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Used cars key to profits

Mazda is challenging its retailers to intensify their focus on used cars and the aftermarket if they want to raise profits.

Managing director Phil Waring says the network can expect a slowdown in the phenomenal new car sales growth experienced over the past few years – volumes have risen from 14,259 in 2001 to almost 50,000 last year.

He is targeting 53,000 this year, with incremental business from new models like the Mazda 5, which replaces MPV and Premacy, rising to 55,000 in 2006.

“We’ve not been at the forefront of used cars nor the aftermarket because our focus has been on new cars,” Waring says.

“Dealers will this year see three-year-old Mazda 6s coming back into the market from finance agreements and ex-lease. There is a huge opportunity for them to leverage this business.”

Waring believes the Mazda6 will achieve 70-80% repeat sales. “Mazda dealers have experienced boom and bust in new cars, but with used and aftersales it will level out,” he says.

“We will help dealers to understand this business by sharing best practice, training and used vehicle stock management.”

Dealers will need to add technicians to the aftersales department and consider opening for longer hours. They current average two technicians and Waring wants this to rise to three.

Many of the staff will come from the company’s own apprenticeship scheme, which was launched two years ago. “This is important for the long-term health of the network,” he says. “Maybe then we can set the network up to handle 70,000-75,000 sales.”

Mazda has 150 dealers and intends to reach 160 by the end of the year. It will need another dozen to hit 75,000 sales with the focus on smaller groups.

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