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Economic crisis will lead to ‘lots of dealer closures’

Britain’s economic meltdown could claim dozens of dealerships in the next few months.

Closures are imminent as businesses seek to cut the cost of vehicle marketing, believes Subaru UK managing director Lawrence Good.

“A massive reduction in the size of retail networks seems to be the only way out of the terrible situation facing our industry. It’s obvious the most popular marques are being the hardest hit.

"Brands suffering losses in both volume and margin will be forced to slim down.

“The credit crunch will change the face of car retailing and it will happen soon – I’m sure we will see a lot of closures in six months’ time,” Good told AM.

Casualties

He suspected the casualties could include “a couple” of Subaru dealerships which may be pulled down by collapsing sales of a bigger brand in the same showroom.

The banking crisis and slump in new car sales has left some dealers looking very vulnerable, said Good. “My forecast is that in six month’s time, areas now being served by five dealers will have only three and we’ll see an increase in the number of authorised repair centres.”

Lead management

Subaru’s September sales were around 200 units down three-quarters into the month. The brand is supporting dealers with the implementation of a lead management system.

Marketing head John Fossey said the Contact Tracker software is intuitive and integrates with the dealer management system for customer relationship marketing and aftersales marketing.

Subaru has also appointed marketing agency Golley Slater to support lead management.

“We’ve had quite a poor lead to test-drive conversion rate historically. There wasn’t a clear lead management system. We were still faxing leads across to dealers.

“We spend a lot of money on marketing and generating leads, and if dealers don’t pick them up then Golley Slater picks up the customer and generates a test-drive for them,” said Fossey.

He aims to use Contact Tracker for lost sales analysis. The results will be fed into the network in order to hone dealers’ sales processes.

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