Automotive News Canada - August 2024 - 23

* AUGUST 2024
23
If BYD addresses EV affordability,
the cost to the industry could be huge
CONTINUED FROM PAGE 1
Automakers in Canada, he
said, " should be scared sh--less "
as BYD prepares to roll in with
a simple, low-cost product that
" does what it's supposed to. "
Fear among auto brands in
Canada is already evident, said
Daniel Ross, senior manager of
industry insights and residual
value strategy at Canadian Black
Book.
The industry's recent push for
tariffs on China-made EVs shows
that Western automakers see the
need to minimize the price gap
between their own EVs and those
made by China companies, Ross
said.
LEARNING BYD'S PLAYBOOK
How BYD would price its vehicles
in Canada isn't known, but
global markets provide some
indication.
Ross: With
high costs
holding back
EV adoption
in Canada,
BYD would
" absolutely "
find eager
buyers
with an EV
priced under
$35,000.
PHOTO
LINKEDIN
Le said the BYD Atto 3, known
as the Yuan
Plus in China,
is typically
among the first
models the company
ships into
new markets.
In Europe, the
compact crossover
starts at
€37,990, roughly
Cdn $57,000. The
BYD Dolphin,
a subcompact
hatchback,
starts in Europe
at €33,990
($51,000).
The low-cost
BYD Dolphin
Mini, known
as the Seagull
in China, isn't
available in
Europe, but has
gone on sale in several other
markets. In Brazil, it sells for
the equivalent of about $28,500.
BYD recently applied to the
Canadian Intellectual Property
Office for Canadian trademarks
for all three models, along with
several others, including the
BYD Shark, a midsize plugin
hybrid pickup the company
plans to build in Mexico.
Before applying federal or
provincial rebates, the cheapest
EV available in Canada is the
Fiat 500e, with a sticker price
of $42,190, including delivery.
A few other models at the low
end of the market start at about
$45,000, but most EVs retail
today for more than $60,000.
With these high costs holding
back EV adoption in Canada,
Ross said BYD would " absolutely "
find eager buyers if it can
enter the market
with an EV
priced at less
than $35,000.
Le pointed
to BYD setting
relatively low
prices as vital
to uptake.
" Most people
aren't going
to spend $70,000
on a BYD, but
they'd consider
it for $30,000
[or] $35,000. "
But finding
the right price
point is just one
of many challenges
for BYD.
Robinet:
BYD vehicles
are " well
executed.
Anybody that
thinks that
they're not,
hasn't seen
one recently. "
FILE PHOTO
Importing vehicles into
Canada is more involved than
loading them on a ship or producing
them in Mexico, said
Michael Robinet, executive
director of automotive consulting
with S&P Global Mobility.
" You need to set up an infrastructure.
Even if you don't
have a dealer network and you
go to an online model, you need
to set up a service network, you
have to establish a beachhead in
the country to better understand
the regulations. "
Given BYD's expansion in
recent years, none of this will be
entirely new to the company, he
said. It will have a game plan for
Canada, but the move isn't for
the " faint of heart. "
CANADIAN CHALLENGES
BYD should also benefit from
studying the mixed successes
and failures of other EV upstarts
that have entered Canada,
Ross said. The company should
carry out its own homework
on Canada's unique challenges,
he added, which are often overlooked
by companies treating
Canada and the United States as
a uniform region.
Le said BYD's approach to
setting up shop has varied market
to market. In Australia,
for instance, the company
sells through a local distributor,
while in other markets it
employs networks of local dealers.
In numerous emerging markets,
the company has ramped
up extremely quickly, he added,
becoming the top EV seller in a
matter of months.
In other markets, such as
Europe, it's content to " play the
long game " and build sales more
slowly.
In all instances, however, the
company has shown a " willingness
and a determination to
stick things out, " Le said.
Industry sources have told
Automotive News Canada that
BYD has met with Canadian
dealers about establishing local
dealerships, but no further
details are known.
DEALER OPPORTUNITIES
Ross said that a big new player
entering the market might be
a " scary thing " for local automakers,
but for local dealers
it creates new opportunities to
diversify and to get involved at
the " foundation. "
" There's opportunity for
them to capitalize on never-before-seen,
high-interest vehicles. "
Along
with what are expected
to be lower sticker prices for
vehicles, the interest in BYD
stems from the good fit and finish
of its products, Robinet said.
" They're well executed.
Anybody that thinks that they're
not, hasn't seen one recently. "
But the company faces a
mixed regulatory environment,
Robinet said. On the one
hand, it has momentum built
off Ottawa's effort to electrify
Canada's transportation sector,
while on the other, possible tariffs
could dramatically cut into
its cost advantage over other
automakers, he added.
The Canadian government
concluded 30 days of consultations
on whether to impose a
surtax on China-made EVs on
Aug. 1. It has yet to say whether
it will follow the United States
and Europe in imposing tariffs.
- ANC
- With files from Greg Layson
Dealers reflect on CDK
and their own security
CONTINUED FROM PAGE 1
ages, " Williams said.
" We've heard incredible stories
of dealerships staying open
and finding innovative ways to
make sure customers are served,
which speaks to the entrepreneurial
nature of dealers. "
CDK Global sells a cloudbased
DMS that can run everything
from accounting, sales
tracking and parts sales, to customer-retention
and lead-tracking
systems.
