Automotive News Canada - March 2020 - v2 - 10

03.20

Dealers need
real 'solutions'
JEFF MELNYCHUK

OPINION

EDITOR-IN-CHIEF

TO THE CASUAL READER OF AUTOMOTIVE NEWS CANADA IN PRINT
and online, it would appear that auto retail is moving - or should
be moving - in the direction of 100 per cent online.
But if there was anything to be learned from the recent
Automotive News Canada Congress retail panel (full story on Page
13), it's that the only person who's really onside with that is the guy
trying to sell his online solutions and services.
This is not to say that Louis-Yves Cloutier,
the
chief executive officer and co-founder of
Dealers acknowledge Montreal-based
360 Agency, doesn't know
online-shopping
his stuff. Clearly, he does.
trends, but they
It's just that the four dealers on the panel
don't want to waste - two from Alberta, one from P.E.I. and one
Saskatchewan - were doing some
money on 'solutions' from
eye-rolling and hand wringing while Cloutier
that don't sell cars. spoke about companies such as Amazon and
Tesla.
If members of the audience to the Feb. 13 event in Toronto didn't
pick up on the subtle body language, they heard the less-subtle
words.
"A lot of this digital stuff doesn't make money," said Michael
Norris, dealer principal at Volvo of Edmonton. "Tesla is losing
$1 billion a year."
And there you have it, in a nutshell.
Dealers are not looking down the road
five and 10 years, they are staring
month-end in the face.
No, they are not living under rocks,
either, blind to the boarded-up retail
space at the hands of companies such
as Amazon (that do nothing for the
community other than siphon money
from it).
"If you're not ready digitally, you're
going to be left behind," said Tammy
Roach, dealer principal of Charlottetown
Mitsubishi on P.E.I.
Volvo of Edmonton
Cloutier said that while dealerships
Dealer Principal Michael
still account for 95 per cent of automo- Norris: Selling cars
tive sales, more consumers are starting requires relationship
building, not online
their research online and visiting more
gimmicks. F I L E P H O T O
than one dealer before making a final
decision.
Online is likely where dealerships need to connect with customers, as the panel members generally agreed that lead generation
through various means, such as social media, is necessary.
But all this takes time and money and the results from online
strategies can be subtle. I've dealt with numerous companies that
offer "solutions," but not necessarily "results." Things such as
impressions, clicks, follows and likes all cost money to generate,
but do they sell more cars?
In part, that's what Norris of Volvo of Edmonton was getting at.
There's rarely a day that goes by when I don't receive a media
request from a startup claiming to have the definitive online solution
for dealers, so I can only imagine the flood of emails that dealers
get. To Norris, the only real "solution" for a car dealer is to spend
time talking to customers and building personal relationships.
The web, so far, is not a substitute. - ANC

EST. 1925

PUBLISHED WEEKLY BY CRAIN COMMUNICATIONS, INC.
KEITH E. CRAIN, EDITOR-IN-CHIEF
KC CRAIN, GROUP PUBLISHER
JASON STEIN, PUBLISHER

DAVE VERSICAL, CHIEF OF EDITORIAL OPERATIONS, AUTOMOTIVE NEWS GROUP

PUBLISHED MONTHLY BY CRAIN COMMUNICATIONS, INC.

