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Russian Automobile DealersConvention 2015
Results of the EleventhCar Dealer Satisfaction Index – DSI1115 April 2015
Andrey Tomyshev,Head of the CIS Automotive Group
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April 2015Eleventh Car Dealer Satisfaction Index Survey
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Methodology
► Sales data reflect an accomplished fact
► Dealers’ opinion is a forward-looking index of confidence in the brand’s future
► Dealers’ opinion considers key aspects of relations with automotive manufacturers:
1. Sales of new cars
2. After-sales service
3. Sales of used cars
4. Financial relations
5. Retention and development of the dealer network
6. Advertising and promotion
7. Communication and feedback
► Index includes opinions on those brands in which at least 10% of the dealer networkgave their vote (based on estimates of ROAD and EY)
Page 4
Respondents
► The survey includes theopinion of 365 dealercenters by 18 brands,which passed the 10%threshold.
► Brand sales included inthe survey amount to52% of the total sales for2014.
► The number of surveyparticipants totaled 435dealer centers and 37brands.
Brand% of
participationin the survey
Brand salesin 2014
Brand salesin Q1 2015
Growth fromQ1 2014
ALFA ROMEO 100% 96 6 +100%
MITSUBISHI 56% 80,134 9,793 -55%
GAZ 46% 69,388 9,065 -35%
HYUNDAI 28% 179,631 39,841 -4%
SUZUKI 24% 19,931 1,264 -75%
RENAULT 23% 194,531 27,416 -41%
MAZDA 21% 50,716 7,243 -38%
NISSAN 20% 162,010 27,183 -41%
LEXUS 18% 19,149 4,002 +19%
TOYOTA 16% 161,954 24,023 -31%
LAND ROVER 16% 21,148 3,086 -37%
BMW 14% 35,504 8,334 -14%
JAGUAR 13% 1,628 209 -49%
CITROEN 11% 20,075 1,344 -78%
FORD 11% 65,966 5,060 -71%
CHEVROLET 10% 123,175 9,748 -72%
SKODA 10% 84,437 15,308 -19%
INFINITI 10% 8,983 1,709 -27%Source: AEB data, EY analysisNote: The data include light commercial vehicles
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Top brands which failed to reach the 10%threshold
Brand% of
participation inthe survey
Brand sales in2014
Sales growthin 2014 Vs
2013
Brand sales inQ1 2015
Sales growthin Q15 Vs Q14
OPEL 9% 64,985 -20% 3,574 -80%
VOLKSWAGEN 9% 140,683 -18% 20,039 -47%
AUDI 8% 34,014 -6% 6,132 -26%
HONDA 8% 20,655 -20% 856 -87%
MERCEDES-BENZ 7% 60,185 +21% 12,744 +7%
GEELY 6% 18,828 -31% 1,851 -62%
PEUGEOT 4% 21,102 -38% 1,340 -80%
KIA 3% 195,691 -1% 36,030 -15%
Source: AEB data, ROAD data, EY analysisNote: The data include light commercial vehicles
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Not rating aloneThe survey highlighted the priorities for development from the standpoint ofdealer
Sales of newcars
Maintenanceand repairs
Advertisingand promotion
Financing
Developmentof IT systems
Sales of usedcars andtrade-in
Successfactors
Dealernetworkdevelopment
Logistics
Man
ufac
ture
rs
Dea
lers
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Five priorities from the standpoint of dealers
Priority Best practice Area
Balance the supply volume and model rangewith demand
Increase dealers' participation in planning ► Build dynamic models of supply byusing scenarios
► Sales of newcars
► Logistics
Optimize the pricing policy subject to regionalspecifics and competitors' prices for spareparts and vehicles
Enhance the transparency of quota allocationand delivery terms for vehicles and spare parts
Fulfill production plans on a timely basis
► Common IT environment –IT system integration
► Logistics
Optimize the size of the dealer networkdepending on the market saturation
► Consolidate dealer centers,restructure inefficient companies
► Dealernetworkdevelopment
Enhance positions of authorized servicecenters
► Joint promotional events relating toservice centers
► Train service centers' employees► Optimize the document flow in
service centers (includingguarantees)
► Maintenanceand repairs
► Advertisingand promotion
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Ratings DSI-11
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Support for new car sales by manufacturer
Areas for improvement (based on dealer comments):
► Implement a balanced pricing and bonus policy
► Ensure transparency and consider dealer opinions in quota planning
► Balance the volume and model range with the demand on the falling market
► Enhance the transparency of, and optimize delivery terms. Fulfill production plans on a timely basis
- 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
Average
HYUNDAI
MAZDA
RENAULT
SKODA
GAZ
MITSUBISHI
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After-sales service
Areas for improvement (based on dealer comments):
► Enhance the competitiveness of spare part prices, adequacy of the cost of a man-hour (linked to US dollar and euroexchange rates). Reimburse repair cost in timely manner
► Improve the planning of spare part supplies and stocks, optimize delivery terms
► Maintain spare parts sales margin acceptable for dealer
► Optimize process related to reimbursement of warranty cost (for example: document flows, dispute settlement, timeof consideration of warranty claims and payment terms)
► Intensify seasonal events and subsidize advertising budgets related to repair services
► More active participation in analysis of customer satisfaction with repair services
- 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
Average
BMW
RENAULT
MAZDA
INFINITI
TOYOTA
SKODA
LEXUS
GAZ
MITSUBISHI
