Canadian auto dealer sat down with Tim Reuss, President & CEO of Mercedes-Benz Canada to find out more about his strategy for Canada in 2012 and beyond
Tim Reuss, President & CEO, Mercedes-Benz Canada.
New products like the smart fortwo electric drive and the smart e-bike are coming.
2011 was a very good year for Mercedes-Benz Canada, and it was a great time to be at the helm for new Canadian President & CEO Tim Reuss.
The company smashed several all-time sales records, posting its best year on record, with an increase of four per cent over 2010’s record-breaking sales, and claimed the crown of the number one position in the luxury passenger car market. 2012 has also started out strong with record sales on the books already for January and February.
With everything rolling along so well, Canadian auto dealer met with Tim Reuss at the company’s Toronto offices to discuss the company’s success, plans for 2012 and dealer relations. “It was a great year,” says Reuss. “The best year ever.”
Reuss took over from Marcus Breitschwerdt on April 1, 2011. Before taking over Canadian operations, Reuss headed the Mercedes-Benz corporate retail division in Rome, Italy, and has been with the company more than 24 years.
Strong dealer body
One key building block in the company’s success is its solid 52 member dealer network. (The company has plans to expand to 60 franchises by 2015.) Reuss says he made it his first priority to visit every dealership in the country when he first arrived.
“I don’t have the style that I walk in the front door and sit down with the owner in the meeting room. Most of the time I walked in through the backdoor, through the service area first.”
Reuss said he met with the service techs and parts advisors, and the spare parts warehouse workers and asked them how things were going. He said he always asked them: “What can we do better as MB Canada?”
“I like very much what I saw from the people at the dealerships,” says Reuss, saying they are highly-professional, trained and motivated for the brand. “I have also found that we have a very stable environment in which to do our business in Canada.”
Partners not adversaries
He says the feedback he received from dealers was positive, helping explain the company’s top marks in the 2011 CADA Dealer Satisfaction Index rankings. “Our dialogue with the dealers is extremely open, and really takes place as partners.”
Because MB Canada is also a big retailer with 14 stores in Canada, the people at headquarters are keenly aware of the issues dealers face. “That makes the dynamics of the discussions with dealers completely different than other brands might have,” says Reuss.
He says this close collaboration with dealers also helps the company ensure that new programs and initiatives have a greater chance of success as they aren’t being shoved down from head office. They are instead jointly developed.
One view of the truth
Another tool that helps keep the communication flowing, is the use of standardized software tools to share reporting from the dealerships. Almost 90 per cent of the Mercedes dealerships operate on the same software system which makes standardized reporting instantly available to senior managers — and to dealer principals.
Reuss says every morning on his BlackBerry he gets a national delivery summary that shows how many units were quoted per month, how many contracts were written up, and it provides him an updated closing rate for the month, giving him visibility into the pipeline in the months ahead.
“This is updated automatically from the system every day,” says Reuss. “There are not a lot of companies that can get that. This is a huge advantage. This gives me real-time data of what is really happening out there.”
Reuss says they are now going to take all the leads from auto shows, Facebook, the Internet, and other marketing and will push them automatically into the system so they end up on a salesperson’s desk.
Store standards
In terms of imaging their stores, Reuss says the modernization and imaging programs are now all up to standard. “This is something that already took place in Canada,” says Reuss. “We can say as MB Canada that we are done.”
“It has paid off,” says Reuss. “If you look at the return on sales that our dealers have in Canada it is very good. The dealers are making money.”
But while they are elegant and upscale, the MB dealerships, he says, are not over the top. “We have very functional dealerships, but we do not have Taj Mahals,” says Reuss. “That’s what a dealership needs to be in order to make money. These are not brand museums, these are dealerships, and that’s the philosophy we are keeping to very strictly in Canada — and it’s working.”
The second phase of dealership investment involves some bricks and mortar expansion, particularly in service, but it’s more of an investment in systems and software. “The building only goes so far, it’s what’s inside, meaning the people, the processes and the systems.”
In terms of the people, the company is having a big push to train employees, having trained 50 per cent more people last year than it did in 2010. Training is across departments from sales, service, F&I, warranty — throughout its operations. “It’s a different approach for different parts of the business that we have to train for,” says Reuss.
For example, they have to train their service techs about new technologies such as working on the aluminum bodies on the SL models.
New models, new markets
Part of the training will also involve sales, as the company intends to bring new products to market that will cross into demographics they aren’t yet as familiar with.
“In the future we will be selling to customers that we didn’t sell to before,” says Reuss. “We are going to expand our line up into new segments.” In 2013 the company will bring a smaller four door coupe and smaller SUV to the market and will later bring A class vehicles to Canada.
Reuss says the company needs to learn more about these customers, and will have to adapt its language and product offering to suit their needs. Salespeople will also need to adapt their approach. The company’s best salespeople are already adept at selling all products from B-class up to S-class, says Reuss.
He says the company’s leaders have outlined something they call Roadmap 2015 that describes steps that are required across the entire company to take the business to the next level in Canada.
Modern sales tools
The company is also introducing devices like iPads as sales tools in dealerships this year. The app helps explain vehicle features, and shows interactive elements such as videos that explain technology.
Another tool they are introducing is a grounding tool for accepting vehicles off of lease. “That accelerates the process and enables the dealer to be faster,” says Reuss.
Keep loyal customers happy
Strong customer retention rates and loyal customers is helping build the base the company will lay its growth plans upon. The company does an excellent job, says Reuss, at keeping in regular contact with customers with products such as emails and customer magazines.
The customer magazine is very well received, he says. “It’s not just PR content, it has style and speaks to the people,” says Reuss. “It’s not a sales brochure, there’s real good content in it and that’s what makes that magazine very valuable to the customers.”
Other developments on tap for this year including the introduction of the 2013 smart fortwo electric drive, the smart ebike, and the company is going to be producing fuel cell stacks for worldwide production at a new facility that opens in June in Vancouver.
2011 sales at a glance Best year ever for the group in the following categories:
- Mercedes-Benz and smart combined sales with 32,914 units delivered
- Mercedes-Benz passenger cars and light trucks with 31,063 units retailed
- Mercedes-Benz passenger car sales with 17,207 units sold (lead position in the luxury market in Canada)
- Mercedes-Benz light truck sales with 13,856 units retailed
- Mercedes-Benz Pre-Owned sales with 13,079 vehicles delivered
- Mercedes-Benz Sprinter sales with 2,479 units retailed
