Monday, July 07, 2008
Car dealer: credit crunch survival guide
Car dealers need to adopt a “credit crunch plan” to identify areas in which they can increase profitability, according to Network Automotive.
The motor industry consultancy said dealers were now paying the price for having ignored many potential profit opportunities during the last few years.
'Managing director Colin Bruder said: “One way of beating the credit crunch is to take a structured approach where dealers look at their business, identify where more profits can be generated, put a plan in action and monitor the results.
“For most dealers, it is becoming clear they will not ensure future profitability by doing more of what they have done in recent years. They need to find new avenues to maximise their potential.”
Network Automotive suggested dealers improve their F&I penetration as a means of boosting revenue and the company said selling more service hours could also pay dividends..
Cleansing databases and increasing average parts invoices were also advised, along with considering a dealer rental business and driving school.
“This is just a short list and most dealers will have many more ideas,” said Bruder.“These are areas most dealers did not consider when the economy was doing better but which could ensure survival in a downturn.”
Bruder warned, however, that making advances in these areas required a structured approach.
“It is not enough to just tell staff that they should be doing more,” he said.
“You need a credit crunch plan with buy-in from all across your dealership where the responsibility for putting the key elements of the plan in place and seeing how well it works is clearly allocated and regularly reviewed.”
DATED: 07.07.08
FEED: MT
The motor industry consultancy said dealers were now paying the price for having ignored many potential profit opportunities during the last few years.
'Managing director Colin Bruder said: “One way of beating the credit crunch is to take a structured approach where dealers look at their business, identify where more profits can be generated, put a plan in action and monitor the results.
“For most dealers, it is becoming clear they will not ensure future profitability by doing more of what they have done in recent years. They need to find new avenues to maximise their potential.”
Network Automotive suggested dealers improve their F&I penetration as a means of boosting revenue and the company said selling more service hours could also pay dividends..
Cleansing databases and increasing average parts invoices were also advised, along with considering a dealer rental business and driving school.
“This is just a short list and most dealers will have many more ideas,” said Bruder.“These are areas most dealers did not consider when the economy was doing better but which could ensure survival in a downturn.”
Bruder warned, however, that making advances in these areas required a structured approach.
“It is not enough to just tell staff that they should be doing more,” he said.
“You need a credit crunch plan with buy-in from all across your dealership where the responsibility for putting the key elements of the plan in place and seeing how well it works is clearly allocated and regularly reviewed.”
DATED: 07.07.08
FEED: MT
