Your Daily Dose of Business News – 05 Jan 2017

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For today’s Daily Dose of Business News, I will be discussing about the “Record 2016 for U.S. Auto Industry; Long Road Back May Be at End

Going through the said news. It discusses about the record year of 2016 where car manufacturers have reached such a milestone. They have overtaken the previous years’ sales in units of their cars. Though it calls for a celebration, there’s a catch to it. The number of units sold were greater but manufacturers went as far as giving too much discounts on the sale of cars.

If I would be asked if this brings any good news, I would definitely say that this isn’t. If manufacturers are able to sell more than before, then they should be happy but the ones who were only happy on these scenarios are the sales agents. They have sold more than last year, 2015, that means more commissions for the agent, yet, manufacturers are even forced to give bigger discounts than the preceding year. Looking at it on the bigger picture, car manufacturers didn’t benefit at all. Some would even have to cut or change their production plans and layoff jobs just have a better profit as compared to the previous year.

The units being sold are on its peak and yet, the decisions being taken by management of these firms are telling a different story. Is the car manufacturing industry as profitable as it was before? Why do they have to layoff their employees? Why are they giving such amount of discounts? Why are they changing their production plans rapidly that they want to cater immediately with the market demands? Why are they so eager to grab a sale? Is it still safe to invest in the car manufacturing industry?

There are the questions that must be answered by the manufacturers. Yes, everybody needs a vehicle these days to go to and from where ever we wish but is there really a growth? As I look at it, I only see aggressive selling methods that went as far as giving too much discount. Yes, every business needs a sale and cars are very hard to sell, yet projections and targets of these manufacturing firms aren’t getting realistic. Seems to me that they are now gearing toward continuous growth rather than preparing for the fall. I do hope that those who have lost their jobs would be able to get new ones. I do also hope that manufacturers be able to rebound this coming year ahead not only in units sold but rather on their bottom line. Thanks for reading!

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3 thoughts on “Your Daily Dose of Business News – 05 Jan 2017

  1. let’s take a look at the Philippine setting.
    Here, we have this thing called Release-on-paper (ROP) sales wherein the vehicle sales invoice is dated at an earlier date when in fact the car is released at a later date. This is done for car registration purposes. Here, some sales agents get their commission for the said sale while there are instances that the sale is cancelled at a future date. Of course, the agents wouldn’t return the commission to the company.
    Also, when you buy a car, accessories are given free to the customers. But, most of the time, customers pay for the said accessories, although the money head straight to the agents’ pockets and not to the company.
    Sometimes, problem also arise from monitoring of inventory especially for ROP sales and interdealer sales

    Like

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