People may be surprised to discover that a retailer famous for its pic’n’mix goodies has decided to branch into vehicle sales. And much has been made of the fact that Woolworths is undercutting dealerships on price by as much as 20 per cent.
Should the industry be worried about this? On the face of it, in terms of pure volume sales, the answer should be “yes”.
However, I seem to remember Woolworths trying this more than a decade ago, and did it work then? No.
The fact that cars are being sold via the internet isn’t the problem; after all, Patterson Motor Group’s online sales figures will testify to that. The main problem is that people are reticent about buying cars from retailers whose core business lies elsewhere.
People want to be reassured they can call on the expertise of staff who are trained to industry standard and who have excellent product knowledge and the ability to give an unrivalled after-sales service. Dedicated trained people in dealerships act as a bridge between the fleet and the end user. Can retailers such as Woolworths really offer this?
In addition, will Woolworths stock the range of accessories and gizmos that the public now craves? Research tells us that additional sell-ons are now an important part of the overall package for customers.
I would be very surprised if Woolworths can offer a better deal than a motor dealer that has the full backing of the manufacturer. This combination works well and the strong relationships between fleet operators, company car drivers and the dealer will ensure good value for the consumer. In fact, with dealer discounts and the manufacture’s additional support to the end user, our prices will not be that much different to those offered by Woolworths.
There’s nothing intrinsically wrong with Woolworths wanting to have its slice of the cake. But reputable dealerships should be able to cope with this competition."