REACHING FOR THE TOP
All-star speakers inspire dealers at CADA Summit
An Economic panel moderated by Michael Hatch, CADA’s chief economist, included (left to right) Globe and Mail financial columnist Preet Banerjee, Deloitte’s Ramesh Swamy and TD’s Craig Alexander.
The people at the heart of the automotive retail sector in Canada sat shoulder to shoulder in Toronto on Feb. 13th and watched a great spectacle unfold on stage before them: the inaugural CADA Summit.
Opening speaker, CADA Chairman Alex Baum, said the Summit was put together to help dealers better understand where the industry is headed in the future.
The one-day event featured more than a dozen speakers from both sides of the border, but it featured much more than that. Ideas and business cards were exchanged during meals and networking breaks, and bonds were strengthened and new friendships forged.
The audience was mostly dealer principals and senior dealership staff, but there was also a cross-section of OEM representatives, bankers, suppliers, and industry association executives.
The event, which was organized by the Canadian Automobile Dealers Association featured frank and spirited debate about the state of the automotive retail in industry in Canada, with speakers helping to paint a clearer picture of what life for dealers will look like in the not too distant future.
The picture that emerged was a mixture of ever demanding and better informed customers putting pressure on dealership staff to adjust, a greater need for OEM and dealer cooperation, the difficulty of finding, retaining and training people to effectively meet the needs of the business — all in the midst of a technological revolution the like of which we’ve never seen before.
CADA Chairman Alex Baum, President of Cochrane Toyota in Cochrane, Alta., kicked off the event by explaining to delegates that the CADA Summit was born to help the association better understand the road ahead so they could be in a better position to provide support and services to dealers.
Matt Stevens, chairman of Electric Mobility Canada, said that despite their slow acceptance today, EVs will represent a much bigger slice of the market in the future.
Dealers praise summit
In an interview after the event, Baum had high praise for what took place. “In my career, I have not seen manufacturers at a high level, dealers at a high level, bankers, media, and futurists all in the same room enjoying the same excellent content,” said Baum.
Other attendees echoed Baum’s comments, and organizers say the feedback was “overwhelmingly positive.” One insider said that it’s rare to get such unanimous praise from dealers at any industry event.
“I thought the CADA Summit was great. I really hope to see CADA continue to do that and for it to get stronger and stronger. It’s great for our industry to do that,” says dealer principal Trevor Boquist, a participant in the retail panel and a recently-named CADA Laureate. “I enjoyed all the speakers and the panels. I enjoyed the media panel. I thought they had some interesting comments and as usual they were pretty frank and straightforward.”
It’s tough to condense a full day of sessions and an evening keynote into one magazine article, but here’s a quick summary of just some of the highlights from the sessions:
Ramesh Swamy, Delotte’s retail expert provided a great overview on trends affecting all retailers to kick off the CADA Summit.
Ramesh Swamy, a member of the Deloitte National Retail and Distribution Leadership team led off with an overview of the changing retail market, with a focus on automotive.
Retail revolution
Swamy’s “retail revolution” session alerted dealers to the trends that will affect their businesses. “Those that don’t embrace these changes are probably going to disappear,” says Swamy.
It was a sobering start to the day, but Swamy made a convincing argument, backed by statistics and industry research, that the nature of the car buying process was going to change dramatically. For example, since 83 per cent of mobile car shoppers have a smartphone and eight per cent have a tablet, this is how dealers need to reach them. “This is the way, this is the future, this is the way you need to get to these folks,” says Swamy.
We have moved from the typical purchasing funnel to what Swamy called the “shaky pyramid.” In this new model, the focus shifts from marketing to customers to driving advocacy among owners and prospects. “Today people are more interested in what people are saying about you than what you are saying about yourself,” says Swamy.
Swamy also helped dealers better understand Generation Y that now only represent 10 per cent of the car market, but that will account for as much as 40 per cent of all sales in the next 10 years. This group, aged 19 to 31 are different than any generation that came before them. They have short attention spans, are very cynical, have a desire to be heard not spoken to, have a global perspective and are self-centred, he says.
Christian Chia, president of the Open Road Auto Group, talked about the need for dealers to excel at aspects of the business they still control, such as the test drive.
“Dealers need to take every single GenY lead seriously,” says Swamy. “There is a digitally aware customer standing in your lot challenging your people. If they have a bad experience they will tell everyone about it.”
The economic panel was moderated by Michael Hatch, CADA’s Chief Economist, and featured Preet Banerjee, personal finance columnist for the Globe and Mail, Craig Alexander, Senior Vice President and Chief Economist for TD Bank Group, and Ramesh Swamy from Deloitte. They provided an overview of the Canadian economy, with a view to how global factors could impact upon the Canadian retail marketplace.
Panelists discussed topics such as the risks associated with the health of the Canadian housing market, with most painting a fairly rosy picture of the underlying strength of the Canadian economy, despite warnings of rising levels of consumer debt.
Obama’s “Car Czar” speaks
Steven Rattner, the investment banker brought on board by President Obama to restructure the failing U.S. auto industry gave an insider’s account of what transpired during that historic time.
