What Dealers can learn from JFK?

As well as fishing in Italy is miserably in bankruptcy due to a wrong management of the sea – which allowed exploitation of resources beyond the limit – so now someone would like to follow the same exploitation of the “vast automotive’s sea” by continuing to preserve entire species of fishermen thanks to artifices such as bonus, contributions and Government incentives.

The problem is different: there are too many “fishermen” who continued – through the Government contributions – to accelerate and anticipate the purchase of cars in the Italian families. But now we got to the fishing ban enforced by the current economic situation and market saturation.

F1 ENG - No dealers

Result: there are many “fishermen” who will change jobs and sea …

JFK said: “ask not what your country can do for you, ask what you can do for your country.”  It’s easier for the Dealers to ask money to the Government, rather than roll up the sleeves in search of that excellence, and those earnest of that innovation processes that are lacking in the current automotive distribution… that is working exactly as if we were still in the 60s.

Cars, such as trucks, are sold by persons to other people. But many dealers and some carmakers are still convinced that the cars are sold through a rebate, a discount, the color of a floor, or thanks to the design of a ceiling lamp designed by architects!

F2 ENG No dealer-bis

The right formula could be… no more dealers? The novelty moves forward: sustainable mobility, the electric car, the car with compressed air, some manufacturers of truck and tractor… no longer provides the figure of the dealers in their new plans!

Tesla Sold Out! The innovative Californian manufacturer, now allied with Wells Fargo, has successfully tested the solution “NO Dealers” and with its 40 branches around the world – along with an advanced Web Policy and an effective CRM – has built a indissoluble “fil rouge” with the Tesla customers community and coddles every client, offering services, funding, assistance, advise totally customized 1-2-1!

With exceptional results: recently the new Model S, was launched and has sold more than 12,000 cars (from $ 49,900), without the intervention of any dealer or salesman… !

F3-ENG NO dealer

The global giant Tata Motors with his partner MDI, in recent days have announced the commercialization of Airpod, the compressed air car that promises to cover 100 km with 1 US $ in fuel. Introduced at the Geneva Motor Show in 2009, after a trial of more than 5 years is now ready with her sisters AirOne and AirCity: real car with 25 kW (about 34 hp) and 130 km/h top speed.

No Dealers! The Tata-MDI distribution network will be composed only of small delocalized manufacturing plants, that in addition to producing it, will sell it. With huge benefits: no more costs for logistics and distribution. Usually the carmaker produces in one place and then send the automobiles all over the world. In the AirCar family the producer sells directly: no commissions to the dealer because it is the same factory that sells the car, and this lowers the cost dramatically.

A concept borrowed from IKEA.

F4-ENG NO dealer

In India Mahindra sells REVAthe world’s best selling electric car (more than 2,000 sales in Europe and in Asia more than 3,000) – on line. And also the competitor Bajaj quits thousands of dealers selling with the Web a good part of the 17.000.000 of motorcycles that they produce!

All this while the Italian and European automotive gerontocracy continues unabated with the same policy without innovation, offering always the same faces!

Anti-politics movements and Occupy Wall Street are growing up… what will happen to the conservative and male-chauvinists car dealers?

Another quote from JFK was: “Change is the law of life. And those who look only to the past or present are certain to miss the future”.

Maurizio Sala

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  1. Dean Talley says:

    You can remove the Dealerships from the supply chain but you’re assumption is wrong. Manufacturers in the United States have tried this in specific markets. Market share was lost. The 19,000 franchised dealers in the United States are incubators for the American Entrepreneurial sprit. You can dilute that 2 50 manufacturers with 500 MBA’s but the dealership is one of the last frontiers for growing concepts in strategies for sales.

  2. Maurizio Sala says:

    @ Dean! Thanks for the time you took to read this article and thanks for your precious contribution!

    YES: I agree with you, the dealers are entrepreneurs on-the-field and only they know the customers in a territory!

    Beside this, even if in the last years some manufacturers take over and managed dealerships in difficulty in order to patrol strategic areas.

    I do not think this is the solution: dealers and manufacturers have different goals and different tasks!

    Also in the Trucks… sales environment! https://www.automotivespace.it/eng/the-car-dealers-are-sick-what-about-those-of-trucks/

  3. Maurizio Sala says:

    A friend of mine, George, from L.A. – US, wrote:

    “Hello Maurizio. Again, I can’t stress enough how much it pains me to hear about troubles on the Italian auto retail market.

    I don’t foresee Ford or GM or Toyota etc. taking over the retail side of the business in the near future. One of the reasons why Tesla is selling cars on their own is perhaps prohibitive investment for any dealer to set up a showroom for what is still a very limited product.

    Maybe 12.000 units sounds impressive but there are many dealers in the US that sell that many cars per year individually. In order for dealer to justify high investment there should be a potential in public demand. With Tesla being a new brand, this would require quite a stimulation of public knowledge/demand. Translate that into huge $$$. So for now Tesla is striking out on its own. I believe that if and when the Tesla brand takes off, the retail will be handed over to franchised dealers.

    That is not to say that the sales approach in the US did not change. In the past, people employed in the auto retail industry considered themselves as professionals and with good skills and techniques were able to earn a commesurative salary. This has all changed, as the manufacturers shifted the profit from the “front” to dealers’ pockets in terms of incentives, CSI monies, facility support monies, etc. All this means is that the sales people have had the “profit” rug taken out from under them.

    One of the biggest complaints that you hear from GM’s and Dealer Principals is the lack of a professional sales forces. However, no one seems to ask themselves a question: “What sort of professional is willing to work 50 to 60 hrs a week to barely earn $5000 monthly?”

    In my days, if BMW and Porsche sales person made less than $8-$10 thousand monthly, they were viewed as weak and incompetent. Today, this salary level is considered a success story.

    To summarize, I do agree that there’s a demise of the automotive sales professional”.

    Thanks George… interesting poin of view!

    Other comments?

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