bc hdwt update[1]

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Competitive Environment GM,Toyota,Ford and Dodge all have new pick up trucks – Volume leader for domestics Retaining pick up truck market sales and maximizing new opportunities are key to success All players are becoming more aggressive Domestics are reducing fleet sales while Nissan and Toyota are increasing. NFC – great opportunity to help bolster volume. Toyota sales increasing in market while other non GM are not

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Page 1: Bc Hdwt Update[1]

Competitive Environment• GM,Toyota,Ford and Dodge all have new pick up trucks – Volume

leader for domestics

• Retaining pick up truck market sales and maximizing new

opportunities are key to success

• All players are becoming more aggressive

• Domestics are reducing fleet sales while Nissan and Toyota are increasing.

• NFC – great opportunity to help bolster volume. Toyota sales increasing in market while other non GM are not

Page 2: Bc Hdwt Update[1]

Market Detail

• RL Polk – Largest year over year decline in 2007 was from large fleet customers

• NFC as a percent to total increased from 66% - 69.4%

• In GVW 3 individuals registered over 50% of the units

• Small fleets/NFC drove the business for the first 9 months of 2007 Large fleets were out of market

• Non Fleet Commercial market is stable and not as volatile as large fleet

Page 3: Bc Hdwt Update[1]

Industry Segment Size

Page 4: Bc Hdwt Update[1]
Page 5: Bc Hdwt Update[1]

Full Size Pick Up Registrations (DEC 2005 – 2007 CYTD)

      CYTD Retail Registrations          

  GM Y-Y Change Ford Change Dodge Change Toyota Change Nissan Change

2007 584,149 -3% 408,409 -20% 284,198 -6% 167,603 48% 53,103 -15%

2006 603,651 -10% 509,493 -15% 303,431 -9% 113,521 0% 62,681 -16%

2005 673,484  602,637  335,085  113,479  74,909 

  Note 52,219 of these customers were business use customers registering in name    

      CYTD NON Fleet Firm Registrations        

  GM Change Ford Change Dodge Change Toyota Change  Nissan  Change

2007 118,781 2% 81,168 -11% 24,352 -9% 16,209 91% 1,908 -21%

2006 116,586 -3% 91,679 -11% 26,698 5% 8,489 3% 2,406 -20%

2005 120,207  103,310  25,309  8,222  2,989 

     NFF Percent to Retail            

2007 20%  20%  9%  10%  4% 

2006 19%  18%  9%  7%  4% 

2005 18%  17%  8%  7%  4% 

 Business Use at 29 % when adding in individuals registering in their name      

      CYTD Fleet            

  GM Change Ford Change Dodge Change Toyota Change  Nissan Change 

2007 103,096 -15% 122,269 1% 32,618 1% 5,299 57% 5,646 108%

2006 120,994 7% 119,429 6% 32,264 7% 3,377 34% 2714 17%

2005 112,910  112,414  30,126  2,529  2,314 

Page 6: Bc Hdwt Update[1]

December CYTD Registration

RETAIL FULL SIZE PICKUPS

0

200,000

400,000

600,000

800,000

GM 584,149603,651673,484

FORD 408,409509,493602,637

DODGE 284,198303,431335,085

TOYOTA 167,603113,521113,479

NISSAN 53,10362,68174,909

200720062005

Page 7: Bc Hdwt Update[1]

December CYTD Registration

NON FLEET FIRM PICKUPS

010,00020,00030,00040,00050,00060,00070,00080,00090,000100,000110,000120,000130,000

GM 118,781116,586120,207

FORD 81,16891,679103,310

DODGE 24,35226,69825,309

TOYOTA 16,2098,4898,222

NISSAN 1,9082,4062,989

200720062005

Page 8: Bc Hdwt Update[1]

GM Business Choice

Page 9: Bc Hdwt Update[1]

Business Choice Metrics – 2007 Volume

• Over 3 million customers to date

• Over 250,000 units sold – 10% incremental (25,000 units)

• Roughly 171,000 of the total deliveries were pickup/chassis cabs

• Significantly improved GM non fleet pick up market share to become pick up leaderLead NFC at 41 % - was 26% at inception (94) Incrementally consistently above 10%

Page 10: Bc Hdwt Update[1]

Business Choice Metrics – 2007 Financial

• Over $2 billion in net contribution margin

• Average cost $625. Total $156 million • Net contribution of 25,000 incremental units $225

million

• Incremental sales covered cost of program plus left $69 million in additional profit

• Lowes and Best Buy contributed $800,000 in marketing funds plus value of communication assets

Page 11: Bc Hdwt Update[1]

Why is Business Choice So Effective?

• Branded Easily communicated, reinforcing its importance Not hidden in other divisional programs and communications

• Customer Perspective Positive perceived value Relevant and motivating offers that last

• Financial Perspective Lower incentive cost providing “more for money” resulting

from enhanced partner discounts

• Increased customer exposure utilizing partners communication channels, financial resources and assets

Page 12: Bc Hdwt Update[1]

Lowe’s Asset Wheel

Page 13: Bc Hdwt Update[1]

2006 Pilot2007 FTC

Page 14: Bc Hdwt Update[1]

Hard Day’s Work Tour

• Objective Help launch Silverado/Sierra -TX pilot Help launch the Heavy Duty Silverado/Sierra and HHR panel - FTC Take the Business Choice to the customer in environments that are relevant and

non threatening Sell key products and document sales Leverage unique marketing opportunities

at key job sites Blunt Toyota Inroads

• 80 Events TX Pilot - 125 Events FTC

(Lowe’s, dealerships and job sites) Texas attendance 4,000 FTC attendance 70,000

• Lowe’s contributed

$450,000 (pilot) - $650,000 (FTC)

Page 15: Bc Hdwt Update[1]

2007 Hard Day’s Work Tour

• Traffic Drivers FREE Food, beverage, tool giveaway 2 GMC – 1 Chevy Vehicle sweepstakes $500 Onsite Certificate TX pilot $250 Onsite certificate FTC

• Tour Sales 25% return TX pilot – 15% return FTC 1,000 units in TX pilot, 5,000 in FTC