For decades, General Motors and Ford Motor Co. duked it out for the title of top-selling automaker in Canada. Last year, for the first time, Fiat Chrysler Canada claimed the crown.
Mike Woods had a front-row seat for the upset. The third-generation dealer is vice president at Wellington Motors in Guelph, Ontario, sharing management duties with his father, Ted, the company's president. The Chrysler-Dodge-Jeep-Ram-Fiat store sold nearly 1,000 new and 350 used vehicles in 2015.
Woods, 47, spoke with Jennifer Vuong, anchor and producer of Automotive News TV's "First Shift," about Fiat Chrysler's record run last year, the importance of offering customers value and the prospects for this year's sales race.
Q: How do Canadian and U.S. buyers differ?
A: I've never worked in the States. But from what I see, Canadian buyers are still truck crazy and SUV crazy like in the States, but to a lesser degree. We definitely sell more smaller vehicles. I like to think Canadians are maybe a little more practical than I perceive Americans to be. So we're more apt to have smaller vehicles. I see it especially in Quebec, where there's more of a European influence.
How much of your business is minivans?
We sell 30 percent minivans, and then 30 percent trucks, then 30 percent SUVs.
Why are minivans so big in Canada?
We're still very practical -- have to take kids to hockey every weekend and they do their job. And there's definitely a fair difference in price. We're really excited about the new minivan coming out. But I think there will obviously be a big price difference between the new minivan and the old minivan because the technology [in the new Chrysler Pacifica] is looking to be incredible.
There will always be a market for that old minivan. Here in Canada we sell it for $19,900. Which is crazy because that's what we were selling them for 10-15 years ago. The price hasn't changed on them. So it's great value.
Will you lose customers with the new Pacifica?
If the new van is $5,000 or $6,000 more, some of those customers may gravitate to a different vehicle. But Chrysler in Canada has done a great job of finding loopholes, so to speak, where they can price something that's really attractive. They've done it with the minivan. They've done it with the Patriot, which has been a real hit for a vehicle that's in the last year of its life cycle, where they've priced it aggressively with a lot of equipment. Despite the older technology, we sell a lot of them because customers like value.
Explain how the exchange rate affects your used-vehicle supply.
The exchange always creates a push-and-pull situation at the border. So when the Canadian dollar was really high, we saw the reverse where Canadians were going to the States to buy new vehicles. Dealers were going into the States to buy used vehicles to bring them back.
Right now, it's the reverse where we are seeing a lot of Americans come up here to buy used vehicles at the auctions. We're seeing a lot of Canadian wholesalers taking vehicles to the States to sell them there. So it's driven the price of good used vehicles, which are always hard to find, up. So in particular, trucks and SUVs -- a lot of times you can pretty near wholesale them to someone who's going to export them for about the same as what we can retail them for to a used-vehicle customer.
We haven't been involved in that. I don't like that part of the business. I would much rather retail the vehicle and get a customer. I need as many customers as I can get.
But there are definitely a lot of dealers out there doing a lot of business wholesaling these vehicles into the States and making a lot of money. It's going to be a short-term thing. It's not going to be a business model that's going to last a decade or longer.
What are your thoughts about Canadian car czar Ray Tanguay?
I think it's an important position that they've named. I think they named it 10 years too late, unfortunately. A lot of that manufacturing has left. And I don't think it's going to come back.
Canada, much like the States, has seen an exodus of manufacturing to Mexico, and it's not going to come back. We had such a great manufacturing base 10-15 years ago. And we let that edge go, for lots of different reasons. There is a perception of [manufacturing here] being higher cost, through taxes and labor. The dollar changing wildly, I'm sure, has not been great. So it's really too bad. Because those were great jobs, great paying jobs. And like most things in life, you don't appreciate them until they are gone.
I think now, a lot of Canadians, a lot of employees, you know, regret that. And the government in particular now, I think, is regretting that they didn't care for that more.
How did Fiat Chrysler become Canada's sales leader last year?
There are a couple of different things that have come together at the right time. Chrysler has a great product lineup. Within that product lineup, they have some value leaders, which gives a real opportunity for sales volume.
We were close to beating Ford in 2014. I think that showed the dealers that it is possible, because it's a monumental hill to climb. Coming into the year, the dealers really felt that we could do it.
What was it like when Fiat Chrysler was working to be Canada's sales leader?
We've had lots of experience not being No. 1. I think Chrysler has been in Canada for over 90 years. So they have 89 years' worth of experience, and we [Wellington Motors] have 74.
There's always going to be someone who's always going to be bigger and better than you. You're never going to be the biggest kid on the block. We're fortunate this year to have accomplished that. But I'm not sure that either the dealers or Chrysler are necessarily concerned with being No. 1, as much as they are about being No. 1 for the right reasons and doing the right things. I mean you can be No. 1 and it can cost you.
Here at our store we talk about always doing things that are good for the long-term view of the store, so we'll never make a decision for short-term profit versus long-term gain. And I think Chrysler feels the same way, right?
Will Fiat Chrysler be No. 1 this year?
I think that they have an excellent shot at being No. 1 again. They're taking it on a month-to-month basis looking at what Ford is doing. And I think it's a friendly competition for sure. Right, there's a lot of pride involved. But I think their plan is to try and win each month and that will win the year. They've broken it down into 12 games, so to speak.
Our product lineup is not changing significantly. We'll have the new minivan. We'll still have the old minivan. We'll have a little bit of a lag with Journey, because of that plant switch-over. But I think with trucks and SUVS, the Ram and the Cherokee -- both excellent products -- I think that we have a good chance.