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A good product line isn’t everything

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Don’t Drink And Write

When I was filing my motoring website’s monthly industry sales report last week, I couldn’t help but think that the automotive business is indeed a product-driven one. The brands that presently have the best vehicles tend to perform well sales-wise. But these best-sellers come and go. It’s a cycle.

There was a time Hyundai models sold like hotcakes. The automaker at one point had the most compelling offering in practically every segment of the market — from mini hatchback to midsize SUV. Before the Korean manufacturer’s emergence, Honda had been the flavor of the moment — the CR-V, the Civic, the City and the Jazz all took turns being the Filipino’s dream car.

This more recently also happened to Subaru and Mazda, when virtually all of their cars were the best in their class in terms of styling and engine technology. And who can forget Ford? The American brand reached third place overall behind only Toyota and Mitsubishi in 2015, reflecting its strong vehicle lineup at the time.

Right now, it’s Nissan’s turn. Benefiting from attractive and competitively priced cars like the X-Trail, the Navara and the Urvan, the brand leapfrogged both Ford and Honda last month to seize fourth place in the local industry’s year-to-date sales rankings. And it’s gaining such momentum that it isn’t hard to imagine the Japanese firm catching and overtaking Hyundai for third place, especially with a popular new midsize SUV in the Terra. But for how long can Nissan sustain this?

In the years I’ve been filing these sales reports, there’s an unmistakable truth I’ve noticed: Excellent product lines propel brands to the top of sales charts, but they come in waves. It’s nearly impossible to have a great car stable all the time. It’s easy to always have at least one outstanding car. But to have four to five irresistible offerings that trump the competition at the same time? That’s almost a stroke of luck that is often beyond the control of the local distributors.

Let me use poker as an analogy. Getting one great car is like getting a king or an ace. Getting four more fantastic vehicles would be the equivalent of getting dealt a flush or a full house, depending on their appeal.

Now, if you play poker, you know you will never get a straight or a flush or a full house every single time. They come at intervals. Sometimes they never come at all. You might get lucky in two or three consecutive deals, but trust me, you will always get a hand that is so bad you’ll forget how to spell “bluff.”

And so, over a five-hour session, it’s not the player who occasionally gets a straight flush that goes home with the chips. A sporadic winning hand will not guarantee anyone the victory. You know who always wins in the end? It’s the cunning, patient individual who plays the long game — the one who doesn’t bet recklessly in spurts but strategizes to consistently position himself for a most ideal strike.

What am I saying here?

Having a good product line is awesome. It will always result in eye-popping sales numbers. The pitfall I believe many distributors fall into is the tendency to rely entirely on products, completely forgetting the other aspects of their business — chief of which is after-sales service. They fail to understand that there are other factors that contribute to the strength of their brand, perhaps even more so than a handful of nice-looking cars ever will. Customer service, parts availability, quality of technical work, showroom appearance — these are the things that truly matter in the car business. These are the elements that are within the player’s control. You don’t need a full house of a product line to deliver them. You don’t have to wait to be dealt a superb stable of cars to provide them to your customers.

I think that’s where Toyota pummels everyone else. Its cars are generally vanilla. Save for the 86 and the FJ Cruiser, I don’t remember swooning over a Toyota model in the last five years. But they get everything else right. In the long run, that’s what counts in making customers return year after year after year. Owning 40% of the market is proof of this.

Superior cars come and go. Superior customer service doesn’t have to.