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Monday
Jun152015

Vehicle Service In Canada

Click on imgage to enlargeIf you are in the auto business and ever wondered how many service bays there are across Canada, you could simply wonder out loud and not arrive at an answer.

Well...

"The Automotive Industries Association of Canada (AIA) recently commissioned DesRosiers Automotive Consultants to undertake the first detailed analysis of the number of service bays in Canada.  This groundbreaking study used a variety of proprietary surveys and methodologies to explore the number of commercial bays handling light vehicle repair and maintenance, excluding tire, glass and collision focused shops.  The analysis indicates that the total bay count in Canada in 2014 was 106,913 bays spread across 16,683 locations.  Independent service outlets had the largest location count (11,904) and accounted for approximately fifty percent of the overall number of bays. At a national level, the DAC analysis indicated there were 221 light vehicles on the road in Canada for each service bay with provincial variations being notable as always.Overall, the service bay sector is operating close to capacity handling in excess of 64 million service visits annually."

Lets look at these findings from a service productivity perspective.

  • Lets be optimistic and agree that the average RO (repair order) is 2.5 hours.
  • There are 8 working hours per day for each service bay.
  • Each service bay can accomodate at least 3 vehicles per day (8 divided by 2.5 = 3.2)
  • At 106,913 times 3 = 320,739 vehicles can be serviced in 1 day across Canada
  • 106,913 times 7.5 hours (we agreed on 3 vehicles) = 801,847 hours at $ 100/hour = $80 M of service labor sales per day - we are not counting parts.
  • At 20 working days / month  320,739 x 20 = 6.4 M vehicles per month = 76 M vehicles per year
  • If from above 64 M visits = 1 vehicle per visit
  • The service bays can handle 76 M vehicles, 64 M is 84% of the capacity in number of vehicles and hours.
  • A service bay that runs at 84% capacity is not productive, and does not make good money.
  • From the above the vehicle population in Canada is 23.6 M lets say 24 million and there are enough service bays to service 6.4 M vehicles per month in a 4 month time frame every vehicle in Canada can be serviced.

A service bay in an 8 hour day should generate a 20% premium in productivity, in 8 hours 9.6 hours are sold at 2.5 hours per RO (again being very optimistic at 2.5) that is 4 vehicles per bay per day.

Some folks are not making the money they should or could with their service bays.

 

Friday
May152015

B.B. King

If you are a blues fan today is a little sadder knowing the B.B. King is gone.

 

Thursday
May142015

Too Much Oil, Debt, Cars

If you do your morning news tour, like we do, lately we are always reading a different version of the same thing, over and over.

The price of oil goes in the dumpster for every reason on the planet. In the meantime gas is $1.10 a liter in the GTA, and in case you have not noticed premium has crept up to an additional 22 cents per liter. Lets just say that somebody is making some money retailing oil converted to gasoline at $1.10 a liter.

In Canada we are a nation of borrowers that are headed for a "wall" at some point. We are a consumer economy enabled by a myriad of forces to remain a consumer economy. Its the Canadian consumer that keeps Canada rolling along. Yes...CMS (Citizen Main Street) as we call him.

Auto sales are through the roof, enabled by the same forces upholding the consumer economy...we call it free flowing money. Other folks are always trying to find new meaning in reading the tea leaves.

On a different note

Perhaps you remember the old saying "Sticking your foot in your mouth"...in an age of social media, everybody is on 24/7. This past week we had a politician, and a soccer fan stick both feet and then some in their mouths. The politician went on damage control, and the soccer fan paid the price.

One more thing

The Canadian infatuation with real estate that keeps a ton of businesses going in one fashion or another, in addition to keeping a myriad of pundits going all day long.

From a car business perspective the old saying "What is a car worth?" the answer "The price that the individual who bought it paid for it."

The question

Are we in a new Canadian reality with a bunch of folks attempting to grasp the future through the rear view mirror?

What do you think?

 

 

Wednesday
May062015

Kentucky Derby 2015

You know that we love horsepower...

In case you missed it live, last Saturday's Kentucky Derby, the 3 leading horses were trading sweat up to the finish line.

 

Monday
Apr272015

Royal Victoria Hospital

Nothing do do with cars or the auto business.

This past week end the "Royal Vic" in Montreal closed permanently. The passing of a long established hospital, replaced by a new facility The Glen.

Why are we talking about the Royal Vic this morning?

A few decades ago, 2 members of the Strada Crew were born at the Royal Vic.

The Colonel had a hand and a shoulder fixed at the Royal Vic. The hand was an unfortunate accident, and the shoulder the result of a hockey game.

For generations the hospital was the go to medical facility in Montreal, on the slope of the mountain with iconic architecture. The result of folks residing in the "Golden Mile" wanting their own hospital close the the university back in the days when Montreal was literally the epicenter of Canada.

