BERLIN -- Dealership by dealership, the Weller Group has worked its way into top ranks of the German retail automotive business over the past few years.
Despite static sales in 2008, the dealer group increased revenues by 4.2 percent to 830 million compared with 2007. But the company did not make a profit.
In an interview with Matthias Karpstein, a staff reporter at Automotive News Europe sister publication Automobilwoche, CEO Burkhard Weller talks about the financial crisis as well as rationality and irrationality in the industry.
How does a major German car dealer get motivated today?
During the summer of 2008, I would have had a hard time answering. But now things are getting better, albeit on another level.
We shouldnt expect to see 3.6 million new cars sold in Germany again anytime soon [the average new-car sales in Germany between 1996 and 1999 was about 3.6 million; last year it was about 3.1 million].
We know that now so I am not expecting any dramatic changes.
What were the most important measures that put you among the years winners?
We made the last big investment in 2007. In 2008, we got our bearings. That is an advantage in the current situation.
In 2009 and 2010, we have years of consolidation ahead of us. So we wont grow dramatically, but we wont shrink. We will grow 6 percent to 12 percent within the group, with the existing locations.
What specific changes will there be?
We will undertake significantly more benchmarking among the brands. Thats the way that we achieved an increase of 11.5 percent in the financial area last year.
We will proceed in the same way in our other areas. Its unacceptable that one operation makes a 300,000 profit and another breaks even in the same area, especially when the two operations have the same brand.
This year, the Weller Group is 30 years old. To celebrate, the company at one time planned to push revenues to a 1 billion. Are you still pursuing this goal?
We ended last year with revenues of 830 million. The goal for this year is 890 million. So we arent far from a billion. But revenues are not our main goal.
So you will concentrate more on profits? The Weller Group went into the red in 2008 for the first time.
Yes. For five years, we went full speed ahead on revenues. In the process, we didnt completely lose sight of profits, but its normal that profitability takes second place during growth phases.
Now we have that behind us. And if things arent going as well out in the market as you would like, you certainly can move into a consolidation phase.
When do you believe that you will complete this consolidation phase?
In 2011, we will go back on our growth course again. But we dont live on an island either, and it has not been lost on us that the business has become much harder. Profit margins are under greater pressure.
For two years, your sales figures for Toyota and Lexus have been in decline. Now Toyota is bringing a total of six new models into German showrooms this year. What do you expect from this model offensive?
What a blessing! After months of waiting, we have new-model introductions. Two years without anything new was frustrating. You need to motivate the team. After three tough years, we are significantly above expected incoming orders at the moment.
Right now, everyone is talking about the automotive crisis, but opinions vary greatly about what the starting point of the crisis was. Where do you see it?
We would have had an automotive crisis without a financial crisis because we produce an excess of 3 million to 7 million cars a year worldwide. There had to be braking at some point.
Now the crisis has been accelerated by other influences, but it would have come anyway. Perhaps not so brutal, but it had to be this way to help matters.
What automaker would have scaled back production without this pressure? No one would have willingly cut back by 10 percent or 15 percent. That is really a dream!
So are the current events helpful in the mid-term?
Not just in the middle term. They will help us very soon. When the customer comes back to get his dream BMW, he can take it from April production. Then he wont get it with a 15 percent rebate any more. Period.
Will the crisis teach automakers a lesson or will the madness of overproduction quickly begin all over again?
The madness is entirely normal and sets in again and again. In that regard, I dont even exclude myself.
All the rationality that people display in a slumping market, they quickly abandon in better times.