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Dealers failing to investigate new sales methods

The majority of dealers are falling way short of achieving their sales and profitability targets.

According to a report by consultancy Network Automotive on the first quarter of 2006, few appear to be looking to tackle new areas of business that could potentially bring in further sales, and instead appear to be concentrating mainly on a conventional, approach to car sales.

“The only real difference we have noted is that there is a harder push to carry a sale through to its conclusion, achieved either usually by arriving at the deal the customer wants,” the report says.

“While a number of highly competitive promotions and deals designed to get customers into the showroom remain in place, fewer new ones have appeared during this quarter and we would expect manufacturers to redouble their efforts in this area for September new registrations, especially for slow moving stock,” Network Automotive says.

“Instead, most manufacturers and dealers seem to be concentrating their promotional efforts on new models, which have appeared in abundance over the last quarter. While these do undoubtedly create a degree of showroom traffic, our feeling is that some resource would be better devoted to improving basic marketing techniques.”

Aftersales

Network Automotive says that, as in the first quarter of the year, it continues to see the most proactive dealers switching a large part of their attention to aftersales in the expectation that higher margins can be achieved there than in new or used car sales.

“We are also seeing some manufacturers working harder to support dealers in this area. For example, some have been moving to ‘sell’ the idea of rental operations to dealers without their own facilities, and get those that already rent to increase their efforts.

“Of course, rental operations bring all kinds of benefits as well as direct revenue – they get customers into the showroom and driving product, and also provide a good source of quality used stock.”

Service and maintenance marketing is increasing, and slightly more dealers are using customer databases are being used for direct marketing purposes to ensure that a larger number are captured for aftersales work. #AM_ART_SPLIT# Again, as in Q1, efforts are being made to increase parts sales - if people are hanging on to their existing car for longer, dealers believe, then there will be more demand for service, maintenance and parts.

“Part of the same strategy is a move by some dealers to increase the amount of MoT work they attract. Keeping vehicles of three years and older within the franchise network is an important opportunity for aftersales business, but many dealers react too slowly. By their nature, MoTs tend to be booked at the last minute, and motorists often simply don’t have four-five days before their current certificate expires,” Network Automotive says.

“While MoT work is bread and butter to fast fits and independents, It has been seen almost as incidental work by many franchise dealers, even thought it is an essential tool in retaining customers who own vehicles older vehicles. Of course, this leads to the loss of other aftersales business. If these customers go outside the franchise network for MoT testing, they are more likely to also source servicing and repairs elsewhere.

“What some dealers are doing is proactively contacting the customer when they know the first MoT is due, and attempting to retain the work themselves.”

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