AM Online
Sponsored by

Insight: Big success for dealership with streamlined management structure

By Tony Willard

For 15 years Romford Mazda staggered along, failing to fulfil anything like its potential. Then, in 2007, two brothers acquired the business with a novel vision for success: there would be no managers apart from themselves.

With this unlikely platform the dea-lership in north-east Greater London made gradual progress, which five years on led to recognition by being named sales team of the year at the 2012 AM Awards in February.

That was not bad going for director and dealer principal Amarjit Shokar whose previous business experience was running convenience stores.

The remarkable transformation of the business, driven by Shokar in partnership with his brother Kam as fellow director/sales manager, was achieved with the retention of most of the original sales team.

After acquisition Amarjit Shokar gave employees a pay rise because he knew morale was low and then revitalised the team with his business plan (see panel, below). Only five team changes were made during the following five years at a dealership that used to be constantly weakened by staff churn.

Equality for employees

A receptionist was employed to ensure everyone entering Romford Mazda was dealt with properly and MSX International, the AM Awards auditors, was impressed by the team ethic.

Instead of having managers, each employee is equal and has a say in the running of the business.

All have a development pro-gramme to help them become more professional and they are expected to take full responsibility for playing their part in the company.

To achieve the move from the convenience store to heading a franchised dealership, Amarjit Shokar worked at a Volvo dealership from 1995 where he received training in all areas.

In 2007 he raised the money to buy Romford Mazda out of administration.

The business had declining sales. It was making a profit of around £60,000 a year – a mere £15,447 after tax in 2006.

Romford Mazda was possibly the manufacturer’s worst-performing outlet, in terms of both financial stability (precarious) and customer satisfaction (negligible).

Shokar believed the Mazda brand had the potential and saw how the franchise opportunity had been neglected. “It was difficult to understand the performance in a market area that had potential for sustainable growth,” he said.

“The business is now enjoying phenomenal success. The attitude of our team is extremely caring. We all treat the business as our own.”

MSX auditors could see how this culture and attitude contributed to the success and sustainability of the business through the difficult trading conditions that started with financial collapse of 2008, the year after Shokar bought it.

“The people we employ have become extremely good at what they do through training and because they care,” he said. “This is reflected in our internal customer satisfaction polls.”

3% sales return objective

Romford Mazda spent around £80,000 to modernise the dealership, and make it one of the best in the area, he says, with an objective of a 3% return on sales.

To do this, the Shokar brothers always aim to challenge their team to improve results, but in an environment they find fun to work in.

Amarjit said both sales and aftersales revenue have increased by between 80% and 90%. He aims for winning relationships with all cust-omers and suppliers and a key component of the business is that satisfaction reports must be in the upper quartile of all dealers.

“One never gets a second chance to make a first impression,” he said. “It starts with customers being able to park with ease, and ensuring our showroom and displays are always immaculate.

“Each customer’s requirements must be qualified quickly and with an appropriate course of action. This applies to everything.”

The Shokar brothers’ long-term ambitions include adding an adjacent location/dealership, developing economies of scale and reducing costs.

Romford Mazda is in a shopping parade and close to the M25 and A12. In 2006 the dealership sold 241 new and used cars, increased by the Shokars in their first year to 545 vehicles. In 2008 there were 744 sales and in 2009 this rose to 966. In 2010 it was 843.

The increase in sales meant it was creating a potential for additional aftersales revenue. Two more technicians were employed to make a team of five.

“We continued to focus on aftersales, which we believe is key to sustainable profit in all areas of the business.

“Our customers have confirmed that price is important, but confidence, trust, level of service and dealership environment all play a large part in the decision when people consider where to take their car.

Customers are travelling past other Mazda dealerships to visit us and this reinforces our view that staff attitude and enthusiasm are important.”
 



If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest


Login  /  Register

Comments

  • APC1953 - 09/10/2012 07:38

    Brilliant

    Reply as guest

    Login  /  Register
  • Alfa racer - 09/10/2012 20:11

    The fact that clients deal with the Salesman from start to finish is a huge plus.It creates "flow" and is much more profesional that being passed from pillar to post.

    Reply as guest

    Login  /  Register
  • kevthebass - 10/10/2012 09:20

    At last a DP that understands, and applies the basics: customer parking at a dealership? How rare is that. Most bays are usually stuffed with used stock! Aftersales and trust; so contrary to the "only as good as last week's figures" short term sales driven approach by dealer groups. Customers WILL come back if you treat them properly, they DON'T have to buy a car on the first visit, would you? No. There's been virtually no money in new cars for years, nice to see that the importance of aftersales is genuinely understood, and not just given lip service.Great job.

    Reply as guest

    Login  /  Register
    • APC1953 - 10/10/2012 09:33

      @kevthebass - This is the model of what a dealership should be about and that is the customer.

      Reply as guest

      Login  /  Register