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Now the question is, do I buy it from you or do I go to a different dealer? -- Lindsay Duffield
Now the question is, do I buy it from you or do I go to a different dealer? -- Lindsay Duffield

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'You can't bluff customers' Add to ...

The only Canadian to head BMW Canada has left the company.

Lindsay Duffield ran BMW Group Canada as president and chief executive officer for more than 4-1/2 years, including its best sales year in 2007. When he stepped down on April 1, 2009, it was expected he would remain with BMW in another capacity. However, rather than move to Germany, he has decided to resign.

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Duffield came from the finance side of the industry, having been vice-president of operations for BMW Financial Services in the United States. Before that, he worked for Mercedes-Benz Credit Corp. and before that, for IBM.

Presidents of the German car companies in Canada are nearly always sent out from Germany on temporary postings and many seem to be cut from the same cloth. Duffield was certainly different with an easygoing personality and a general management background rather than a strictly automotive one. He says he hasn't decided whether he wants to stay in the automotive industry.

Vaughan: The automotive business is peculiar. The highest praise is to say 'He's a real car guy, and the worst thing to say is, 'He's not a car guy.' As if that's the only qualification.

Duffield: I wasn't thought to be a car guy, although I've loved cars from the time I could roll my little Dinky toy across the floor. I certainly didn't come up from the car industry as a car guy.

I think that's a problem in all industries, not just automotive. Industry is too incestuous. It's like when I went from IBM to Mercedes Credit. Well, here's this guy from the computer business - what does this geek know about cars?

The industry's very conservative.

It's also CYA [cover your ass] if you know what I mean. If they bring in someone from inside the industry, it's safe, and if they fail, well, it's not our fault. But if you bring in someone from outside the industry and they fail, then the question is why did you do that?

I've been in technology, in the sales side and on the financing side; I've been in the car business on both sides.

Business is pretty simple, if you focus on the basics. We make business far more complicated than it is.

Then what's your formula?

I always talked about the B, C, D, E and F.

I started with B like BMW. B is Brand, C is Customer, D is your Dealers, E is Employees, F is Financial Services.

If you don't have cash or lines of credit, you can't get anything done.

But if you do the best things for your Customers, Dealers and Employees, good things will happen.

This seems to be translatable to any industry.

Even though the factory doesn't sell used cars, you've described yourself as a used-car zealot. Why?

The brand is king and you invest heavily in your brand. But at the end of the day, the winner is going to be the brand with the highest resale value.

BMW got it very early and understood that if you don't support the used-car business. you're not going to get the resale values. Whoever has the best resale values has lower cost of ownership and can price higher and doesn't have to use incentives as much.

Selling used is a good business, but it's risky - every dealer has a used-car horror story. You've got to have really disciplined management, but it is one of the key secrets to driving brand values.

Going from IBM to the car business, you must have been an early adopter of using the Internet to sell cars.

People in the industry didn't want to acknowledge the Internet and the fact that customers knew everything.

A customer would walk into the store knowing more about the product than us. I remember a customer calling me to say he was just about to take delivery of a new M5 when it first came out.

He said, I hear there's a problem with the oil pump or something in the engine. He said should I take delivery or should I wait?

I said I haven't heard of anything, I know there hasn't been a recall because I have to sign every one. So I said I'll check into it. I called down to our after-sales guy and he said no, there's nothing. Less than 24 hours later, we got a notification from Munich that there was this issue.

The customer had found it in Europe or Asia or wherever. So as I say, you can't bluff customers. They know more about the product, they know more about your pricing and cost, they know about problems. That's the power of the Internet and you can't fight it.

When people go into a showroom these days, they're not going for information because they got that online. They're going because they've made up their mind.

You're right.

At the retail level, we track the traffic and the close ratio. And what you find is traffic is down and the close rate is up because customers when they come in are pretty sure what they want.

Now the question is, do I buy it from you or do I go to a different dealer?

You've been the Canadian at senior levels at both Mercedes and BMW. What's the difference between the two companies?

I was more of a BMW person than a Mercedes person, but both companies were great to work with.

BMW was like a mom-and-pop company on steroids. It was smaller, more entrepreneurial. Daimler was bigger and had more layers and was more formal.

BMW was faster and you had a lot fewer layers of management. It was amazing how quickly you got to know the most senior executives and board members at BMW. But Mercedes has a lot of new products and I think they're coming out of their DaimlerChrysler-induced coma.

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