Photo Gallery
Powered by Squarespace

Entries in Auto Business (15)


Looking Slightly Over The Horizon

If you are in any business, you always "look ahead" in one fashion or another.

It might just be a case of "what's up with the immediate future?" are there any signposts that will provide some reference points.

There are all sorts of variables, everyone jumps on the digital wagon, pressures from all sides, customers increasingly demanding more, and lets not forget the legion of experts.

We could keep on going, but you surely grasp our direction.

Lets focus on the auto business in Canada. need to move iron for the business to flourish.

Yes again...2016 will be a record year for new vehicles, on top of a record 2015. While the signals during the past couple of months are cautionary.

Looking slightly over the horizon, 2017 is looming larger and larger.

Between digital here and there, all sorts of software, processes, experts, mobility, AV's you still have to look over the horizon and craft some sort of vision for 2017.

Better yet, which dots are you going to connect? The ones that everyone is talking about? The ones that you uncovered and no one is talking about? Agreed its easy to go with the flow and connect the same dots as everyone else.

A few points for your consideration...

  • The auto business is on a mission to increase variables, models, and complexity.
  • At the same time 20% of the models generate 80% of the sales.
  • As a dealer if you think that having a smooth, efficient process in your showroom, or service drive through is a key to have a problem.
  • As a customer, after doing all the online diligence for model XYZ, knowing the price, the incentives, researching the value of your trade in, e-mailing the dealer, setting an appointment...suddenly the metal does not have a problem.

Its a brave new "auto business" world looming on the horizon for 2017 in Canada.



Windows of Opportunity

In the auto business there have always been "windows of opportunity" in one fashion or another. Obvious that by the time a window of opportunity becomes "pedestrian knowledge" its already on the wrong side of the curve.

What is a window of opportunity? A window of opportunity is a short time period during which an otherwise unattainable opportunity exists. After the window of opportunity closes, the opportunity ceases to exist.

As you can appreciate empowered by technology, "windows" open and close with increased rapidity. Yes...some folks "get hung up to dry".

The value of the Canadian dollar has presented several windows of opporunity during the past decade. Let's consider 2016 and looking ahead for the short term.

Yes...we all know that the CDN dollar has tanked, visited the bottom of the dumpster for the past several months.

The tanking has created a unique window of opportunity for the auto business in Canada.


For CMS (Citizen Main street) the lower value is unique in generating robust used vehicle (trade in) values for numerous makes, and models. Stronger values have a direct impact on the level of negative equity. Need we say much more?


Its presented a unique opportunity to pay aggressive amounts for trade ins, to close deals. As well as managing used vehicle inventories. Could it be that its a factor in record Canadian new vehicle sales this year?


Have ramped up the inventories of new vehicles, applying pressure on dealers to move iron. While deploying selective "dynamic pricing".


Are enjoying a golden time selling a myriad of vehicles to "American" buyers.

Its all good for everybody...

But...and there is always a now its coming to an end.

If an additional 100,000+ used vehicle were exported from Canada to the US in the grand scheme of things it might be a drop in the bucket, especially for the US market. But it also made it easier to close deals in Canada, and manage inventories.

The bigger BUT...

The scarcity of used vehicles in the US is a thing of the past, they are not so scarce anymore. While its anticipated that values will continue on a downward slope from now till the end of the year.

From our perspective this "window of opportunity" is closing.

Is there a lesson...absolutely...don't get caught too far on the wrong side of a closing "window of opportunity".



Automotive Revolution Perspective Towards 2030

A thought provoking white paper by McKinsey on the auto business in 2030. Do you have an interest or are involved in the auto business...we believe its a must read.




Connecting Data 

Think of all the data/information/numbers that resides on a server or on a cloud somewhere. By now we all know there are gazillion bits and bites of data all over the place.

One thought vector in the auto business is to better connect all this data, to curate the data in a fashion that it generates improved results, is more productive.

If at first blush it seems like a daunting task...and it is. A system here, another there, this plugged into that, the other not compatible with this one. While everyone talks about their small sandbox and misses the opportunity of the big sandbox.

