Suzuki GB’s decision to import cars left incomplete due to the shortage of semiconductor microchips is set to give dealers access to 4,000 vehicles they would not otherwise have had.
Dale Wyatt, director of automobile, Suzuki GB, told AM that a decision to import thousands of cars to the UK without infotainment systems - which incorporate sat-nav and vehicle sound systems - and source his own solution locally, would now bear fruit.
Retailers will begin to receive the now complete new vehicles within weeks, he said.
Wyatt spoke exclusively to AM after completing six regional car dealer meetings in just five days to allow the brand to spell out its plan to mitigate against the impact of new vehicle supply shortages on its franchisees.
The meetings sought to deliver clarity of the brand’s stock position, details of its Q4 & Q1 trading terms and Q1 consumer offers, its efforts to keep sales teams motivated and its plan to retain PCP customers and part-exchange stock.
H1 2022 on 'half power'
“We ordered the stock and sourced the local infotainment solution,” Wyatt said.
“We’ve got the frustrating position at the moment where we’ve got the cars sat in Bristol that are awaiting those systems.
“Within a month we’ll now have the winning ingredients of both a car and an infotainment system and we can start getting those vehicles for customers.
“It’s been a struggle, but the reality is that, if we had not taken that action our retailers would not have had those vehicles to sell.”
But, spelling out the need for the gruelling schedule of face-to-face dealer meetings this month, Wyatt added: “The bad news is that the chip shortage isn’t a short-term problem. It will be Q3 before production gets back to normal and Q4 before that supply actually starts to recover.
“That means we’ll be running at half power for the first half of next year.
“We’d normally sell 12,000 cars a quarter but we’ll sell 10,000 in Q1 and we’ll have an order bank of 3,000 cars… There just aren’t the cars out there.”
Wyatt said that he had revealed a number of initiatives to help his franchisees retain momentum after they succeeded in achieving an average 3% return on sales (RoS) in the past 12 months, with solus operator delivering 3.8%.
Franchisees have been given certainty about their payments from the brand, Wyatt said, adding that sales staff are being incentivised for vehicle orders, rather than completed sales, in a shift which aims to ensure “they have a good Christmas”.
Agency model feeds 'mistrust'
Wyatt said that he is keen to remain transparent and supportive as he prizes a relationship with retailers which consistently sees the OEM score highly in the National Franchised Dealers Association’s (NFDA) bi-annual Dealer Attitude Surveys.
In a recent LinkedIn post, he explained that he felt that some manufacturers’ move towards agency agreements suggested such relationships could be taken for granted and eroded.
As part of a “personal take on the agency model”, he said the shift would:
- Require significant investment
- Distract everybody for two years whilst they arm wrestle over the details
- Offer a questionable return on investment (ROI)
He said that the perceived benefits of agency could be achieved through the current franchise model, adding: “If manufacturers want to take control of the customer, build other revenue streams and improve margins perhaps they should bite the bullet and become retailers
Wyatt added that the agency model would “put the dealer last”, stating: “You cannot motivate a dealer partner whilst eating their lunch and leaving them the crumbs on the table
In conversation with AM, Wyatt said: “That post has had over 13,000 views on LinkedIn and the response has been really overwhelmingly positive.
“In it, I said that by building trust and agreeing mutually beneficial goals dealers and OEMs can prosper together. That’s what I believe in. That’s what we have to do and it’s why I spent a week to deliver our plans to retailers face-to-face.”
Wyatt will meet up with his retailers again at the brand’s national dealer conference, which will be held in Manchester at the end of the month.