Manufacturers want internet sales”

Manufacturers want internet sales”

Motor vehicle economy: Professor Ernst, you recently presented a study together with OGM boss Wolfgang Bachmayer that shows how and where Austrians buy their cars. What role does digitalization play?
Burkhard Ernst:Retailers have already embraced digitalization. Most of the dealers' offers are stored on various online platforms. This means that there are no longer any classic, local boundaries. This is both a blessing and a curse, as customers can compare prices more easily and transparently. On the other hand, new customer groups can be developed. But despite digitalization, something becomes very clear: the more specific the car purchase becomes, the more customers rely on personal contact, personal advice and personal service.

You are a big skeptic of e-mobility. They recently said that this was only a “temporary phenomenon”. What comes instead?
If I knew what was coming instead, I wouldn't be sitting here. (laughs) To be honest: I don't think anyone currently knows what the automotive future will look like. When it comes to e-mobility, our study showed that only 2% of those surveyed are determined to buy an e-car in the next two years. Another 5% said they were “likely” to buy. This shows that although electric cars are a big media topic, the purchase intention is very low.

Why isn't e-mobility taking off?
There are several reasons. Firstly, the high price – a comparable petrol or diesel model costs significantly less. Then politicians remain silent about the problems of battery disposal. And in addition to the high purchase costs, there is also expensive battery leasing because the batteries only last around three years. And then the question arises: Who will trade in an electric car after a few years? Not us. Because if the battery has to be replaced, this represents a total economic loss. Uninteresting.

Why are the big manufacturers relying so much on electric cars in the media?
That's quite logical: it's about fleet consumption. E-cars help manufacturers achieve their fleet goals.

But manufacturers also have to sell the cars to reduce the cut.
There are enough municipalities, fleets and public institutions that want to create a green, clean image with electric cars. Huge amounts of tax money that citizens have laboriously paid in are wasted. And all in all, we know that the environmental footprint of an electric car is anything but green.

Let’s talk about the tension between importers and dealers. Will there be a further thinning out of dealer networks? This is always denied to us by importers.
I would like to quote Ferdinand Fischer, Chairman of the Two-Wheeler Trade Committee, from the last committee meeting: "Manufacturers who need dealers constantly come to me. I always say: But we don't have any dealers who can meet all your requirements." This affects the two-wheeler trade, but can be transferred to the domestic car trade by an order of magnitude higher. So back to your question: Yes, unless there is a rethink here, there will be further thinning. In the long term, manufacturers naturally want to handle sales themselves via the Internet. This saves you the hassle of discount battles, because if you order something from Amazon, for example, you can't haggle.

How fast will this happen?
If I look at the current dealer contracts, this will happen very quickly.

And the service remains in the car dealership?
Naturally. Delivery there will then cost 50 or 100 euros. But we dealers are still good enough for advice theft and possible test drives. And of course the aftersales business. However, appropriate passages in the dealer contracts ensure that only original spare parts may be sold. This happens purely by chance with the calculation of margins and bonuses so that traders cannot afford any deviations.

At the same time, you said: "No one is forced to run a car dealership. If it doesn't pay off, then you have to close it." You were criticized within the industry for this. Do you still stand by that statement?
Yes, of course. Nobody is forced. But I understand many young people who don't want to take part in the theater. Taking out millions in loans only to be unable to make independent decisions and only feel pressure. Why?

Will you stand for election again as a Viennese committee lobbyist?
Yes, I will compete.

Behind closed doors, we hear from some in the industry that the Vienna regional organization has it quite easy with the Rosam agency, which also costs a lot of money. How much does the agency cost per year?
As a state committee representative, I would like to support and represent the interests of our members in the best possible way. This also includes professional communication and PR work. We have therefore been working with the Rosam agency for many years. Grünberger Change Communications, who provide us with excellent support with their expertise and professionalism. And just this much about the fee: It's a lot less than rumored. And of course those who sit on the committees know it.

Let's talk specifically about the Rainer Group. They are giving up the Megastore Nord, one of two locations in Vienna. Why and why now?
In general, because with the 12-hour day we have experienced a change in the law that enables new developments. Starting next year, we will work a 4-day week with 12-hour days at our southern location (Wiedner Belt) in order to be open longer for our customers. I think this is an innovative idea because I see no reason for two car dealerships in Vienna due to increased customer mobility. I was also able to get the property in Donaustadt rezoned, which means we will build around 150 apartments at the location.

Because the real estate business is much more attractive?
Yes, of course. And above all, significantly more sustainable. You build the apartments once and rent them out for the next 100 years. Especially since the general conditions in the automotive trade are not such that we would be prepared to invest several million euros in new showrooms and business premises.

How will the reduction from two car dealerships to one affect sales, revenue and earnings?
First of all, we have to carry out a series of renovation work at the southern location and in the organizational structure. We will take over all employees and move into the remaining location. The 12-hour days mean we have longer opening hours and can therefore do more work per day. We have been selling around 1,000 new cars per year for years. I assume that there will be no loss of business as a result of the location merger. Thanks to its proximity to the main train station, the southern location offers faster, better transport connections, both by car and by public transport.

Their two main brands are Mazda and Yamaha. How satisfied are you with the collaboration?
Look, I've been doing this with Mazda since 1975, so it doesn't need any further explanation, does it? (laughs) Regarding Yamaha: Their business interns are not entirely clear to me, especially since the managing director, Mr. Zimmermann, has said goodbye. What I can say, however, is that the two-wheeler business is going well, both in terms of sales and after-sales. But my nephew (note: Maximilian Lemberger) is responsible for all of this.

Will the Rainer Group still have an automotive business in ten or 20 years?
Who knows what will happen in a decade or two? The fact is: it started with the automobile trade, those are our roots, there is a lot of passion in it, otherwise I wouldn't be able to carry out my chamber function in the same way. But a lot depends on how stationary car retail will develop. I can reveal this much: At the moment we are not thinking about giving up the car business.