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.
Supergroup Dealerships announced the upcoming launch of four new MG dealerships as part of its growing portfolio. The new locations that are set to open soon, include three on the East Rand, one in Rustenburg and one in Paarl, Western Cape.
The highly anticipated F&I Industry Awards 2024, which were held recently, showcased the pinnacle of excellence and innovation in the automotive financial and insurance sector.
In a groundbreaking move towards offering a comprehensive, one-stop integrated service to its customers, Absa has introduced an integrated Finance & Insurance solution for dealer partners across South Africa. This innovative initiative marks a significant step towards enhancing customer experience and streamlining financial services.
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You can't buy happiness but you can buy cars and that's kind of the same thing.
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Supergroup Dealerships announced the upcoming launch of four new MG dealerships as part of its growing portfolio. The new locations that are set to open soon, include three on the East Rand, one in Rustenburg and one in Paarl, Western Cape.
The Nissan Magnite seems to have captured the imagination of traditional as well as new buyers of the brand. With an updated Magnite recently launched and arriving at dealerships currently, there is good interest from prospective buyers of small Crossovers with a strong SUV character.
As 2024 draws to a close, I think it is pertinent to look back at some of the articles that I have written this year. I always try to concentrate on the basics and very often they are the areas of a dealership that need continuous and regular focus.
