imagine...yes let your imagination run as to the tenor of these conversations between the factory representative and dealers.
  • When mainstream media attempts to look into this aspect of the business they are trying to look "Behind Closed Doors" and always meet total discretion on the part of everyone.
  • The various sites that advise CMS (Citizen Main Street) about the various promotions and programs are never privy to the bonuses attached to sales objectives.
  • We all know that CMS waits towards month end to finalise purchase decisions...perhaps CMS has an intrinsic understanding on the possibility of having a better deal towards month end.

Its not new, been going on for decades in one form or another, and it will continue. Its an intrinsic par of the business.

In the auto business all the stakeholders play the game to WIN.



Vroom Room

Good Morning,

Its a new month, its Friday, its the Vroom Room, enjoy the cappuccino and biscotti, join the conversation.

Does climate change mean that we alternate from air conditioning, to heat, on a regular basis in the house? What do you think?

In case you missed it, we have done some vehicle reviews take a could you miss it.

You know that we don't follow, we lead, and we are not in the eyeball business either. Late last year we shared our thoughts on Premium Economy which was a continuation of The Merbimau Advantage. As you start hearing increased comments from a variety of individuals remember that you heard it here first.

In the world of business there is an ongoing constant, the population of Assholes does not diminish (perhaps its increasing). At times you have to wonder if the population would diminish, would we be in a better world. Agreed...its optimistic to say the least.

Canadian Sales for May:

Last year May was a record month, imagine trying to beat May 2014 this year. Its a done deal May 2015 is 1% ahead of 2014. As you can imagine with an increase of only 1% the month was a game of push and shove. With manufacturer bonuses based on sales objectives (usually surpassing them). There is a rumour that some manufacturers were calling dealers on an hourly basis on the last day.

Is there the possibility that some vehicles were called sold, and are still waiting for an owner? What do you think?

Still a huge accomplishment for the month...yes those guys again MerbimAu were way ahead of the game last month...

You will increasingly start reading and hearing about infotainment overload in vehicles. Where some or a lot of the technology in the centre of the dash (yes the screen) is not being used by customers. Do we still need a CD player in vehicles? Do we need voice recognition? Do we need a myriad of touch functionalities on the screen? What do you think?

Our usual old race cars impressive and extensive photo gallery of the Spa Classic 2015.




Canadian Sales - April 2015

An amazing month, the best April in recent history.

By now all manufacturers know the routine and increase the level of advertising during the second part of the month. April merely followed along...

The environment:

Gas is not that cheap.

The Canadian dollar no longer buys as much,

Money remains inexpensive and free flowing.

What caught our attention:

  • GM decided to move iron in April and displace FCA for the month.
  • We continue to scratch our heads with Ford.
  • Lexus gaining additional momentum with the NX
  • Is it fair to say Porsche powered by Macan?
  • The Micra continues to make a difference for Nissan. 
  • MerBimAu as usual showing continued increases.
  • The endless migration towards SUV/CUV increases and endures.

One more thing:

Its very competitive and CMS (Citizen Main Street) is the big winner.





Making Car Buying Less Loathsome

If you are in the auto business perhaps its not new, but its a must read.

If you are considering purchasing a vehicle, its a must read.

We urge you to take the time and/or bookmark the page.






March Sales Update

Weekly payment amounts.Its mid month March, lets take a look at the auto sales front.

Since last week most if not all manufacturers are offering one deal or incentive piled up on top of another and it all ends on March 31, 2015. Every incentive promotion has a "marketing name" to heighten the awereness.

The end of the first quarter is only 2 weeks away, needless to mention that everyone is seeking to conquer sales along with everyone else.

Yes...the auto business is hyper competitive.

CMS (Citizen Main Street) is sitting back and watching this advertising frenzy in print, TV, radio, online.

Perhaps...getting confused by all the deals, promotions, incentives. Certainly conclcuding that its a case of dynamic pricing run amock.

Needles to mention that whoever had a strong start to 2015 is in a dramatically better position than the manufacturers seeking to conquer in the last 2 weeks of the month.

Before we forget, many dealers are piled up with new vehicle inventory, while others have vehicles temporarily stalled in snow at Autoport (Halifax).

Some indicators:

  • The "nothing down" deals are getting scarcer.
  • The loan terms are extending at a faster rate than last year.
  • The transaction price is higher than last year.

Although interest rates are marginally lower, the Canadian dollar is dramatically devalued (in the dumpster) compared to last year.

The manufacturers that waited till March to throttle up, are in a less favorable position that the one that did a "hole shot" in January.

Let's see what month end will bring.




The Ongoing Oil Conversation

You have surely noticed the various conversation, opinions, thoughts from a wide spectrum of pundits on the price of a barrel of oil, and gas at the pumps.

Lets take a look at this from a Canadian perspective:

Price of Oil:

Its not a good thing for Canada, cheap oil has more negative than positive implications for Canada. Alberta is the 3rd largest auto market after Ontario and Quebec. We all know where vehicle sales in Alberta are headed. 

