ICDP's blog

The aftermarket is inherently slow to change – analogies with the time it takes for a supertanker to change course are common

On Thursday last week, Auto1 made a spectacular debut on the Frankfurt Stock Exchange, raising €1.8 billion, with a first day surge to 49% above the floatation price. The IPO put a billion Euros into the Auto1 war chest, which the company has said will be used to accelerate their development of their B2C offer – AutoHero.

There are many challenges to the implementation of fully autonomous cars, able to operate totally without a driver on public roads, so the announcement last week that autox – a venture backed by Chinese e-commerce giant Alibaba had launched a driverless robotaxi on the streets of Shenzhen in Southern China was significant.

Two weeks ago, I wrote about Apple and Tesla and their respective involvement in the car industry. Apple is obviously a tech stock by virtue of its current product offer, and Tesla is treated as one, rather than part of the traditional auto industry. We have become familiar with the high valuations achieved on the stock markets by companies like Tesla and newer start-ups such as Nio and Rivian.

Today, a deal was finalised between Hedin Bil, the 13th ranked dealer group in Europe, and Ford Motor Company for the sale of the Swedish Ford national sales company (NSC) to Hedin Bil. As a result, Hedin Bil will not only be the largest dealer for Ford in Sweden, but also act as the independent distributor for the brand.

Image from the Financial Times

Welcome back to 2021 – starting off, much like 2020 ended, except that we now have Covid vaccination programmes. I hope that you had some downtime over the holiday period and have returned refreshed for whatever the new year brings. I did consider making this first blog of the year a personal prediction of what some of the main events might be, but I felt that would be setting myself up to fail, so instead turn to a couple stories that have been doing the rounds over the holiday period related to Apple and Tesla.

…the used car business was straightforward. Take in some trade-ins, buy some cars from the local auction and your mates in the trade, quick polish and stick them on your forecourt with a price sticker until the punters rolled up.

My Tesla Model S finally went back to the lease company at the end of last week, which makes this a good time to reflect on what I learned from running this car for 3½ years and 80,000 km.

The last week was a grim one for anyone involved in what we call high street retail in the UK – the mainstream department stores and fashion stores that are the anchor of big shopping malls and take up many of the store fronts in a typical urban city centre shopping area.

Over the last couple weeks, a repeated theme has been around mergers, acquisitions and cooperations in the auto industry.

Today, Capgemini have published a report advocating the transition to an agency model for distribution networks, supported by consumer and dealer surveys in Europe and China.

As you hopefully noticed, I have missed a few weeks of my blog. I have not been on holiday (unfortunately) or struck down with Covid (fortunately), but tied up in a house move that did not go according to the carefully planned process, therefore continuing during a period when we had a lot on in ICDP.

I was driving past a local dealership earlier today, part of a Top 20 UK group, and saw one of the sales executives returning from a trip to the local shops.

At this time of year, many companies are into their budget processes, determining their priorities for the next fiscal year, what assumptions they make for their markets, and given that, how much they can afford to spend, and on what.

The news over the last two to three weeks has not been encouraging in respect of Covid case numbers and new restrictions on people gathering in significant numbers. There are obviously big differences between markets, and we should praise those countries who seem to have managed their response to the pandemic better than others – even more so given that they are not the ones you would have put money on six or seven months ago

There was a great response to last week’s blog on the Near Term Dealer Model – I appreciate the feedback. It’s always useful and sometimes picks up on specific points that merit further comment. This is an example of that – with respect to the need to reconsider how processes work in dealerships, and whether there are opportunities to improve.