Interview to Marco Saltalamacchia

Interview Date: March, 14th 2012.

Professional Profile: Marco Saltalamacchia

Remarks: Interview carried by  Pietro Montagna


I have asked Mr. Marco SALTALAMACCHIA (former Senior Vice President of BMW Sales & CEO of BMW Italy SpA) some thoughts about the future of our sector.
Good Morning Mr. Saltalamacchia, the current crisis of the European Automotive Market triggered a huge brainstorming of ideas and possible solutions. From your experience do you think it would be feasible to think about a distribution without dealers? Do you foresee a direct web selling, or either un-experimented channels?
No. The current distribution system cannot afford to be without dealers, due to financial reasons too. Huge investments and Fixed Costs are characterizing mass production and determine break-even volumes to stop lower production quantities.

By the time this amount of vehicles cannot be directly adsorbed by the market, it generates the need that dealer become the first “Customer” of the OEM. Dealer are substantially the financial “buffer” of the automotive production.

Is this a sort of dog chasing its tail? Is there any way out from this current scenario, how do you perceive the future of this area?
Automotive is one of the last “Labour intensive” industrial sectors. The employment dimension of the industry is so much that policy always privilege the occupational levels maintenance, to the scouting of the efficiency.

The recent crisis showed as half world governances have prioritized to save enterprises rather than concentrating on the “natural” inefficiency consequences (i.e. Obama over U.S. with Chrysler and GM, Merkel over Germany with Opel). This kind of system will last until policy and governments with their direct interventions will support. However it is clear everything will be imploding at some point. Meanwhile, dealer will be financially less capable to support purchasing volumes that are not able to sell to the end-user.
This will only allow financially strong dealer to survive and, having more bargaining power, they will be able to have a say dictating new automotive distribution rules.

Until that time I do not personally see any alternative way out. In the automotive it could happen the same as it passed within the typing-machine producers. The strong resistance to change caused their disappearing with the consequent creation of unknown realities (i.e. PC manufacturing).

Open doors to Renault” has remarked the beginning of dealer to be open on Saturday and Sunday. From that time, Berlin’s Wall has been destroyed, the Iron Curtain not longer exist, do you think an “Open Doors” still make sense yet? World changed while is the commercial approach the same?
My answer is directly linked to my previous one. How can the distribution invest on different commercial policies, initiate a more customer care pathway, if resources (scarce) are all intent to repay the industrial investments? I’ll bring an example about a market affected by less “drugged” dynamics: the domestic appliances industry where the equilibrium between production and distribution led into an energy optimization and a product price decrease.
Mentioning one of my article published on this blog site (ndr, this article), I reiterate the following remark: “Using the historical prices index from 1960 to today (ndr, 2011), the price of a fridge is estimated of falling of 35%, while the one of a car rising of 777%!

If you prefer to utilize another index, the average salary of an operator in 1960 was around 47,000 Lira (ndr, 24.27 EUR); in 2010 it was around 1,000 EUR. Thus we could say in 1960, 4.3 working months were required to purchase a fridge while 8.4 for a car. Today only 15 days are required to buy a new fridge while the ratio for a car is almost the same as it was”.

I have a question: you stress the concept of missing “Cash Flow” in the sector to invest on collateral aspects, but important, of the distribution. Is this justified by not investing enough on the Human Factor?
Today there is a substantial uniformity of products at 360°. It is not a news that some models, apparently different, step out from the same factory and/or distribution chain. And the future is going towards this direction in order to cut industrial costs.

You should also consider that the point of contact among OEM and customer, dealer or garage, is based on a standard uniformity without containing some differentiation characteristics. The only factor that differentiate a structure is the Human aspect and just the one who invest on that, it will be surviving the natural selection of the market. Obviously the above mentioned obstacles, sensibly slow down the progress to a more liberalized distribution model.

What is stopping OEM to target GPL/Methane in a more pushy way (even without incentives), considering this is an already acquired technology, while fully aiming to develop the electric?
This topic is not unique. There are Countries that hold natural Gas resources, or either alternative/ecologic fuels, that could ease such topic. Not less influent is the presence, or future presence, of such fuels distribution. In my opinion, the comparison with the electric is too early.

Today, a real electric car does not exist yet.

The examples we see are vehicles created for endothermic and re-adapted to be hybrids. When, in the next coming years, battery costs will dramatically drop, making electric vehicles commercially competitive, there will not be any more confrontations in terms of ecological sustainability, ordinary/extra-ordinary maintenance, end residual value.
At that time there will not be any GPL or Methane that could afford to compete against an electric vehicle.

(Translated by Matteo Ceronetti)


Share this:

Related Posts

One Comment

  1. Ricardo Oliveira says:

    Very interesting interview.

    Just a comment: if automotive is so interested in absorbing industrial costs, why does it accept so much inefficiencies in the way it sells cars to the end Customer? In spite of a tough sales downturn in certain European countries we still find many sales opportunities being wasted. Everyday.

Leave a Comment

Get an alert when there are new comments. Or subscribe without comment.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More in BMW, Car, Chrysler, Dealer Development, Electric Cars, GM, Mini, Opel, The Interviews
British Renaissance

UK wants to improve its position in terms of produced cars; land of conquest ? British renaissance!

March 2012
Global cars sales outlook – March 2012

After Global Automotive Industry - feb 2012, this is a new forecast with the March data. Global cars sales outlook...

Interview to Daniele Maver, President of Jaguar and Land Rover Italy.

Interview with Daniel Maver, President of Jaguar and Land Rover of Italy in February 2012