The German automotive industry has to struggle with difficult market conditions. Domestic car sales are stagnating at a level of just under 3.5 million units – and new registrations for private owners are even declining. This is a consequence of the shrinking size of the group of new car drivers under the age of 20, but is also due to the better quality and the resultant long lifetimes of the vehicles themselves. More rigorous EU environmental requirements, which hit German car makers and their powerful engines especially hard, and the effects of the Group Exemption Regulations (GVO), which allow authorized dealers, effective immediately, to open any branches they please all across Europe, to sell a number of brands, and even to procure original spare parts on the open market, are making life more difficult for manufacturers.

Market in Transition

Whenever markets are in stagnation, the precisely aimed look at the customer will often mean the difference between success and failure for the seller. This approach is all the more strongly recommended in the automotive branch because radical changes in the profit margins are beginning to appear on the horizon. Both premium and low-cost/compact car segments are gaining market shares at the expense of the midsize class which has sold in such high volumes up to now. There is a possibility that cash cows of the past will soon crash, and changes in the product range and in distribution are inevitable. The difficult question is, what customer groups will be profitable in the long run in the future. Manufacturers have long neglected the area of sales, particularly in Germany, and in the meanwhile are well out of touch with their end customers. The blame lies squarely on a centralistic view which frequently wants to degrade car dealerships to the lackeys of brand strategies. On the other hand, the dealers fear the losses of their relationships and keep important customer data under lock and key in their own system islands. Feedback on the sales campaigns conducted by the manufacturer is never created as a consequence.