The 7 little dwarfs and the buy back program

#asianeconomiccrisis #genuineparts #lifeguard

ONETeam #SNAPS #SageandNotableAdvisesfromPatrickSalazar

During the Asian Economic Crisis (AEC), the automotive industry and our dealers around the country were extremely concerned because several companies around Asia closed shop. Our dealer principals shouted "Help! We are drowning!"

Sir Vir† who was our AVP Marketing at the time, created a 3S Special Projects Team with representatives for Sales, Service and Spare Parts (which I represented) departments. I can vividly recall his calm low-toned voice saying..

“Do whatever it takes. None of our dealers will close shop!”

The first thing we did was to align on our overall attack & defense strategy. Yup, that was how called it! For the none automotive folks… from a Distributor’s perspective: Manufacturing Dept greatly helped reduce the cost of assembling brand new vehicles. Sales Dept sharply dropped the distributor’s margin to save the dealers’ margin. Service Dept is a critical support department but with no revenue. My Spare Parts Dept is revenue generating and we also dropped our margins sharply to save our dealers’ margin.

Here are two of the several “out-of-the-box-CRAZY” programs me and my Team led.

🚗 7 little dwarfs - Jobbers are the natural competition of our dealers & genuine parts. I invited the 20 biggest Jobbers to meet with us. Only 7 attended at Anabel’s Restaurant in Quezon City which is why the project codename was such. We agreed they will stop importing fast-moving parts and in return, we will give them bottom prices when they buy genuine spare parts "from our dealers". We also gave them the same accommodation for medium-moving parts. The distributor absorbed the full discount. I recall the 7 Jobbers said the others did not attend in fear that it may be a trap coz they were heavily importing parts from the black market. Due to the AEC, we declared a ceasefire "only" with the 7 dwarfs. 🚓

🚗 Buy-back Program - The distributor bought back all non-moving parts from our dealers at cost. When any of the nationwide dealers or the 7 dwarfs needed it, the distributor sold and credited the sale to the dealer source. The distributor absorbed the logistics and full discount to keep our dealers’ margins steady.

I was invited to speak during our 1998 Asian Parts conference in Kuala Lumpur to share over 10 best practices that we implemented in the Philippines.

At the end of the AEC… “zero” of our nationwide dealers closed. We were able to save them all.

*About the video

This photo beside a Lifeguard post was taken during one of our family vacations in the breath-taking Bantayan Island Cebu.

Lifeguards rescue and save people who get into difficulty of drowning.