Insights from South Africa

All we seem to hear lately are moans and groans (not saying they’re not warranted), so it’s refreshing to read thoughtful positive comments on things we can do in the auto industry to move forward.

Brand Pretorius, CEO of McCarthy Ltd., South Africa’s leading automotive group, recently spoke at Automechanika South Africa and shared insights that are surely applicable in emerging markets around the world.

General issues Pretorius thinks should be addressed:

• Dealer network rationalization, to ensure competitiveness of dealerships
• Better business terms between manufacturers, importers and local dealers
• Margin restoration on new/used vehicles, and parts and service

And more importantly in my view, some direct suggestions on what dealers need to do to survive today and, in the longer term, prosper:

• More efficient processes and operating systems
• Aggressive cost-cutting measures
• An improvement in staff productivity
• More focus on supplementary income from finance and insurance
• Increase level of customer retention
• Increase level of after-sales contributions

This ties directly into some recent posts on what auto dealers can do in times of crises, where the focus is on how process improvements paired with a good DMS (not necessarily ours can help a dealer move ahead.

Tags: Brand Pretorius, McCarthy Ltd, Automechanika South Africa, Automechanika, automotive, auto industry, automotive industry, DMS, Autologica

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Most dependable cars: Buick and Jaguar

J.D. Power’s Vehicle Dependability Study says that these are the highest ranked for 2008.

1. Buick and Jaguar (122 problems per 100 vehicles)
2. Lexus (126)
3. Toyota (129)
4. Mercury (134)
5. Infiniti (142)
6. Acura (146)
7. Lincoln (147)
8. Cadillac and Honda (148)
9. Porsche (150)
10. Audi and Ford (159)
11. Hyundai (161)
12. Subaru (162)
13. Chrysler (165)
14. BMW (166)

The industry average for problems per 100 vehicles is 170. Subaru had the lowest score at 263.

Notable sub-par results: Mercedes Benz (184), Volvo (186), Hummer (221) and VW (260).

Tags: Buick, Jaguar, Lexus, Toyota, Mercury, Infiniti, Acura, Lincoln, Cadillac, Honda, Porsche, Audi, Ford, Hyundai, Subaru, Chrysler, BMW, automotive, auto industry, automotive industry, J.D. Power

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Top auto brand images

The winners of Kelley Blue Book’s 2009 Brand Image awards have been announced:

• Best Value Brand: Toyota
• Coolest Brand: BMW
• Most Family Friendly Brand: Toyota
• Most Rugged Truck Brand: Ford
• Best Performance Brand: BMW
• Best Comfort Brand: Cadillac
• Best Exterior Design Brand — Luxury: BMW
• Best Exterior Design Brand — Non-Luxury: Nissan
• Best Interior Design Brand: Cadillac
• Best Prestige Brand: Mercedes-Benz

Jack R. Nerad, executive editorial director for Kelley Blue Book and kbb.com had this to say, as reported by the Detroit Free Press:

"The winners of this year’s Brand Image Awards exemplify automotive brands that are on the right track, making a great impression with consumers not just on a specific model level, but across the entire brand lineup."

Tags: Toyota, BMW, Ford, Cadillac, Nissan, Mercedes Benz, Kelley Blue Book, brand image, automotive, auto industry, automotive industry

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What can auto dealers do during world crises? (Part 1)

The global financial crisis is severely affecting the automotive industry. No news there. But in difficult times it is vital to center efforts on three main imperatives:

• Focus on current customers

• Mind costs

• Improve productivity and efficiency

We can driill down and translate this into 5 five specific objectives:

1. Retain customers

2. Purchase parts intelligently

3. Detect unsold parts and vehicles

4. Increase service efficiency

5. Evaluate the dealership performance in detail

A good DMS (Dealer Manager System) is key to providing the dealer with specific and vital information in order to work on these targets.

Here is a list of reports a good DMS should provide to help you in this process.

Target 1: Retain customers

Benefits for the dealer:

• Retain customers

• New sales to current customers

DMS Report that can help:  Customer Segmentation

In times of crisis it’s hard to gain new customers, so it becomes essential to retain your current ones.

If we can achieve a lasting relationship with all of our customers, it will be easier to sell to them again in the future, and much more difficult to lose them.

This will also result in cost reductions since you will require less marketing effort and can achieve a shorter sales cycle.

A good DMS, through its CRM tool, should provide a thorough report of current customers in order to obtain a detailed profile for each, detecting their tastes and needs. It is important to be able to segment customers and create focused marketing campaigns for each segment. A good DMS also lets you generate contacts, send e-mails automatically and follow-up until the sales cycle completes.

DMS Report that can help: Sales Trends

Your DMS should offer a report which lets you evaluate customer sales period by period (monthly, bi-monthly, quarterly, yearly).

You´ll be able to see purchase habits and frequency, and can estimate the best time to contact your customers and offer them special promotions or discounts so as to motivate them towards a purchase.

To be continued…

Tags: automotive, auto industry, automotive industry, DMS, dealer management systems, auto dealer software

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Cash-for-clunkers working in Germany

If you scrap your car in Germany, the government will give you $3,200 towards the purchase of a new vehicle.

The conditions: the buyer must get rid of a car that is at least 9 years old, and must buy a car that meets emissions standards.

So far the plan has been a huge success: sales of small cars are up by two to three times versus last year, according to dealers; 134,000 people have applied for trade-in checks, and that number is growing by 7,000 daily.

A similar plan has been in the works in the U.S. but is currently bogged down in discussions between automakers and lawmakers. The WSJ says:

"…  Detroit Three executives haven’t signed off on a plan, in part because they worry that the plan would encourage people to replace their older, American-made cars and trucks with new vehicles made by overseas-based rivals."

Texas already has a successful program in place called the "Drive a Clean Machine" program, that gives owners of ten-year old gas-powered cars $3,500 toward the purchase of a late-model vehicle. The program replaced almost 14,000 vehicles in 2008.

The cash-for-clunkers trend is now spreading to France, Italy, Spain and Eastern Europe.

Tags: automotive, auto industry, automotive industry, used cars, cash for clunkers, cash-for-clunkers, Drive a Clean Machine

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