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.
China's largest auto show opened in Beijing on Thursday with the biggest names showing off their latest electric vehicles (EVs), underlining how the world's largest auto market is already in an all-electric mode, with no looking back.
Daring Africa 2024, Nissan’s overland adventure across eight countries with four Nissan Navara pick-ups and an X-Trail SUV, has completed its Kenya leg, the expedition’s penultimate stop before transitioning to Egypt.
Selling new vehicles in a rural environment these days goes hand in hand with a number of challenges. Serious challenges that see dealerships close their doors for business. But when you are an established family business with a solid reputation its game on, as they say.
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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
Selling new vehicles in a rural environment these days goes hand in hand with a number of challenges. Serious challenges that see dealerships close their doors for business. But when you are an established family business with a solid reputation its game on, as they say.
It is called the “big one” in the automotive industry, the prestigious MSXi | NADA Dealership of the Year award, which was lifted by BB Ford Tzaneen, which also took the top spot on the podium in the category for Unlisted Groups.
Volkswagen acknowledged its top performers from the dealer network at its annual Grand Prix Awards where the top award as Dealer of the Year went to Conrad Gresse of Upington Volkswagen.
