SA Auto Week to take place in Eastern Cape during October
Despite potential headwinds, South Africa’s automotive industry remains committed to long-term growth and resilience.
- Industry News
- 2 April 2025
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.
Despite potential headwinds, South Africa’s automotive industry remains committed to long-term growth and resilience.
South African consumers demonstrated a strong appetite for new passenger vehicles in March, according to figures released by the Automotive Business Council (naamsa).
Just a few days after its official introduction to the South African market, the TopGear SA team, in a convoy of Nissan Navara Warriors, has embarked on a record-breaking expedition into South Africa’s most extreme hinterland.
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I always do like seeing other people dance in their cars. It's one of the things that makes me happy.
Ariel Gore
Firstly, all praise to the Almighty for bestowing his favours upon us without which none of this is possible.
A few small ideas to help you add to your bottom line and enhance your balance sheet:
Dealerfloor chats to Jaun Marais (photo), Operations Executive at the Hatfield Motor Group, about their recent expansion of GWM dealerships and his plans and passion for the Chinese brand, which has become a vital part of the group’s product offering and business success.