NEWS DEPARTMENT

JEFF MELNYCHUK, EDITOR-IN-CHIEF, 506.854.5024, JMelnychuk@autonews.com
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Bigland defended minivan strategy
I'LL NEVER FORGET THE SURPRISED LOOK ON
The interview ended, but it underscored the
his face.
stance Bigland consistently took in the ongoing
Just minutes before, Reid Bigland's boss, Sergio debate over Chrysler's twin-minivan strategy: It's a
Marchionne, told reporters at the
bread-and-butter sales generator
2011 Detroit auto show Chrysler
that has kept dealers happy and
was considering killing one of its
three shifts running at the
MANAGING EDITOR
two minivans. Because the
Windsor plant. And in the early
Chrysler Town and Country and
years of the taxpayer-supported
GRACE
lower-priced Dodge Caravan are
Chrysler-Fiat union, minivans were
MACALUSO
so similar, "we're creating confua reliable source of revenue for
sion in the dealer network,"
the cash-starved car company.
Marchionne said. Consumers are
For dealers in Canada, the
COMMENT
having to choose between two
Caravan was a sales juggernaut,
minivans that are structurally the
often outperforming its premium
same, "so you need to make a brand choice."
sibling five to one, and reigning as the top-selling
Press conference over, I
minivan for more than 30 years. In the United
spotted Bigland, milling about
States, the sales gap with Town and Country was
the automaker's exhibit.
much smaller, leading to speculation that the ax
A rising star at the time, and
would fall on the Caravan.
long before the U.S. sales scanThe issue resurfaced at
The Dodge Caravan
dal that engulfed his career, the
the 2015 Detroit auto show
Chrysler Canada chief would
when reporters asked
has long been a
soon be juggling duties as head
Marchionne about the fate of
critical vehicle for
of U.S. sales and the Dodge
the Caravan once the
Reid Bigland,
brand.
next-generation Chrysler mini- FCA's Canadian
who will
van - the recipient of a
Cutting one of the family
dealers.
leave FCA in
$2-billion investment -
haulers would be front-page
April, fought
enters the marketplace. "If it
news in my city of Windsor,
to keep two
was [up to] Reid, we'd manufacture it until 2250,"
Ont., home of the minivan
minivans in
he quipped.
assembly
plant.
The
story
FCA's product
The Caravan's run will finally end May 22, taking
begged for comment from the
portfolio.
with it 1,500 jobs on the plant's third shift, which is
Canadian CEO.
FILE PHOTO
set to wind down June 29.
Bigland was resolute. There
But Bigland's view that the automaker stick with
were no plans to end Chrysler's dual-minivan strategy, which has served consumers and dealers well,
its dual-minivan strategy has prevailed. Last year,
and secured the automaker's sales dominance in
Fiat Chrysler launched the Caravan's replacement,
the segment, he said.
the entry-level Chrysler Voyager, which is built on
"Well, Marchionne just said two minivans that
the Pacifica platform. So far, it is sold only in the
are essentially the same confuses customers and
United States, while the Caravan continues to be
dealers," I replied.
available in Canadian showrooms while supplies
Silence. Bigland either didn't get the memo or
last. FCA won't say when or if the Voyager nameplate will cross the border, but it's unlikely to abanhe was surprised by Marchionne's willingness to
don the entry level of the segment here. - ANC
publicly air internal corporate discussions.

Canada continues its losing streak
IF YOU FOLLOW ME ON
Twitter, you've seen a GIF of Bill
Murray as meteorologist Phil
Connors saying, "It's Groundhog
Day ... again."
I toss it out there every time
the federal NDP calls for "a
national auto strategy."
The GIF seems accurate to
illustrate the lack of auto-assembly investment in this country -
again and again and again.
It's a vicious cycle:
Automaker plans investment,
Canada gets
excited, Mexico When is
or the southern
the federal
United States
wins the work,
government
the NDP calls
going to
for a strategy
wake up?
and the governing party of
the day ignores the call.
Groundhog Day.
As we first reported on our
website in early March, electric-vehicle startup
ElectraMeccanica became the
latest automaker to build a plant
in the United States rather than
Canada. And while this is a
small startup, it still stings
because ElectraMeccanica is
Canadian. Born in B.C. in 2015
and already leaving the nest.
One of the refrains I often
hear when it comes to auto production in Canada is that "we
don't have a Canadian automaker." Now we do. And even it
chose the United States - and

DIGITAL AND
MOBILE EDITOR
AUTOMOTIVE
NEWS CANADA

GREG
LAYSON

COMMENT
China - to produce its threewheeled Solo EV.
You see, the company plans
to build an assembly plant and
technical centre south of the
border. So far, seven states are
in the running.
"One of the big attractions is
that a lot of states are offering
compelling reasons to come
there," ElectraMeccanica CEO
Paul Rivera told me. "Canada
was in the running at one time,
but the U.S. incentives are just
too darn attractive."
I'm not upset with Rivera and
his fellow executives for exploring
the best financial opportunities.
That's just smart business. But
we can all surely be upset by the
lack of federal assistance.
Yes, Canada has the
Strategic Innovation Fund, which
the Liberals used to replace the
Conservatives' Automotive
Innovation Fund. This $1.26-billion investment, introduced in
2017, needs to be shared by
numerous industries, including
automotive, aerospace, defence
initiatives and tech sectors. And
yes, some automakers and sup-

pliers - Woodbridge Foam and
Toyota - have tapped into the
money.
But the fund isn't enough.
Even ElectraMeccanica looked
into it and still chose to build in
the United States.
There were other reasons.
"Although incentives are
important, they are just one of
the overall factors that we are
evaluating in this process,"
Rivera said.
He cited other U.S. advantages, including "logistics and regulatory climate."
At about the same time
ElectraMeccanica let everyone
know it was house-hunting in
the United States, NDP Leader
Jagmeet Singh and MP Brian
Masse were once again calling
for an auto strategy, just after
Fiat Chrysler Automobiles
announced that a midnight shift
at its Windsor assembly plant
would end.
The NDP says it wants a
national auto summit to restore
the Automotive Innovation Fund,
"make contributions to automakers tax-free to help secure
next-generation production
capacity," prioritize made-in-Canada vehicles and give Export
Development Canada a stronger
mandate to recruit and retain
investment in automotive plants.
It's a familiar call. It's just too
bad the other parties ignore it
again and again and again.

- ANC

Automotive News Canada - March 2020 - v2

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