James Litton: When should fierce growth strategy stop?

Time 8:20 am, March 11, 2016

I AM sure many of you have been enjoying the BBC’s adaptation of War and Peace.

For those of you who haven’t, nor perhaps have the appetite and staying power required to read the novel, it is a story of humankind set during the Napoleonic Wars – in particular, love stories of Russian gentry who are under threat from the Republican French would-be conqueror.

Napoleon’s campaign to conquer Russia saw one of the most famous Pyrrhic victories (one where the cost of triumph is greater than defeat) in global warfare: the Battle of Borodino, which was fought on September 7, 1812, and left at least 70,000 casualties out of some 250,000 combatants.

With Moscow under threat, the Russians dug in at Borodino and waited for the French to attack.

While the casualties on both sides were severe, by the time the French finally took Moscow there was no prize to be had, and two months later they were in full retreat and disarray.

Now, what on earth does all this have to do with the car trade, I hear you cry?

With the faint hum of Auld Lang Syne growing ever louder, BMW appeared to take action to nip in front of Audi to finish the year some 600 units ahead of its four-ringed rival.

A quick scan of the BMW used car locater may suggest where some of this closing action came from, but the wider question remains, at what point does this aggressive growth strategy cease to make sense?

To be fair to my former employers from Stuttgart, Gary Savage’s frank interview conducted by James Baggott confirms that while Mercedes is aware that some pre-registration exists, the majority of its growth has come in retail and fleet sales.

The top ranking in the NFDA survey would suggest that whatever Mercedes is doing, the network is happy with it.

BMW’s ‘achievement’ is even more impressive when you factor in the lack of an A1 competitor – a significant contributor to the Audi volume.

I am sure that all three German brands have sustainability at the heart of all of their UK growth strategies, and I for one will be watching with interest now that I am on the outside looking in.

Who is James Litton? James is general manager – director of Volvo Cars Poole. He always has something to say about the industry he loves.

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