The operational side of motor dealerships has intrigued me since I first joined the motor industry in 1988. I have invested loads of energy, time and passion in dealership operational efficiency, and it certainly paid substantial dividends over the years.
New vehicle sales have always been the yardstick for determining success in the retail motor industry. Market share and new vehicle sales volumes have always enjoyed priority when rating Dealer Principals’ performance. There are other measurements like CSI that have been included in various ways, but the gateway has always been new vehicle volumes and market share.
Whilst achieving sales targets and market share are very important, a balanced business is far more important than simply achieving new vehicle sales targets. A balanced dealership will maximise the potential from new vehicles, used vehicles, parts, service and “admin”. A balanced business will have tight asset controls, cash-flow management and a happy and productive staff complement. In terms of a business, a dealership is “four businesses in one” and that is what makes it so fascinating, challenging and rewarding.
Dealerfloor (dealerfloor.co.za) and I will be publishing regular articles on dealership efficiency. The articles will cover various topics that focus on ideas and suggestions which, if applied, should improve the efficiency and balance of your dealership. I am not sure that my facts are correct, but I think it was Raymond Ackerman (founder of Pick n Pay) that who that “Retail is detail”. In a low-margin, asset-intensive business, paying attention to detail is critical and is the difference between success and failure.
To show the importance of detail, here is a simple example:
If a dealership’s return on sales (ROS) is 2%, it means that the cost of sale and overheads is 98% of turnover. Reducing the cost of sale and overheads by 2% will essentially double the ROS. If your dealership’s turnover is R100 million, it means making R4 million versus R2 million. Finding that 2% is easier said than done and it is made up of fractions of a percent from various parts of the business.
I am really looking forward to sharing ideas with you. Join the conversation by sending a WhatsApp to 082-776-1887 to be added to our group.
- Donald Christy.
Audi South Africa has appointed Ricci Birchfield as the company’s new Head of Marketing, Product and PR. Ricci brings more than 18 years’ experience in the automotive industry, specialising in marketing, digital strategy and business transformation.
Zero Carbon Charge (CHARGE) calls on President Cyril Ramaphosa to use his State of the Nation Address (SONA) on Thursday to announce concrete incentives and plans to accelerate South Africa’s electric vehicle (EV) transition, emphasising the crucial role of charging infrastructure—especially off-grid stations.
SA's automotive market is shifting. Hybrid sales nearly doubled in 2024, EV views surged 77%, and sedan sales continued to slide, dropping 13.57%. Here’s how these trends can drive dealership strategies forward.
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A light on my car’s dashboard came on, and instead of fixing the problem, I waited for the bulb to burn out. Crisis solved.
Jarod Kintz
SA's automotive market is shifting. Hybrid sales nearly doubled in 2024, EV views surged 77%, and sedan sales continued to slide, dropping 13.57%. Here’s how these trends can drive dealership strategies forward.
New Year is over, but there were extended celebrations in the Cape after Hyundai N1 City was awarded the 2024 Dealer of the Year prize at Hyundai Automotive South Africa’s annual dealer conference at Sun City.
With more than two decades of experience in the automotive retail sector and 11 years in the banking sector, Riyaaz Slarmie, Dealer Principal at GWM and BYD in Woodmead, is a go-getter driven by a genuine passion for people and success.
