And a time of change and opportunity
A new year is often viewed as a new beginning for many: a fresh start; out with the old and in with the new. For me, the New Year is a fresh start in a different way. After five years writing for another Canadian automotive publication this marks my first column for Canadian auto dealer and I am very pleased to have been invited to be part of the team. It is a real honour to be writing under the guidance and direction of Gerry Malloy; the guy is a wealth of industry knowledge.
Gerry actually suggested the title for my column – The big picture – and in this space I’ll attempt to provide you with a perspective on the big-picture issues that can impact your business, even if their impact may not be immediately apparent.
Admittedly it is a bit of a tall order. I think each one of us who has been in the industry for any length of time recognizes how much more complex it has become, as have the issues impacting it. However, that is my challenge and ultimately, you , the reader will be the judge with respect to whether or not I live up to the column’s title.
Now, let’s take a look at two broad issues, the environment and safety, each of which have specific issues that will affect the industry over the course of the upcoming year.
Environment
If we look at the broad issue of the environment, 2011 represents the first year of Canada’s greenhouse gas emission standards, which were finalized in early October last year and are intended to replicate standards established in the United States. Many may not appreciate it, but these standards mark the first time that Canada’s automotive industry has actually had its fuel efficiency regulated. (For that is essentially what the greenhouse gas emission standards are – fuel efficiency standards.)
If you are wondering why automakers are aggressively moving into electric vehicle technology, it is because the new regulations require more than a 40 percent improvement in fuel efficiency between 2011 and 2016, when the traditional annual improvement in fuel economy has been around one percent per year. What this means for manufacturers, and therefore their dealers, is that a real hard look will have to be applied at what is brought into inventory and offered for sale in order for manufacturers to meet their regulated GHG targets.
Beyond new GHG regulations, other environmental initiatives that could adversely impact dealers are “feebate” schemes currently being considered by some provinces. Many will recall the federal intrusion into the marketplace via the ecoAUTO rebate program a few years back.
Meanwhile, many provinces and the federal government continue to explore new stewardship programs for vehicle components such as mercury switches, tires and batteries, to name but a few, that continue to cause confusion and add cost at the retail level for consumers purchasing a new vehicle.
Safety
Vehicle safety is an issue that had been in the press in a significant way this past year owing to the massive recalls issued by Toyota and the perceived deficiencies in the Motor Vehicle Safety Act in Canada. While some politicians have suggested that the Act puts the fox in charge of the hen house by ultimately making vehicle manufacturers responsible for recalling their product as opposed to the government intervening in this regard, the reality is that the system has worked quite well for decades.
The increase in voluntary recalls by the manufacturers observed in 2010 is actually a good thing. It means the system is working and that Canadians can take assurance from the fact that manufacturers view the safety of their customers to be of paramount importance.
Nonetheless a Private Members Bill, C-511, is currently being reviewed by a House of Commons Standing Committee and if passed it could require significantly more information to be uploaded from the manufacturers – and potentially the dealers – to Transport Canada, to assist in defect investigations.
Change
What these two broad categories of environment and safety underscore is that the vehicle as you know it is changing rapidly.
With change comes both challenge and opportunity.
New propulsion systems such as battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) create challenges for dealerships in terms of ensuring that you really understand what your customers’ needs are. It’s important to ensure that they don’t end up with a vehicle that they ultimately don’t want because time had not been taken with the consumer to explain the features, benefits and limitations of some of these new vehicle technolgies.
Likewise with the myriad of safety equipment that is being built into the modern motor vehicle. The sales invoice may indicate that the vehicle is equipped with ESC, but unless someone spends time with the consumer educating them on the benefits of ESC the consumer may end up rattled when the ESC light comes on and the car handles differently. We would all benefit greatly from consumers being fully apprised of all of the safety features in the vehicle and how they work when they pick up their vehicle.
The new year is a new beginning and with your eye focused on the big picture, 2011 brings with it the opportunity for greater success and growth in your operation.
