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Analysis: Vauxhall 'wants to be the number one brand’

A greater volume of smaller sites is unsustainable so there has been a move to larger centres with a reduced overhead, but collectively the same number of cars in showrooms.

Roberts said the network is the right size. He believes that customers should be able to drive about 30 minutes to look at a new car, but only around 15 for a service. The network also comprises the right, stable mix of businesses in terms of plcs, private companies and independents, with the latter representing the largest slice at 43%.

Margins in the network are tight, but Roberts insisted they were improving. He put it this way: the number of loss-making retailers this year is down 50% on last year and to the end of February return on sales was up by 0.2%. The upper quartile is achieving a “fraction over 3%”.

The all-network average is “in excess of 1%”. Last year it was 0.7%.

Roberts described the past couple of years as tough. He stressed the impact of fleet business. A sizeable slice of the network does fleet business, but it burns working capital and while financial turnover based on unit numbers is “massive”, returns will typically be way below 1%.

Driving the improvements is obviously product – the new Adam, Mokka and the Cascada while the Corsa and Zafira are still hugely popular. With the Adam and Mokka, Roberts has looked at altering the margin structure to benefit dealers, meaning less emphasis on the ‘chassis’ and more on the options available.

“If the salesperson can understand and work to the difference, the customer will also get the car they want, rather than what the salesperson wants them to have in order to achieve their bonus,” he said.

Other initiatives, Roberts said, are paying dividends for Vauxhall dealers: flexible finance, particularly PCPs on the Adam, fixed price servicing on this and the Mokka, including downloadable service vouchers for customers, a drivers’ service club offering discounts, fixed price servicing and online service booking for 18 months now.

Bookings are averaging 865 per month, the average age of cars is 4.2 years and 43% are with cars not seen in the network for 18 months.

“We are trying to drive loyalty in aftersales and a lot of what we’re doing is getting good traction,” he said.

Customer retention across the industry has never been much better than 36% for the best retailers.  

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Comments

  • iceage - 06/08/2013 13:09

    ha ha ha I remember their internal slogan 'LEADERSHIP IN THE 90'S'...... This is just more attention seeking talk from this manufacturer who's brand and product is still not worthy of a parking place at my Tennis Club

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