Large car dealer has lost 80 percent of sales

Large car dealer has lost 80 percent of sales

Customers have primarily failed because there has been a lack of attractive electric cars and there have been major supply problems.

Now Peter Kjærsgaard wants to change his saddle. But the trend takes several months to reverse.

Kjærsgaard Auto is one of North Jutland’s largest car dealers, selling Citroën as well as Fiat, Honda, Nissan and DS.

The car dealer has had to admit that the car market has become difficult to navigate.

The company has just presented an annual result for 2023/2024 of DKK 86,000 after tax. This is significantly lower than the previous three years, when the result was between DKK 1.1 and 2.7 million.

This is mainly due to the electric cars, which are putting pressure on the rest of the market.

Electric car sales picked up in 2023. And are going even stronger now.

Two out of three new cars sold in Denmark are currently an electric car. The same applies to nine out of 10 imported cars.

The year started with a shock

2023 started with a shock that shook the entire car market.

Tesla lowered prices by up to 100,000 kroner on popular models. This caused an immediate slide in the prices of new and used electric cars.

Diesel cars were also hit hard at Kjærsgaard Auto, who had to sell large parts of the stock at a loss in the coming months.

– Fortunately, we had moved cautiously in the market, but are hit on demo and workshop cars, which we are forced to sell at a loss, the management report states.

Supply problems have also plagued the dealer, who has had almost no cars to sell.

– We simply haven’t had any cars on the shelves. We had a sales target in 2023 of 700. We just managed to sell a three-digit number. Citroën has not been able to deliver cars – neither electric-powered nor affordable minicars like the C3, says owner Peter Kjærsgaard to Motormagazinet.

Lack of attractive electric cars

Kjærsgaard Auto was further hit by a lack of attractive electric cars on the shelves.

It concerns, among other things, the models Fiat 500e, Honda E:Ny1 and Citroen ë-C4. None of these models were anywhere near the top of the sales charts.

– We are affected by the fact that the products we sell, including Citroën, Fiat and DS, have not had competitive electric cars, acknowledges Peter Kjærsgaard.

The Honda E:NY1, which was introduced in October 2023, currently costs DKK 255,000 in the cheapest configuration. It has a 100 kw DC charger and a range of approximately 400 kilometers. The price was lowered by DKK 75,000 in April. PR-photo

Kjærsgaard Auto is also affected by a sharp decline in repairs, painting work and in the claims department, as well as a decline in structural customers (fleet customers, leasing companies and business customers).

And rising prices for both wages and services have been difficult to transfer to rising customer prices, admits Peter Kjærsgaard.

Rates used and Chinese

In order to boost car sales, Kjærsgaard Auto chose last year to increase its focus on newer, used electric cars, imported from Germany, the Netherlands and Sweden.

The car dealer is also now trying to become a dealer of the Chinese electric cars Hongqi and Voyah in order to have more on the program.

Kjærsgaard Auto still lacks competitive new electric cars. But they are on their way.

Among other things, the Citroen ë-C3, which Peter Kjærsgaard hoped would be on the Danish market this autumn. Now the announcement is that it will come to Denmark in February.

Peter Kjærsgaard has previously estimated that this particular model, with its starting price of DKK 180,000, should become a bestseller. He predicts that it will be able to make up 60 percent of his total sales.

– It’s a game changer. The price makes the difference. The car costs almost the same as a petrol-powered C3. But electric cars are far cheaper to keep running, so now the big market is opening up, stated Peter Kjærsgaard to Nordjyske five months ago.

The bad times have no immediate consequences for the approximately 40 employees in the garage.

– The foundation of a car dealer is the knowledge that the employees contribute. That is why we have retained all our good employees even through this difficult time, says Peter Kjærsgaard.

Problems continue

It will be some time before the many challenges are resolved at Kjærsgaard Auto.

The dealer also got off to a rough start in 2024. Here there was suddenly a very large range of electric cars. Kjærsgaard Auto itself assesses that this change in taxes/subsidies for electric cars in the neighboring countries.

Peter Kjærsgaard states that throughout 2024 there have continued to be supply problems and that he currently only has five cars in stock. He only expects something resembling a normalization during the third quarter of next year.

Therefore, Kjærsgaard Auto also expects the next accounts to hit a zero result.

– All in all, very difficult times for the industry and for us, but we are not wavering and we are ready to accelerate when we have the right products again, says Peter Kjærsgaard.

Peter Kjærsgaard, owner of Kjærsgaard Auto in Aalborg has approximately 40 employees. They must continue to scout far for customers. There are still supply problems and there is a lack of attractive electric cars on the programme. Photo: Lars Pauli

According to Bilbasen, Denmark’s largest site for used cars, the used car market is still under great pressure. Last week, 1,800 used electric cars were reduced in price. This is the highest number ever.

Even when Tesla lowered prices in January 2023, more cars were reduced in price.

A survey of dealers shows that it is price pressure from price reductions on new cars, the pricing of newly created used electric cars that are put up for sale, and that the price adjustments are made in relation to avoiding a high number of lay-up days.

Right now, approximately every fourth car for sale at Bilbasen is an electric car.

– The supply of used electric cars is setting a record, and this is good news for consumers, as demand and sales of new and used electric cars are increasing month by month. With an increased number of cars for sale, prices are kept down, says Jan Lang, analyst at Bilbasen.

2024-11-08 04:53:00
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Kjærsgaard ⁢Auto is maneuvering ‍through a ⁢challenging landscape, marked by an ⁤ongoing crisis ‍in the automotive industry. The focus ​on electric vehicles and a shift towards used car imports aims ⁣to‍ mitigate the downturn, yet the pace of recovery remains uncertain.

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