Then you have a pundit here, an expert there, this round table discussion, that invited guest. To make it even more interesting.

Invariably the Internet rears its head, the connected customer, Millennials, smart devices, and on and on to fill volumes, and a couple of clouds. The capture service for this, the syndication service for that, the boundaries to monetise this activity.

We are selling analytics short if we stop there. The data and methods embedded in analytical approaches offer more. They offer the ability to explore unexpected relationships that may not only solve the immediate puzzle and climb the top of a local hill, but also find unforeseen options. from MIT Sloan

If you are a customer your head is spinning one way, if you are a dealer its often spinning in a different direction. Reflect on this for a moment.





Used Cars...Really

There was or perhaps there still is a saying "If you want deeper insight into a dealer look at their used car department". Take a quick look at how any dealer runs/manages its used car department and comes to terms with the myriad of variables and software that is available in 2015.

The unique feature of the retail auto business is that dealers after 100 years are still "horse traders" and will continue to be horse traders for the foreseeable future.

The used car department is where a dealer washes out his deals.

Reflect on this for a moment, a dealer sells a vehicle, while taking another vehicle in trade as partial payment. At some point the dealer must convert the trade in (partial payment) back to money to recoup the full payment of the first vehicle.

The dealer must wash out his original deal to recoup all the money. After decades, generations, the auto business still assigns an "A" to the stock number of the first trade in, subsequently a "B" and so on. With all the technology some things never change.

Can I create a retail customer with this trade in?

Simple question that every dealer should ask for every trade in. Agreed...with the available technology, platforms, opinions, experts, the simple question becomes complex to answer.

Not only create a retail customer, but how fast.

The faster, the better, there is a partial payment tied up in this trade in.


Back in the day, reconditioning was the process of putting value back into a used vehicle to get more money for the vehicle, and have a satisfied retail customer.

Today with market prices, reconditioning walks a fine line. Is the customer seeking a competitive market price, or a correctly reconditioned vehicle with added value for a higher price.

Certified Pre Owned

In 2015 CPO is the equivalent of the correctly verified and reconditioned (putting value back) vehicles. In Canada CPO is a process that initiated a generation ago. Its not new.

If I don't want to create a retail customer with this trade in?

Certain vehicles that must be taken in trade do not fit the retail profile for a myriad of reasons. If you don't want to create a retail customer, then you must create a wholesale customer for the trade in to convert it back to money.

I tried to create a retail customer and it did not work?

Now the mind games start, even with all the technology the extent of the human mind games, by the various stakeholders is fascinating.

At this point and time its a retail fail.

Absorbing a loss...really?

To be a successful, competitive horse trader, entails being mature to take losses on vehicles. Where ever the loss originated.

Its usually where a ton of folks go into denial mode.

Stick to the plan...really?

The plan goes back generations, its the same plan, now empowered and facilitated by technology. immense really?

We all know or should know that technology compresses time. With all the technology that is available to operate and manage a used car department. Time is profoundly compressed, as well as offering a competitive advantage.



The Human Factor

When you spend decades in a business, remain passionate, and have an opportunity to view the business down to the ground, and from higher altitudes.

The auto business remains captivating, exciting, even after decades.

Way back in the day it was all human. There was no technology, it was all done by hand; powered by human intelligence, foibles, and even larceny at times.

Today its the complete opposite, its all technology, human intelligence is deployed to understand, and function within the confines of the technology. is great, can perform a myriad of detail work, free up time, empower the customer.

It should be easier, faster, seamless, frictionless to do deals in a showroom.

As Boomers move on, and Gen X'rs have been around for a while, the focus is on Millennials as the next wave of substantial customer base for the auto business.

Agreed...the cloud is bursting with a gazillion thoughts on technology, Millennials, social media, and whatever other thought vector is the flavor of the day.

Looking ahead to 2020, reflect on the following.


Have an innate understanding of Millennials. Yes...the parent of Millennials are Boomers. For some reason it gets lost in the dust, as if Millennials came about by themselves.