'YOU HAVE TO GET BETTER'
Steve Chipman, president
of Winnipeg's Birchwood
Automotive Group, said steps
dealers are taking to improve
cybersecurity include moving
to 15-digit passwords from eight
digits and changing them at least
every three months.
" Anytime you're
challenged like this,
you have to get better, "
Chipman said.
Of Birchwood's 23
stores in Manitoba,
Saskatchewan and
North Dakota, 19 were
affected by the CDK outage.
The
fallout might only
be beginning for CDK
Global. U.S. competitor
Tekion Corp., which is
expanding into Canada,
attributes a recent runup
in dealer inquiries to
the CDK outage.
Ford, said CDK restored partial
functionality at his store July 3
and full operations a week later.
It " took about a week and tons
of overtime to get caught up, " he
said.
CDK Global waived Walker's
fees for June, and he's satisfied
with that compensation. " It definitely
cost us more in lost revenue, "
he said, " but at this point,
we just want to move on. "
It's hard to estimate the
impact on sales, he said. " Say we
lost 10 deals at an average $6,000
gross front and back. [It] could be
$60,000. [We] probably lost about
$15,000 to $20,000 in service/parts
gross on where we projected. "
SOME REGIONS DID OK
In its June sales analysis,
DesRosiers Automotive
Consultants said the CDK outage
" appears to have carried
a clear sales impact, and
one with regional implications. "
Walker:
CDK
compensated
Marlborough
Ford, but
" it definitely
cost us
more in lost
revenue. "
FILE PHOTO
" Our dealer sign-up momentum
was strong before the CDK
cyber incident, and it has gotten
stronger since with a lot more
business signed, " said Tekion
CEO Jay Vijayan, who, for competitive
reasons, declined to provide
specifics.
CDK responded to Automotive
News Canada's request for
comment, pointing to a July
22 story by sibling publication
Automotive News in which CEO
Brian MacDonald said that customer
connections were restored
and that CDK was continuing
to investigate the source of the
breach. CDK did not confirm
media reports suggesting it had
paid a US $25 million (Cdn $33
million) ransom to resolve the
outage.
Brent Walker, managing partner
at Calgary's Marlborough
DesRosiers said June
sales were similar to
those in June 2023. But in
British Columbia, sales
fell 7.9 per cent, Alberta
dropped 3.2 per cent, and
Ontario declined 1.1 per
cent.
In Manitoba, however,
sales rose 15.7 per
cent, " well ahead of the
overall June market, "
DesRosiers said. Quebec
sales rose 5.7 per cent
and in Newfoundland
climbed 18.1 per cent.
" The CDK outage appears to
have impacted Canadian dealers
in a noticeable way for June, and
this impact was evidently far
from evenly spread across the
country, " DesRosiers Managing
Partner Andrew King said in a
news release.
Williams said CADA is working
with CDK and the federal
government's privacy commissioner
to protect dealers and
their customers from ramifications
of the breach and stressing
to CDK that the onus for reporting
privacy breaches to Ottawa
should fall solely on CDK.
" The important thing is that
dealer suppliers get the message
that we need to have security we
can count on and protect customers
and dealers, " he said.
-ANC
Family's next generation is already deeply involved in Leslie Motors
CONTINUED FROM PAGE 9
Walkerton store in 1999 and
then the Wingham store nine
years later.
Each dealership has about 18
full-time employees.
Don and Mark's sister, Linda,
handles warranty claims at the
three stores.
The next generation is also
deeply involved, including
Don's two sons who are general
managers. Mark's two sons
began in sales in Walkerton and
now work in fixed-ops there.
" The boys have really
stepped up, " Mark said.
Every family member gets
involved in community work,
such as serving with the
Kinsmen and the hospital foundation,
said Don.
Ron was mayor of Harriston
for nine years and then served
on the city council for several
more years. Ron's wife, Gerry,
coached baseball for years.
Mark, Don's brother and
partner, serves on Ford
Canada's dealers committee.
While the dealerships are
modern - with sophisticated
websites, social media and
Level 2 and 3 chargers for EVs
- Don said success draws from
the family's community roots
and adding value for customers.
On rare occasions, the dealerships
have sold a vehicle
" without ever seeing a customer
until delivery, " said Don. But
" when a customer comes in,
quite often we know them by
name. "
AI ON LINE 1? NOT HERE
The personal touch is everywhere.
The general managers'
offices are within earshot
of the service departments, so
if there's a problem, the GM
hears about it quickly and
can intervene. There is no
AI-driven voicemail; instead,
staff are told to answer each
phone personally within three
rings, so customers always
speak to a human first.
The dealerships don't get into
price wars, Don said. Instead,
the company focuses on " fair "
pricing with a reasonable margin
on each sale. With the purchase
of each new vehicle, the
company provides two years of
free routine maintenance, such
as oil changes. Don said it's an
effective way to help customers
discover the quality of service
their technicians deliver.
" Maybe we're not the lowest
price, but we add value, " he
said. The company also makes
sure service customers get a
loaner vehicle.
The dealerships never try
to upsell customers, Don said,
instead choosing to " right-sell "
to a customer's needs. Highpressure
sales tactics are not
allowed.
The three dealerships have
drawn customers from well
beyond Harriston (population
1,800), Walkerton (4,700) and
Wingham (3,000), said founder
Ron.
The recipe for success is simple,
said Don.
" It's not rocket science. It's
hiring good people, making
sure there are good processes in
place and then things just seem
to fall into place. " - ANC
Automotive News Canada - August 2024

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