Although no longer an operating hospital, the various buildings remain a compelling Montreal landmark.

Lets not forget the Mc Gill University student dormitories a little farther up the hill.

 

 

Tuesday
Apr072015

Blitzen Benz

Cool Car...

 

 

Thursday
Mar262015

Self Driving Pete

Gotta love this...

 

Wednesday
Mar042015

The Cadillac Conversation

Have you noticed that with the #DareGreatly campaign the Cadillac conversation has ramped up especially in auto industry circles.

At a time when anyone can share their thoughts, there is no drought of opinions on what Cadillac should do and not do ro regain a better position in the luxury segment. What is fascinating, its mostly the same comments and opinions that have been floating around for years that re emerge every time.

Its like an old vinyl record or a CD either one with a few scratches that gets played, replayed over and over. Some things never change.

Lets take a different look at Cadillac this morning? As Edith Piaf surmises "Je ne regrette rien" in 2015 Cadillac is making a bold statement that its daring greatly and regretting nothing. While seeking a younger customer base for its product.

Product:

We believe that in the auto business the product remains a strong factor towards sales success. The ATS and CTS are world class luxury cars. Yes...it cost more to engineer and build a world class car. The Escalade is in its own bubble, the SRX keeps on selling.

Competition:

Formidable, unrelenting, and superior to Cadillac. MerBimAu Advantage is a brief summary. One simple point the folks at Cadilac should be aware that in Canada a Cadillac showroom/service reception shared with every other GM product is a far cry from the stand alone brand specific MerBimAu showrooms/service receptions.

How competitive are the customer touch points around the product?

Perhaps the only stand alone (similar to MerBinAu) dealer in Canada is Cadillac Laval.

Price:

World class product, less world class customer touch points, accompanied by a world class price reflecting the product, while overlooking the touch points and experience.

Cadillac should recalibrate its price in relation to the entire ownership spectrum. Especially as it relates to a younger customer base. Every entry luxury manufacturer is marketing to the same customer base, and expects to increase their share.

Financial Package:

The majority of luxury cars are leased in Canada. Cadillac is no exception, most ATS's are leased. We know that a leased vehicle if the ownership experience is excellent generates a higher loyalty.

Attitude:

The folks at Cadillac have an attitude that its a great car, at a world class price, while forgetting that its a tired brand that does not fully resonate with the customer base they are seeking. A MerBimAu in the drive way makes a stronger statement than a Cadillac.

Brand:

When Cadillac was the standard of the world, there was nothing else around, MerBimAu was a figment of the imagination 2 generations ago. The segment was for Cadillac to keep, and someone else to earn.

"Je ne regrette rien"...."Est ce que je suis plus sage?"

 

 

Saturday
Feb282015

Miss You

Saturday morning nostalgia on this last day of February Miss You with Buddy Guy, Ronnie Wood, Johnny Lang. By now you know that we are not just about cars...catch the moment Buddy Guy breaks a string on his Stratocaster.

 

Thursday
Feb262015

Headlamps

We tend to take headlamps for granted, especially that for the past few years they have turned into a light show, and in some instances become a brand identifier.

Lets go back for a moment to the sealed beam headlight that was the mainstay of the industry for decades. The 7 inch round sealed beam with the high beam button on the floor. That sealed beam provided some sort of visibility compared to today, although at the time we did not know better.

The industry progressed from single round , to double round, to double rectangular, always a sealed beams that provided visibility. While the high beam button that was on the floor progressed to the turn signal stalk on the steering column.

Back in the day, at some point you surely concluded that you could overdrive the headlamps on your car especially on a dark secondary road. As most enthusiasts you started seeking a headlamp that provided more  light and speed.

The immediate fix was to install a set of "driving lights" if the car provided space to install driving lights. It was also a cool factor to have driving lights on your car. On heavy duty trucks for decades Per-Lux driving lights mounted in a bumper extension were the cool factor.

An alternative was to exchange the sealed beams which were inexpensive; for headlamps with halogen bulbs that provided a dramatic improvement in lighting, and increase in price. Obvious halogen provided more light, and speed prior to overdriving the headlamps. Some halogen headlamps accumulated humidity which deteriorated the reflector.

At one point manufacturers too adopted halogen headlamps.

The advent of Xenon (HID) headlamps was the next big step. They were expensive as an option, and expensive to repair.

Now its LED headlamps which are increasing in popularity. We all know that Audi for the past decade has been a pioneer with LED lighting. Today all luxury cars have one form or another of LED lighting in their headlamps.

Agreed...the headlamp light show gets even more interesting with the increase in SUV/CUV and lights being higher off the ground, and many folks augment the light show with their driving/fog lights.