For the first time since the early 1930s, General Motors can no longer lay claim to the title, “world’s largest automaker.” Indeed, GM’s sales fell behind Toyota last year, with The General selling 8.35 million vehicles versus Toyota’s 8.97 million (or about 620,000 fewer cars and trucks.) Meanwhile, GM’s 2008 sales were down 11% from 2007. And one need only scan the headlines to determine things aren’t exactly rosy over at Ford and Chrysler.
One day, someone will sit down and pen the definitive history of the North American auto industry. It will be available at the local bookstore and filed under “T” for tragedy. The tome will document how complacent auto industry executives were unwilling or unable to respond to profound changes, ranging from new competitors to various oil crises. The book will also document how insatiably greedy unionized autoworkers could care less about the wellbeing of their employers in their never-ending quest for higher wages and unsustainable benefit plans. This combination of ignorance and arrogance proved toxic.
Indeed, it’s hard to believe that several decades ago, GM’s North American marketshare was greater than 50%; today, the Detroit Three have less than 50% marketshare combined. Romeo and Juliet has nothing over this tragedy.
What does the automotive new world order mean for Canada’s independent auto shops? Well, for starters, now would be a prudent time to overhaul your business plan and refocus your marketing tactics.
Just look at the numbers. Our recent readership study revealed that 88.5% of shops surveyed said North American nameplates accounted for the majority of their work. That would suggest there is a huge chunk of European and Asian vehicles being serviced by dealers. And since the marketshare of North American vehicles continues to erode while the marketshare of foreign nameplates continues to increase… well, you connect the dots.
The task at hand: you need to attract more maintenance and repair work from Asian and European makes. And it can be done. Case in point: Rob Scott, owner of Glenwood Auto Service in Saskatoon. Six years ago, foreign nameplates represented about 18% of his business; today, this figure stands at 35%. This didn’t just happen magically overnight. Rather, Scott communicated with his customers, informing them his shop welcomes foreign makes.
To pound home this message, Scott purchased two 2007 Honda Civic Hybrids. These whiz-bang Civics, festooned with Glenwood’s logo, serve two purposes: to transport customers and to convey the message that Glenwood can adroitly take care of high-tech imports.
Scott also opened a detailing bay. While this component of his business was a money-loser for the first five years, it nevertheless served a marketing purpose: “We could tell the owner of a late-model Lexus that he didn’t have to take his car to the dealership for maintenance work – we could do it all right here for him,” he says, noting that the owner of a high-end imported vehicle is a likely candidate to take advantage of detailing services.
Scott also notes his technicians undergo about 200 hours of training per year to stay current. Such training is typically done during the day (when lessons can be better absorbed) as opposed to evenings and weekends.
Other initiatives to consider: direct mail campaigns and store signage emphasizing your shop specializes in foreign nameplates. As well, ask your current customers for referrals. (Phrase it along the lines of, “You know, I really enjoy our relationship – I want another one of you.”)
Happy hunting.
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