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
A few small ideas to help you add to your bottom line and enhance your balance sheet:
Go into your parts warehouse area and turn all the empty bins upside down and pull them partially off the shelf so that if you look down the aisle between the bins, you can see all the empty bins sticking out into the aisle.
It is an effective way to get a visual of your stock management. Discuss your findings with your parts manager and see if the logic of your findings make sense for your business model. You should only create "bins" for parts that meet your stocking criteria.
If you sell 40 new vehicles a month, then you must PDI 40 a month, which is two PDIs per working day. Consider moving your PDIs to “after hours” and keep your working hours for retail and warranty work. Take two extra retail jobs a day to replace the PDI jobs. The financial effect could be meaningful over time despite having to pay overtime to the staff who perform the PDIs after hours.
Examine your retail vehicle sales over the last year to see who you have sold to and what your anticipated service retention should be. People will either service close to their place employment or close to where they live. If you have good data, you should be able to estimate your retention from purchase to workshop. Additionally, try and produce a strategy to target buyers who are more likely to service with your dealership – the overall GP generated by a vehicle and workshop client is probably double the GP of the vehicle sale alone.
Examine your switchboard records to determine who spends time on the phone and which phone numbers are the most frequently dialled. In addition, look at the numbers that have longest call duration – my bet is that it will be the maintenance providers who have a habit of keeping dealers on hold waiting for authorisation for workshop jobs. Certain maintenance providers are better than others but make sure that you do not have vehicles on the lift that cannot be worked on until authorisation is obtained. The lost labour sales can be substantial.
Despite potential headwinds, South Africa’s automotive industry remains committed to long-term growth and resilience.
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