Sunday, November 19, 2017



This year the Australian automotive industry has seen three highly-experienced, energetic and successful CEOs dismissed from their posts. I'm charged with the energy to ask what is going on?

All three earned the respect of their peers, car dealers representing the franchises, and the automotive media.

It appears to me that all three have lost their jobs because their plans for their company's future, whilst unusual and surprising, may well have turned out to be too rational and successful. And, not in line with head office thinking.

The men I am talking about are Richard Emery (Nissan Australia); Kevin McCann (Volvo Australia); and Justin Hocevar (Renault Australia).

RICHARD EMERY did something unthinkable. He laid the groundwork for Japanese 'Loss-of-Face' by suggesting that Nissan Australia needed to stop offering slow, or low-selling Nissan passenger cars - and instead focus on its successful light trucks and SUVs.

His thinking was that these high margin vehicles could make real profits for Nissan, whilst continuining to spend wasteful dollars trying to sell passenger cars in a volatile market, was a hiding to nowhere.

Once the chief of the Renault-Nissan-Mistubishi Alliance, Carlos Ghosn, was made aware of Emery's strategy, he was gone. In the blink of an eye.

How could Nissan possibly face withdrawing its passenger cars from the Australian market, when its competitors Toyota, Suzuki, Subaru and Mazda, would continue to be represented?

No matter how sensible Emery's plan, it was never going to fly. So Richard was dumped and replaced by a long-standing Nissan executive, who will do what he is told by Tokyo.

KEVIN McCANN, previously CEO of Volvo Australia has suffered the same fate, but the circumstances are slightly different.

Like Richard Emery, Kevin McCann is highly experienced and has worked for some of the leading automotive companies in Australia. He has an impeccable track record, but the problem was always going to come down to numbers.

Despite inventive and innovative marketing plans, Kevin failed to reach acceptable numbers fast enough. The fact that he and his team had to overcome ridiculous odds, and targets which failed to reconcile with the state of the Australian passenger vehicle market, he had to go.

Volvo Australia has never recovered any consumer respect after the ill-thought-out 'Another Bloody Volvo' ad campaign. Rebuilding faith in Volvo's reputation, and launching new, high quality vehicles was an uphill task in a market where 64 different vehicle brands are fighting for oxygen.

Volvo sits in a difficult segment, which is highly competitive, driven by marketing spends, and subject to extreme and volatile shifts in consumer preferences.

The fact is that none of the European brands' managements - sequestered in their comfortable European head offices - understand just how hard it is to compete in such a highly competitive environment, 16,000km away.

JUSTIN HOCEVAR'S  dismissal is a complete mystery to me. I recently interviewed him and found him to be smart, insightful, honest and down to earth. Maybe, like Emery and McCann, that was his problem.

Renault Australia exists in a very unsual segment - the 'Australians-who-love-French-cars' segment. It's tiny, and the battle is only against French brands like Peugeot and Citroen (which endure similar problems), plus the very competitive Korean brands.

So Justin began to whittle the range of offerings down to models which would enjoy a point of difference in the market, retain their margins, and sell with (really) modest advertising and marketing campaigns.

Guess what? It wasn't enough to satisfy Paris. The French suits were probably suffering from the same Loss-of-Face issue that the Nissan executives had to come to terms with.

So the lesson here is: You can keep your job if you do what you're told, regardless of whether it makes any commercial sense. Does the phrase "Throwing good money after bad" resonate?

The answer is simple, and I have first-hand experience of the mindset. The European managements have no idea what happens in the Australian market. They do not bother to identify the issues which face them in such an intensely competitive market. They treat it like a problem which remains at arm's length. The CEOs they've appointed just need to get on with it, and deliver the expected results.

Well, duuh!

They keep changing CEOs, and end up with the same result. Will the lightbulb moment ever come with these wankers?

Sadly, not.

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