Italian Market, August 2011: of the 70.307 total vehicles registered, more than 42% (29.929) have been matriculated during the last… 3 days of the month. From January 1st more than the 35% of the italian total registrations were developed in the last 72 hours of each month!
Let us understand this strange phenomenon. Some manufacturers contacted to give an explanation for this strange phenomenon, they bring it back to the dynamics of Lean Production, to the just-in-time production, or to the dilated time into the logistics pipeline that could prevent the optimal flow of cars from the factory to the dealerships.
Others argue that the monthly promotional campaigns and ‘open doors’, that are developed in the last Sunday of each month, produce sales peak just at the end of the month. Still others are certain that the bureaucracy of banks or the financial management of the certificates of conformity are the real cause of this anomaly. Who is on-the-field, the Area Managers of the EOM for example, argue that the dealers ‘hold back’ in the drawers contracts and orders with the intent to negotiate domesticated objectives from the Manufacturer and super-bonus of the last minute.
Perhaps this is partly true, but the opinion of analysts and dealers is another: the run-up to a more favorable market share generates, through actions of self-registration, this considerable surplus of registrations and plaques in the final 3 days every month!
Aggressive and effective sales campaign or pressure on the dealers? The Fiat dealers, for example, made more than 61% registrations in the last three days (8,919 of the total 14.648); the Alfa Romeo dealers in the last 72 hours of the month they developed 61% of the matriculations (1.235 Vs. 2.031). But even Ford, BMW, Citroen, Renault and Opel have a significant share of registrations (41%, 45%, 46%, 45% and 42%) only at the last minute. Merit of aggressive and effective campaign or pressure on the dealers? Both, probably.
In crisis time, statements ‘bipartisan’ of all the OEM and the NSC had hinted that it was ended the era of unjustified pressure on dealers: stop with unnecessary pressure on balance sheets, stop with fixed assets, that’s enough with new cars over-stocks! A ‘new deal’ would have launched new policies more transparent for the benefit of the whole distribution chain. As late in August 2011, however, is obviously someone was still entangled in ‘old habits’.
Is this policy to run-up to an higher market share is good or bad? Wherever in the world there is this ’3rd sales channel’ feeded with ‘pre-owned’, ‘Km zero’ and ‘one-day-cars’ (even in Agriculture the dealers have the ‘hours zero’… tractors registrations), but please, I expect transparency from Automotive Multinational Companies quoted at the Stock Exchange! How many are the real sales (the orders)?
How many sales to private owners that bring profit to dealers?
How many the registrations ‘masked’ with Km Zero? All of these huge investment of physical and economic resources are added to all those difficulties who – day-by-day – characterize the work of dealers. All this for a few thousand more registrations. It really worth while?
Someone points out that these “new-used” cars can be an opportunity for dealers. Maybe it is true, but this is not the norm: on the national newspaper “Corriere della Sera”, 20 July, an entire page-ads of a well-known Dealer Group that advertises bids on dozens of lots consisting of company cars and ‘Kilometer Zero’. Some of which registered 2 years ago!
Given that these cars (before they were registered) stopped outside the factory, then remained into the carrier deposit, then holded on in the stock locator of the NSC, then were stocked in a dusty ground of this dealership (where and still are stationed there, however well presented ), I have a question: how much they costed to the brand / dealer in terms of: interest expense, inventory costs, logistics, spoilage of tires and gaskets, petrol, transport from one location to another of the dealer, and not the last a spoil of image? What is the real value of these cars aged… but ‘new’? This is widespread. I personally visited some dealers that have lots of ‘Kilometri Zero’ that lie for at least 4 years.
Impacts on the Stock Exchange. It ‘also true that one minute after the automotive august data were presented – with nothing had changed in the economic policies of FGA or in the company’s ambitious development plans – the stock market reacted losing in few minutes the 2.51%. Only for the slight decline in market share…
I repeat that it would be better to insist with the ‘soft skills’ of salesmen with advanced training, sales processes and timely CRM projects; with a look to the unstoppable realities of the Social Media that still seems to be – in Italy, but also in other countries with few exceptions – virtually unknown in the automotive.
Share and Enjoy