Obama’s former “Car Czar” Steven Rattner provided an inside look at what happened in the halls of power during the historic restructuring of the U.S. auto industry.
Rattner provided a fascinating account of what went on behind the scenes and what they discovered inside GM, where he described a culture of privilege and elitism, and a decision making process that was far removed from sound business practices.
In a comment he knew wouldn’t be popular at a dealer event, Rattner maintains that the Detroit Three had too many dealerships, and that shutting down dealerships was necessary. “To some degree it was mom and pops trying to compete with Wal-Mart,” he says.
When Rattner was called in, GM and Chrysler were on the brink of collapse, and the entire industry and supply chain were in danger. “This was a once in a lifetime chance to fix this industry,” says Rattner. “We had to decide on whether to make this investment on behalf of the U.S. taxpayers.”
One of the key decisions right out of the gate, was to fire GM’s CEO Rick Wagoner. “In the private equity business, we back management teams,” says Rattner.
Rattner detailed how GM’s books and finances are now cleaned up and he showed how the company is profitable. “I do believe these companies are fixed,” says Rattner, although work remains to be done. “It’s clear that GM has not quite fixed all their management problems.”
Rattner says Chrysler is doing “remarkably well,” and that the team leading the restructuring was very close to dropping Chrysler — if not for their faith in Sergio Marchionne, now the CEO of Chrysler-Fiat.
“He is really one of the most extraordinary managers I have met in my entire career,” says Rattner. “We made a bet on Sergio as much as anything else.”
In a question and answer session after Rattner’s talk, Niel Hiscox, publisher of Canadian auto dealer asked Rattner the question on everyone’s mind. “What is Obama really like?”
“Obama is very smart. He’s very technocratic and analytical and thoughtful,” replied Rattner, adding that when presented with alternatives he just methodically works his way through it. “He never lost his cool,” says Rattner. “He is a guy that just comes to work to get the job done…I have a lot of respect for him. I enjoyed working for him.”
Moderated by Canadian auto dealer publisher Niel Hiscox, the OEM discussion panel featured (left to right) Kia’s Maria Soklis, Volkswagen’s John White, and Ford’s Dianne Craig.
Hiscox was also the moderator for the manufacturer’s panel that featured the Canadian heads of three manufacturers: John White, President and CEO of Volkswagen Canada, Maria Soklis, President and COO of Kia Canada and Dianne Craig, President and CEO of Ford Canada.
The manufacturers talked about issues such as skills shortages in their industry, factory re-imaging programs, social media, digital marketing, reaching the new GenY buyers and everything in between.
Other presentations including Matt Stevens, the Chairman of Electric Mobility Canada, who lobbied for support for electric vehicles, and futurist Jim Carroll, who presented a whirlwind overview about viewing change as an opportunity and not a threat.
Carroll said the source of automotive innovation is shifting from Detroit to Silicon Valley as the battleground for sales is going to be inside the cabin not under the hood with the in-vehicle experience being the key. “The future belongs to those who are fast,” says Carroll, noting that 60 per cent of Apple’s revenues comes from products that did not even exist four years ago.
The retail panel was moderated by industry expert Chuck Seguin, and columnist with Canadian auto dealer.
Seguin was joined by Jim Carroll, and CADA Laureates and dealer principals Christian Chia, Trevor Boquist and Paul Shaw, who shared their best practices and strategies for retail success.
Christian Chia said that as the dealer’s role in the purchasing funnel is reduced, they need to excel at the aspects they still have control over, such as the test drive, delivery and after-sales service.
Paul Shaw said that he believes the F&I office has a bright future, and people will look at more products that add value to their vehicle purchase.
Trevor Boquist said dealers need to ensure they are relevant, so that if a customer has a question they ask them instead of going into the “Google world” to get answers.
During the Media panel discussion, Automotive News’ Jason Stein talked about the proliferation of big dealer groups in the U.S. and the challenges factory image programs are presenting for many stores.
The media panel, moderated by Todd Phillips, editor of Canadian auto dealer, featured veteran automotive journalists from both sides of the border: Jason Stein, senior editor Automotive News, Jeremy Cato, Globe and Mail, and David Booth, National Post.
Cato challenged dealers to hire more women if they wanted to sell more cars and improve the sales experience. Booth told dealers that none of the infotainment technology in their vehicles came close to matching the user friendliness of his smartphone. Booth and Cato both said that the quality and features in vehicles were almost identical and that dealers are “delusional” if they think there are still big differences between the brands anymore.
For his part, Stein said the issue of OEM factory image programs remains a big issue as dealers struggle to see the return on investment from these initiatives.
Bob Lutz charms
The highlight of the night for many delegates, though, was the dinner keynote from former GM Vice Chairman and industry legend Bob Lutz.
Lutz delivered an inspirational address about leadership and his passion for the auto industry. At the end of his keynote, Niel Hiscox engaged in an unscripted question and answer session, where Lutz shared his opinions and thoughts on the auto industry, and some of his personal triumphs and challenges over his 50 year career.
View our CADA Summit photo gallery.