Evolved with technology from birth, they are digital natives. Their Boomer parents provided them with a myriad of technology devices, Internet access, WiFi, video games, and big screen TV's to name a few. In addition to vehicles.

They have been digitally empowered for decades. The Internet, features phones, smart phones, video games, flat screen TV's, PC's, laptops. Millennials have had a ton of hardware, and then a myriad of social platforms to network.

People to People:

As we are empowered, immersed, swamped by technology, we still do business "people to people" or we should be doing business on a personal basis to arrive at a higher level.




Humans vs Technology

With the increased advances of a myriad of technologies in the auto business, be it in the vehicles, at the dealer, and with the customer.

Its an absolute digital festival that is fascinating, encouraging, and perhaps a little dehumanising.

There is technology for this, an app for that, a visual for this other thing, an integration there, we could keep on surely get the overall picture.

Although on many levels its encouraging to witness, experience and live with the advances in technology, we remain humans. Yes...we are empowered, and compete with technology. Usually being aware of the empowerment, while overlooking the compete aspect.

In the auto business we all experienced a learning curve, from robots in assembly lines, CAD to engineer a vehicle, DMS at the dealer level, to smart devices in the hands of customers. We usually focus on the technology, how to use this, how to operate that, how to develop and "xyz" strategy for this other thing.

When you think about it, its a snippet here, a morsel there, a couple of lines somewhere else. Its easy to understand or supposed to be, its easy to sell, and for some easy to monetise.

Its a process here, another there, and aided by technology the processes are supposed to be consistent, repeatable, measurable. If you are in the auto business at the retail level, reflect on this for a moment. You have a myriad of technology and processes from the showroom, to the service and parts department, to the accounting department, to the BDC (business development center) and so on.

While the prospect / customer is also loaded with the technology.

Its not all seamless, or easy.

In the showroom there is a higher level of friction...

What do you think?




Dealer Management System

If you are in the auto business especially at the retail level you know that DMS (dealer management system) gets bandied around on an ongoing basis by a myriad of individuals.

Lets put some perspective on the DMS.

> Perhaps you remember when the financial statement was done by hand in the dealer accounting department, which usually comprised of several individuals performing a ton of manual entries.

> A couple of generations ago, GM initiated the task of showing dealers how to manage the "numbers" of their dealership. Back then a GM franchise was a license to print money, managing the money and profits was a huge challenge.

> Dealers were owned by an individual, who owned 1 dealership. It was frowned up by manufacturers to own more than 1 dealer, and especially to own another franchise from a different manufacturer.

> As you can imagine the advent of a "machine" that could manage the parts department, close work orders, manage vehicle inventories, and generate a financial statement was an appreciable productivity benefit to all dealers. Obvious the providers of these machines had an interesting business model to make money.

> Needless to mention that manufacturers with their in house financial service companies were doing an appreciable amount of business with all their dealers. Be it financing inventories, as well as retail sales. Yes...manufacturers to this day want a monthly financial statement from every dealer.

> Astute individuals by looking at a financial statement can understand what is going on at a dealer, especially with benchmark composites to facilitate comparisons.

> Since you need a ton of money to be in the auto business, the short term focus is always on "working capital"...manufacturers want to be certain that dealers have enough cash to operate their business in a successful fashion.

In 2015 at times we tend to forget that the DMS remains a "machine" that collates all the numbers in the correct columns to generate an operational financial statement at the end of the month.

Its astounding to see the use of a myriad of acronyms by certain individuals on the premise that the more acronyms you know, the more you understand the business, and presumably the DMS (its only a machine).

Way back in the day, GM was showing dealers to understand what they did to have such a number appear in such a column. Not to understand how many clerks performed operations to insert the numbers in the lines and columns.

The DMS is the machine that assembles the figures, while the human tweaking is done with journal entries. Often the folks that know all the acronyms, conveniently overlook the human side.

All the other "stuff" that integrates to the DMS is another story in and of itself for another time.




Customer Experience

Informative and thought provoking video from Maritz CX




Digital Transformation in Auto Retail

Thought provoking presentation from Capgemini ...especially for auto dealers.