Monthly new car registrations continue to disappoint and in a sector working on 1% return on sales such volume decreases are difficult to deal with from both a profitability and cash flow point of view.
Dealers are trying to react by looking at boosting used car operations to offset the drop in new car sales. However good “late plate” stock is commanding a good price in the trade because of the reductions in new car sales and production at the start of the recession. Any successful used car operation needs to be undertaken under a strict set of procedures and rules. Hold stock past 60 days and you will probably make a loss. Buy older stock and you will not be able to put it on your funding plan. Miss value added products and warranties from your sales process and you will underperform. The danger is that dealers who now see used cars as a way forward do not perhaps possess the skills, experience and structures to control a part of the business that is traditionally associated with high risk.
Aftersales drives profitability, but is not a “sexy” area in many dealerships. Senior dealership management normally come from the sales side of the business which is where their heart and focus lie. But in a market where new customers are expensive and difficult to find the emphasis has really got to be on retaining existing customers and making the most out of them.
The sector is awash with management data and short of management information. The Secantor “dashboard” concept is an ideal flexible tool to give management key daily operating data. The experienced Secantor team can bring to SME’s the rigour and experience that the successful players use on a daily basis to drive profit and cashflow out of what remains a low margin sector.
