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HELLA RECORDS SHARP SALES DROP IN 2019

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HELLA RECORDS SHARP SALES DROP IN 2019


Component firm Hella has released its financial figures for the first half of the financial year, revealing a significant drop in sales and earnings. 

From 1 June to 30 November 2019, Hella recorded a decline of 3.2 percent in currency and portfolio sales, and 6.7 percent in reported consolidated sales – a drop it attributes to the sale of its wholesale arm in 2018.

The sales shortfall resulted in a loss of €39 million (£33 million) year-on-year, with pre-tax earnings posted at €257 million (£220 million). Hella said: “This substantial reduction is largely due to extraordinary income booked in the prior year from the sale of the wholesale business.” 

READ: NEIL GRANT IS NEW MD AT HELLA

Another factor was a global reduction in new vehicle output. Hella sold 1.6 percent less products to vehicle manufacturers compared with the same period in 2019, but notes that it still “managed to outperform the broader market primarily based on strong demand for electronic products, particularly in energy management and sensors, and on strong business in the American market”.

The firm’s aftermarket division also suffered last year, with weakened demand in South West Europe and the Middle East contributing to a €13 million drop in reported sales. Sales to workshops were down as well, although the company considers this a result of especially strong sales in 2018, when a wave of new regulation was introduced.

Profitablity in the aftermarket was, however, improved, with cost optimisation strategies bringing pre-taxearnings up to €29 million from 2018’s €25 million. The operating profit margin was 9 percent, compared to 7.6 percent the year before.

READ: MAHLE AFTERMARKET ACQUIRES BEHR HELLA SERVICE

Commenting on the report, Hella CEO Dr Rolf Breidenbach predicted that recovery will be a long process. “The market environment remains very challenging. A strong, sustained recovery is not likely to emerge in 2020,” he said.

“However, we are still reaffirming our annual targets. We will vigorously capitalize on the current phase of market weakness to improve our competitiveness and continue investing in innovative solutions for the market trends of electrification and autonomous driving.”

 

Posted in Factor & Supplier News, Garage News, Latest News, latest news, News, Retailer NewsComments (0)

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USING TECHNOLOGY TO BOOST PROFITS


Paul Black –  We all know that aftermarket deals are closed with a firm handshake and a game of golf… but is this a very old fashioned methodology?

Paul_BlackNew car registrations are up, used cars are changing hands quickly and the parts and service aftermarket is generally in rude health with the sector being worth hundreds of millions of pounds to the economy.

Nonetheless, we would be wise to remember that the sales process is for the greater part, guided by salespeople. In recent years, we’ve seen a radical (and necessary) shift in mind-set and methodology. A chap named Ken Krogue describes a technique known as ‘inside sales’ which he describes as “professional sales, done remotely or virtually.” It’s not a one-and-done script reading process conducted from a call centre: it’s about nurturing a positive, productive, and mutually beneficial business relationship – with the very real possibility that neither client nor employee will ever meet in person.

This may well sound at odds with the traditional practices of the automotive aftermarket, where face-to-face meetings have for so long been the dominant approach to sales. Nonetheless, inside sales strategies have a number of advantages over the field method. Here are just a few:

UNBURDENED SALESPEOPLE
Being a salesperson in the aftermarket is by no means an enviable position. It often involves flitting from client to client and place to place, struggling to fit meetings, admin, research, and training – amongst many other things – into an overstuffed itinerary. A lead that turns out to be a dead end can add up to hours of wasted effort.

The inside sales method is designed to minimise physical effort wherever possible (bar the great exertion of picking up the phone or using the keyboard). The idea is that, upon finding a viable prospect,the salesperson should have the time they need to prepare and strategise: they shouldn’t feel like they’re reheating a sales pitch because they’re overburdened with unprofitable tasks, and they shouldn’t feel like they’re giving undue attention to timewasters – possibly the automotive industry’s single greatest scourge.

By using technology to automate essential but time- consuming administrative work, the salesperson can concentrate on solid leads and give them the attention they deserve. Databases allow them to access fresh leads with relative ease, and with a variety of communication methods available, some analogue (there’s a lot to be said for a good old-fashioned phone call), some digital (someone out there is undoubtedly already selling via Snapchat), it’s easier to reach a wider range of customers within the automotive supply chain.

POWER TOOLS
Of course, the humble database is but one weapon in the inside salesperson’s arsenal. Using the right tools, it’s possible to take pre-emptive action.

Technology makes it possible to gain visibility into up selling and cross selling opportunities – on a macro and micro level. If a customer typically buys hubcaps and tyres together, for example, the system may recommend offering them as a package deal. If there’s a wider, seasonal trend for a certain kind of vehicle or accessory, the system will let you know how to capitalise on it.

Whether they’re attempting to begin a relationship, preserve it, or take it to the “next level”,the inside salesperson uses technology wherever they can. It’s far less awkward than the in-person hard sell – and far more effective.

LONGEVITY
We’ve all been there: someone walks up to you, shakes your hand, asks how you’re doing, how the kids are, whether or not you’re all caught up with your favourite TV shows…and you draw a total blank. You can’t connect their face to a name. All you can say is “Hello…you.”

For the average person, it’s a bit awkward. For the salesperson, it can be lethal. The face-to-face approach requires you to mentally juggle faces, names, preferences, habits, and inside jokes. You have to know milestones and data points: when a customer likes to buy; when they don’t like to be bothered; how many kids they have and how old they are. Building customer loyalty quite literally depends on it – especially for a small dealership, where larger, predatory competitors tend to siphon most new business.

The inside salesperson uses technology to sustain long-term relationships. A good CRM will be able to provide quick, convenient access to vital information about existing and potential customers: behaviours, preferences, and more. If customer X buys tyres for their car every winter, you’ll have the opportunity to offer them better rates and add-ons, thereby giving them an incentive to keep buying from you. If Customer Y doesn’t respond to texts, but enthusiastically buys brake fluid and engine oil after mid – afternoon phone calls, you’ll be able to act on this information.

The field methodology survives – albeit in diminished form – because the sales profession is historically technophobic and a little self-romanticising. Deals have always been secured with a drink and a handshake. Why mess with a winning formula?

It’s true that the human touch is still important. Inside sales isn’t going to change that. Modern consumers, however, are a little different, and they expect a little more. They’re technologically equipped, they do independent research, and they see no need to meet you in person if they don’t have to. They’re suspicious of rehearsed, artificial sales pitches: they appreciate a little care and personalisation. Inside sales, when augmented by the right technology, is one of the most reliable ways to provide it.

Posted in CAT Know-How, Factor & Supplier News, Garage News, News, Retailer NewsComments (0)

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