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Offsetting costs by new profit streams

Rising costs as manufacturers place more demands on retailers’ operational and franchise standards has forced Swansway Garages to develop profit streams in other areas of the business.

The group has started to put more focus onto its used car business and aftersales operation, an area often under-exploited by franchised dealers. “One of the worst things manufacturers ever did for the retail motor trade was to bring in the variable servicing schedules,” says company director Peter Smyth.

“I think that, privately, most manufacturers would agree it’s backfired on them.”

He believes variable servicing schedules confuse customers and also mean they can go two years without visiting the dealership.

“A lot of things can change in that time. Their financial situation can change, or somebody can bring out a new model that entices them over,” says Smyth.

“What the motor trade has got to be able to do is not just identify work that needs doing now, but what needs to be done in three or four months time, to keep them coming back to the dealership.”

He has set up Vehicle Health Checks throughout the business. “When a customer comes in with a problem on his or her car, we expect our technicians to spend 20 minutes or so identifying work that may need to be done. We’re finding it’s a great way to generate upsell in the workshop.”

  • This is an excerpt from a two page feature in the June 16 issue of AM.
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