The recent National Automobile Dealers’ Association’s (NADA) series of four countrywide Performance Programme meetings provided the enthusiastic dealer participants with a host of good information for now and for the future. Interestingly, RMI director Gary McCraw, who is responsible for NADA, said that there were different outcomes at each of the four meetings held in Pretoria, Johannesburg, Cape Town, and Durban.
I attended the Pretoria meeting and was impressed by the enthusiasm and openness of the presenters.
McCraw set the scene by talking about the series of current developments which could have major impacts on motor dealers in South Africa. These included: the start of industry wage negotiations seeking another three-year deal, ongoing tough negotiations with the Competition Commission regarding the content of the proposed Code of Conduct, and some big changes coming from the national financial regulatory body, which may affect income such as Dealer Introduction Commission.
Well-known business coach, Claudio Camera, who was the facilitator for the meeting, said the trading environment was tough as there had been a big drop in business confidence in the past 12 months, with the indicator going down from 44 to 28, “but there are some green shoots showing.”
Camera added that the dealership of today will be far removed from the dealership of 2025. Major factors for success will be a well-educated and trained staff and self-development of all team members. One major challenge was how to deal with the drop being experienced in workshop throughput.
The programme consisted of two discussion panels each of three dealers and with Camera as the facilitator.
The first group, which consisted of NADA National Chairman, Mark Dommisse, of the North Motor Group; Stefaan Delport of McCarthy Volkswagen in Arcadia, Pretoria; and Garth McGee, of Ford Lydenburg.
Group One was asked: How did you become a winning dealership?
Answers included: Get a full-time person to handle the social media portfolio; It is important to know what to do with digital feedback; Right-size your business, but remember you still need people on the floor to close deals; Spend money in the right areas; People are the key to cutting costs so use gross profit per head as a measure; Train up you own staff instead of buying expensive people from outside; Use online websites to get actual used vehicle selling prices when giving trade-in values, instead of just relying on “The Book”; Use the number of trade-in vehicles evaluated each day as a measure of dealership productivity; Relook at your staffing structure with the aim of improving efficiencies.
Be careful when employing people from outside your dealership – look for tech-savvy people; Pay incentives based on improvements to the dealerships’ rating by customers on Google; Upsell to service customers; Be aware that 46% of online shoppers are Black women; Benchmark your business against the best, not necessarily against same-sized dealers; Customer retention is critical so look at ways of keeping customers coming back to your dealership, by doing things such as offering free car washes; Ensure your dealership is pleasant to visit, with free Wi-Fi, in a pleasant environment.
The second group of panelists consisted of Fred Whelpton of the NTT Motor Group; Mark White of Mark White Nissan; and Dirk van Rooyen of Halfway Toyota.
Group Two was asked: What will motor retailing look like in the 2020’s?
Answers included: Don’t over-estimate the importance of the so-called pre-millennials (born between 1981 and 1996), they are just another market segment even though they make up about 37% of current walk-ins; Motor business is still all about relationships; Viewing trade-ins will still continue and provide an opportunity to interact with would-be buyers; We can only support the current 33 brands if there is huge growth in sales volumes; changes will be gradual and one will be able to adapt; Digital car-buying and selling platforms are part of a dealer’s life these days, and are a challenge that must be managed; Be aware that 32% of buyers are prepared to buy online; Make sure you keep your best trade-ins to attract quality customers; Look to bringing in-house some of the services that motor retailers have given away over the years, such as tyres, shock absorbers, clutches and batteries.
Promote people from inside your own organisation and consider graduate trainee programmes; OEMs can change dealers’ lives but there is little a dealer can do about these developments; Make the industry more attractive to job-seekers; Downsize facilities by increasing efficiency; Consider putting used cars on open lots instead of in expensive roofed showrooms; Hold less parts stock and rather get daily deliveries; Make your dealership a destination for customers; Some dealers are regularly putting their dealerships into shopping malls