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.
South Africa is facing a growing threat to its automotive industry, economy and public safety – Grey vehicle imports – according to a statement by Vehicles Fact Verifications Systems.
Thule South Africa are expanding their local product offering with the launch of three new products that epitomise the brand’s ethos of “Bring your life”.
Call it a job well done or maybe more of a masterclass performance. This is some of the ways to describe CMH Honda Hatfield’s recently winning the overall Honda Dealer of the Year award.
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Human beings have an innate inner drive to be autonomous, self-determined, and connected to one another. And when that drive is liberated, people achieve more and live richer lives.
Daniel Pink
Call it a job well done or maybe more of a masterclass performance. This is some of the ways to describe CMH Honda Hatfield’s recently winning the overall Honda Dealer of the Year award.
The Eastvaal Motor Group has added Kia and Renault to its existing portfolio in Secunda and revamped its Ford and Mazda dealership as part of the process.
The critical need for trained staff in automotive retail dealerships is underscored by the increasing number of new and returning vehicle brands entering the South African market and establishing trading networks across the country.