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Support for used car sales by manufacturer
Areas for improvement (based on dealer comments):
► Develop used cars sales programs
► Set up a mechanism for reimbursement of discounts provided by dealers under governmental trade-in and carutilization programs
► Conduct motivating events for dealers and provide advertising support
► Set up a used car offers database for the particular brand
- 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
Average
JAGUAR
MITSUBISHI
LAND ROVER
BMW
NISSAN
TOYOTA
CITROEN
SKODA
LEXUS
GAZ
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Financial relations
Areas for improvement (based on dealer comments):
► Timely payment of bonuses to dealers. Develop effective and bonus policy
► Decrease interest rates on loans and factoring
► Increase terms of deferral payment for cars
► Diversify portfolio of the offered financing instruments
► Expand the consignment term and grace period
- 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
Average
RENAULT
MAZDA
LEXUS
SKODA
GAZ
ALFA ROMEO
MITSUBISHI
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Retention and development of the dealer network
Areas for improvement (based on dealer comments):
► Optimize the dealer networks taking into account excessive supply of cars
► The growth in the number of dealers should correspond to the growth in demand for vehicles
► Show room standards should less strict and more adequate to current macroeconomic conditions. Refurbrishmentcosts should decrease
► Implement the system of bonuses for meeting KPI targets for dealers
- 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
Average
CITROEN
TOYOTA
ALFA ROMEO
SKODA
LEXUS
MAZDA
INFINITI
GAZ
MITSUBISHI
Page 14
Advertising and promotion
Areas for improvement (based on dealer comments):
► Increase subsidies of dealers' advertising budgets
► Consider opinion of dealers when conducting promotional events (as local dealers better understand local consumerpreferences)
► Increase the amount of advertising on federal and regional levels, as well as the amount of contextual advertising inthe Internet
► Reduce the time for approval of advertisement content
- 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
Average
LAND ROVER
HYUNDAI
NISSAN
TOYOTA
ALFA ROMEO
MAZDA
LEXUS
SKODA
GAZ
MITSUBISHI
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Communication and feedback support
Areas for improvement (based on dealer comments):
► React promptly to dealers initiatives and offers
► Provide information on plans regarding model mix and prices in timely manner
► Optimize and automate the document flow to accelerate key processes
► Improve the process of receiving feedback on technical support
- 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
Average
NISSAN
TOYOTA
LEXUS
BMW
MAZDA
SKODA
RENAULT
GAZ
MITSUBISHI
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Leaders of the satisfaction index by brandApril 2015
LEXUS
3
GAZ
1
MITSUBISHI
2
No. 1:•Sales of new cars•After-sales service•Financial relations•Dealer networkdevelopment
•Advertising andpromotion
• Communicationand feedback
Nos. 1, 2 and 3in thefollowingcategories:
SKODANo. 3:•Sales of new cars•Sales of used cars•Advertising andpromotion
No. 1:•Sales of used cars
No. 2:•Sales of new cars•Dealer networkdevelopment
•Advertising andpromotion
•Communicationand feedback
No. 2:•Sales of used cars
No. 3:•After-sales service
Page 17
Overall satisfaction index by brandApril 2015
- 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
SUZUKI
CHEVROLET
FORD
JAGUAR
ALFA ROMEO
LAND ROVER
CITROEN
HYUNDAI
INFINITI
BMW
NISSAN
RENAULT
Average
MAZDA
TOYOTA
LEXUS
SKODA
MITSUBISHI
GAZ
Page 18
Appendix
Page 19
Prior rating leaders, 2008-2015
August2008
April2009
August2009
April2010
August2010
August2011
October2012
April2013
October2013
April2014
April2015
AUDI
SKODA
LEXUS
PEOGEOT
CITROEN
KIA
GAZ
TOYOTA
VOLVO
RENAULT
MAZDA
MITSUBISHI
111112
2 32 3
2 3
2
3
22
13
33
6 1 -
1 1 1
- - 1
- 1 1
- 1 1
- 1 1
3 2 -
- 1 -
- 1 -
- - 3
- - 2
1 2 1
1 2 3
1
2
3
1 1
3
3
2 2
1
1
3
2
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Andrey TomyshevHead of the CIS Automotive Group
Tel.: +7 (495) 755 9673Mob.: +7 (985) 991 5849Fax: +7 (495) 755 9701Email: [email protected]
Background
► Andrey is the Head of the CIS Automotive Group.► He has more than 10 years of experience in providing
transaction advisory services.► Accredited appraiser of the American Society of
Appraisers (ASA).► MSc in Economics (Moscow State University).
Skills
► Business valuation, financial modeling,comprehensive investment research, includingpreparation of business plans for investment projects,commercial review, and market research.
Professional experience
► Participated in more than 100 projects for financialmodeling, business valuation, and preparation ofcomprehensive investment research for the purposes ofraising finance, mergers and acquisitions, financialreporting, business reorganization, issue and exchangeof securities, etc.
► Provided expert testimony on behalf of the client. Thisincluded review of the valuation reports prepared byexperts of the counterparty in a lawsuit, defeatingarguments/answering questions of the counterparty,assisting in preparation of documents submitted by theclient's lawyers, appearance in arbitration court.
► Led a significant number of projects in the automotiveindustry.
Presenter
Thank you for your attention!
