Reading Beyond the Data to See the Bigger Picture
By Desiree Homer
Automotive News recently shared an insightful article about one of the world’s largest automotive suppliers, Bosch. The company had announced some dismal numbers, including a 44% decline in annual profits. While those data points in the moment seem doom and gloom, there is more to them. In fact, there are long term trends that point to Bosch being in an upward trajectory, despite the 2019 recap.
As a franchise dealer, how you interpret data can present similar opportunities to find positive trends. It’s critical for dealership owners and managers to know and analyze the short-term stats. But, being able to step back and review those numbers through a different lens altogether, can offer a longer, often different perspective.
Bosch Announces Significant Declines
As Bosch discloses their year-end decline in operational revenue, they discuss past struggles. Over the last year alone, the company laid off 6,800 employees. Executives shared the profitable declines have been ongoing over the previous two years and predict 2020 will follow suit as a third straight year of dropping margins. Overall, the company cites production is down a whopping ten million units from 2017. It may sound grim, but it’s not all bad.
Re-examining the Numbers to See Beyond Slump
Take these numbers into perspective, and in comparison with more than just the last few years, and with the industry as a whole. For example, Bosch may have profit declines, but the overall global growth has slowed too, since 2017. When the industry itself if experiencing an overall slump, it only makes sense that one of the largest suppliers feels that loss a little harder than others within the segment.
Looking at Bosch directly, even with recent deficits, it is a growing and successful company. Executives predict only 89 million vehicles will be produced this year. Those figures might be lower than those of recent years, but it’s still more than twice the production number of 2000, of 41 million. Going beyond the present figures, it’s clear the industry is and has been growing for the last 15-20 years.
Interpreting Numbers at the Dealership Management Level
You measure and analyze your KPIs routinely, usually weekly, monthly, and year-end. Your immediate data may present much like the Bosch announcement. Numbers may be down in the moment, but is it a direct reflection of your operations? Or, are there industry trends that affect everyone? You may find a decline in sales for a month-end, is far less than the impact of others in your area. Because you have a seamless operation strategy and platform, recessions might hurt you less. If your profits are strong and continue to grow, it’s equally important to consider whether you’re leveraging a strong strategy now, or you’re finally catching up to local market trends.
Consider the Potential Contributing Factors
When you hear about giant automotive suppliers, like Bosch, reporting revenue loss, it doesn’t mean the future is doomed. Thinking about long-term trends can help position the thinking to the prosperity ahead. For example, the world population continues to grow exponentially. All those individuals will eventually need cars. Nay-sayers point out the surge of ride-sharing and autonomous vehicles. However, these consumer trends really only change how people need their rides; it doesn’t imply they won’t need them anymore. The industry landscape may shift, but it doesn’t mean the automotive industry will become less of a necessity. The key is recognizing that everchanging environment and make the necessary adjustments in operations, to adapt and succeed in the new and emerging trends. Read beyond the numbers of the moment to anticipate the big picture successes, too.