challenges of new cars distribution lars-henner santelmann executive vice president, sales &...

Challenges of New cars Distribution

Lars-Henner SantelmannExecutive Vice President, Sales & Marketing SEAT S.A.

•New competitors –More overcapacity

–Even more pressure in prices

•Overcapacity –Prices under pressure

Drivers of change

Challenges of New Cars Distribution

•New customer behaviour –Internet: smart shopping/ new channels

–Niches / subsegments–Fleet business

–Less Loyalty

•BER –Accelerator–Less network control

•Price Pressure–Permanent productivity increase and cost reduction

–The new task: Distribution cost, logistics..

•Network Structure–Importer Wholesaler

–Fleet Direct sales

–Profitability in every individual business

–Exclusivity reserved to strong Brands

–Dealer Retailer

•More niches + Stable market + More competitors

–Pressure on investments : R+D, Production, Logistics

Consequences

Challenges of New Cars Distribution

–Shorter life cycle, less units per series

Approach to Customer

Challenges of New Cars Distribution

Supplier

FranchisingDirect Sales

Wholesalers

Desirability

+

-

Multichannel

Internet

Exclusivity

Key in hand

Retailers

Profitability criteria•Distribution costs•Economies of scale

Exclusivity Multibrand

Approach to Customer

Challenges of New Cars Distribution

Supplier

FranchisingDirect Sales

Exclusivity Multibrand

Wholesalers

Desirability

+

-

Multichannel

Internet

Exclusivity

Key in hand

Retailers

Profitability criteria•Distribution costs•Economies of scalei.e.Bang

& Olufsen

i.e.SONY

i.e.Medion

•Efficiency –Avoid waste in every process–Distribution process key of success

•Network Management – Use the opportunities of multichannel approach

•Individualism –One size does not fit anymore all

•Branding –Define and live a Brand profile

Short Term Regular Brands

–Define your product attributes

Challenges of New Cars Distribution

Traditional Structure Future

Brand

Importer

Retailer

Customer

Brand

Wholesaler

Retailer

Customer

Summary

Challenges of New Cars Distribution

Future

Brand

Wholesaler

Retailer

Customer

Summary

Steer the network optimisation

process

Challenges of New Cars Distribution

–From factory to retailer (one level Distribution System) (Wholesale+Retail)

Steering the Network optimisation process

•“SEAT Distribution System” (SDS)

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Brand

Challenges of New Cars Distribution

–Orders & Stock Management ( Allocate to order)

*Every car has a Dealer order.*All Dealers have access to all cars in stock

Steering the Network optimisation process

•“SEAT Distribution System” (SDS)

Challenges of New Cars Distribution

–Production Flexibility

*Manufacturer to real demand

•Product “superiority” does not guarantee the future

Conclusion for a regular Brand

Challenges of New Cars Distribution

•Do not neglect the radicality of the challenges

•Lead the change