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Dealers urged to improve workshop productivity as new car registrations fall

Karl Davis, Coachworks’ Consulting’s managing director

Dealers are being urged to improve their workshop productivity as new car registrations begin to fall.

Increased efficiency would see dealers reap the benefits of the more than 2.5 million cars registered each year since 2015, said Karl Davis (pictured), managing director of Coachworks Consulting, the specialist automotive consultancy.

He said dealer bosses should not be distracted by the decline in new car sales in 2017 and the expected fall in 2018 because the market was still performing at record levels.

"Dealers across the UK are in an ideal position to increase their profitability by improving the productivity of their workshop operations.

"The fall in new car sales in 2017 should be seen in the context of a market which has grown for the past six years; every one of those cars needs to be serviced and maintained."

According to Davis, dealers have an opportunity to boost their profitability in 2018 and beyond by offsetting the decline in new car sales through improving the productivity of their workshop operations.

"Dealers are facing the challenge of how to increase their return on capital employed, whilst being expected to invest more in their businesses by their franchise partners, in a declining new car market. 

Davis said productivity shortfalls can be remedied by dealer managers reviewing their workshop processes to generate more throughput and profitability by targeting improvements in their vehicle health check (VHCs) completion rates. 

"We're seeing significant gains being achieved by dealers with processes in place to increase the number of VHCs performed each and every day. Some sites are happy with an 80% completion rate but that's still one in five cars not having a VHC; that's a lost business opportunity and a failure of their duty of care responsibilities.

"The most successful dealers target a 100% VHC completion rate and are achieving 90-95%. Improvements in workshop utilisation are significantly boosting the bottom lines of dealers."

Davis also said dealers could achieve better workshop utilisation through better management of their customer databases, stressing the importance of making sure they are regularly updated to target active customers who have purchased within the last five years.

"In many cases we're finding the solutions are under the dealer's nose. Better workshop utilisation is all about sweating the opportunities that have already walked through their doors.

"Dealers need to be more disciplined in how they maintain their customer databases.

"Sending reminders to customers they have not seen for several years is too common when they should be focused on those who have purchased in the last five years."


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