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Dealers need to go back to basics for survival in 2010

Dealers need to consider a back to basics approach to ensure they survive what could be their toughest year of trading during 2010, according to leading industry analysts.

A series of potentially profit-crushing issues face dealers this year, including the end of scrappage, the ongoing impact of recession on buying trends, difficulties with funding, rising VAT and the potential impact of the first-year road tax.

Together, they represent an immense challenge to dealers who will have to rely on their own skills and business management expertise to remain profitable and secure maximum market share.

John Maslen, brand director of AM sister brand Sewells Research & Insight, said: “After surviving the past year, dealers may have felt the worst was over, but there is a genuine risk the next 12 months will be just as difficult.

“In these circumstances, just doing what you have always done will not be good enough. Dealers need to constantly review their businesses and look for improvements and efficiencies wherever they can.

“In particular, dealers need to make sure they have got the basics absolutely right, as these form the foundations for success.

“With the challenges ahead, managers can feel they are being pulled in all directions, so it is important to focus on the core issues that are essential to maintaining a healthy business.”

Managers need to ensure the business is working as a coherent team, with clear goals and ambitions, he said.

Maslen added: “When the going gets tough, a professional manager owns the problem and helps, coaches and reassures his team that they can overcome the problems together.

“As departments struggle for profit, an ‘every man for himself’ culture can appear and that is simply bad for business. This is a time when managers and dealer principles will prove their value to the business.”

Sewells Research & Insight has a range of best practice information for dealer groups which includes a detailed review of how the best practice approach can make a difference.

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