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Entries in Auto Dealers (4)


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.



Global Auto Executive Survey 2016

The annual KPMG survey, an informative read, share with your friends.




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.




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.