Lower Canadian Dollar:

The lower Canadian dollar is a minor buffer for the lower price of oil. On par $100 US was $100 Canadian now $50 US is $57 Canadian (rounded amounts). At the same time the lower Canadian dollar is increasing prices of a myriad of items that a family requires, from food, clothes, even iTunes. 

Its possible that with the imminent closing of Target, other retailers will be very tempted to raise their prices to compensate for the lesser competition, and cheaper gas.

Savings at the Pump:

Agreed we are all saving at the pump, but CMS (Citizen Main Street) is astute to quickly grasp that the savings at the pump are required elsewhere with price increases from the lower Canadian dollar. Save at the pump and pay more everywhere else.

Utility Vehicles:

The auto market is inexorably shifting from sedans to utility vehicles, especially smaller versions. Is it the price of gas or a consumer preference? Its easy to correlate cheaper gas with increased sales of utility vehicles especially when the market is already headed in the direction of utility.

Pick Ups:

If pick up sales remain the same in 2015, we can says that cheaper gas perhaps was a motivator. At the same time how much of an influence is cheap gas on the enduring pick up love affair?


The oil sands and fracking in the US have disrupted the established order of oil. Target was a disrupter in Canada signaling its vector, strategy to the competition. The same with oil sands and fracking. The competition gets aggressive and disruptive in its own fashion. 

Finite Resource: 

There is not an infinite, endless supply of oil on the planet. Technology has enabled disruption. A fracking well has a life expectancy of 12 months. The oil sands have been there for both cases they make sense at a certain price level. In the meantime oil remains a finite resource...with over time an escalating price.

Who Wins?:

Not Canada, not the Canadian consumer, not Alberta, not the Canadian oil industry, not the Canadian auto industry. Canadian retailers will win further...developing economies will win.




December Canadian Sales

Usually December in Canada is a slower auto sales month since at some point everyone starts competing with Santa Claus.

This past December from the activity in online, radio, TV, print advertising one could sense that most if not all manufacturers were motivated to generate a strong month. Literally break from recent tradition, especially in light of several events, the price of oil being one.

December concludes 16% ahead of the previous year, the strongest December in the past 10 years with 131.4K units for the month.

Think of this...1.85 Million vehicles were never sold in Canada in any year.

From our perspective its gratifying to see all manufacturers throttle up, get hyper competitive. We had not seen such competitiveness in several years.

How do you power sales?

New Product: Its still the major part of the equation.

Incentives: They are a compelling motivator to finalise decisions.

Free Flowing Money: What can you say...2014 was a watershed year in money powering sales.

Pick Ups: The love affair continues, not the cheap gas, the enduring love affair with pick ups.

Chrysler and Ford were trading paint to who would finish as number 1 in Canada. December was the deciding month with Ford winning by a bumper.

The Koreans and Japanese have their ongoing scrap for market space.

When everyone gets competitive, the incentives are strong, the money flows, fascinating to see how much iron can be moved in Canada.

Its a beautiful thing...



Auto Loans

Have you noticed when the mainstream media catches on to "something" everyone has an opinion, several did a study, and suddenly we are close to hitting the alarm button.

This past week auto loans have captured the imagination of numerous pundits, with a myriad of pedestrian opinions.

Sometime time ago we shared our thoughts on the entire auto financial services in Canada with Money for the Deal.

The picture painted today by the mainstream media is that CMS (Citizen Main Street) is highly leveraged and if interest rates increase auto loans will default before mortgages. In addition to the longer loan terms extended on auto loans.

Lets consider a few points:

Cash Flow: In the glory days of leasing in Canada over 40% of new vehicles sold were leased, and afforded on cash flow. Extended term loans are the replacement of leasing enbling CMS to still drive with cash flow.

Consumer Risk: CMS is astutute in letting manufacturers with their incentive programs relieve them of the value risk of the vehicle they "own" by trading it in on a new vehicle.

36 Months: Remains the magic number for the auto industry to function at its best. The loan might be 96 months but the trade cycle remains 36.

Loan Interest Rate: The low rates down to 0% are supported by the manufacturer, its always a cash incentive of "xyz" or a rate of 0%. In most instances CMS picks the rate.

Lender Risk: Have you noticed...since major Canadian banks are more active with auto loans more vehicles are sold in Canada. Are manufacturers supporting a "risk factor"?

Big Data: Permits manufacturers and financial service providers to calibrate the monthly offers, incentives, to maximise sales.

Dynamic Pricing + Incentives: Manufacturers and financial service providers make extensive use of dynamic pricing and incentives to increase sales and capture new customers from competing makes. This strategy will endure.

Technology: Permits the dealer and CMS to quickly and efficiently close a deal on the basis of a "monthly payment".

Maintenance: CMS has a limited appetite for performing maintenance on a vehicle beyond replacing the wear items. Yes...maintenance can quickly devour several months of payments, in addition to being unpredictable at times.

Paradigm Shift: From vehicle ownership to vehicle usage for a monthly fee. If CMS is in a "trap" of monthly payments, manufacturers are in a "trap" of constantly enabling CMS to trade, and roll over deficiencies.