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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)
R1000R2W2W1 R1... ...
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
