AM Online

The big picture - 2007: a good or bad year?

The dawn of a new year. But will the next 12 months be a time of cheer or depression?

Look at the sales figures and the picture looks gloomy. The SMMT is forecasting another dip in annual registrations, the fourth consecutive. This time it’s 1.3%, or 30,000 fewer cars. That’s around 280,000 fewer than 2003’s all-time record of 2.59m.

Lots of owner-drivers are touting their businesses around the big groups. Expect a lot of consolidation this year with groups in the top 50, especially, adding lots of ‘in-fill’ sites over the next 12 months.

But there are winners among carmakers and dealers. Audi has enjoyed strong sales on the back of new products and its dealers have benefited accordingly. Kia has also seen sales accelerate during this period, although dealer profits have lagged behind as they often do during periods of rapid growth. They aren’t the only ones.

Within every brand network there are also winners, irrespective of how well new cars are selling nationally and how overbearing the carmakers are on standards, audits and administrative burdens. Success under these conditions comes down to management, staff and process.

AM saw a number of examples last year showing how a change at the top, like Peter Vardy’s acquisition of the Perth Vauxhall business, could have a dramatic impact on performance.

Vauxhall’s sales last year fell by almost 4%, but that didn’t stop Vardy from raising sales and becoming one of the top performers for market penetration.

Motivated staff working in a friendly environment sell cars.

Last year, carmakers were queuing up to tell AM about how they were relaxing their standards and reducing overheads. BMW, Honda, Audi and Vauxhall were just a few of the carmakers who accepted that the burdens placed on retailers was too high.

Each claims to be putting actions in place to rectify the situation – but are they? That’s up to you to tell us. Email me at stephen.briers@emap.com and let me know.

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