F&I Management & Training

Mercedes UK boss Wilfried Steffen has warned that carmakers can do little to stimulate sales in the short to medium term but that the financial crisis could provide long term opportunities.

"We as an industry as well as our retailers have an opportunity to rebuild our business model and adapt it for the future," said Steffen.

"We've seen deteriorating relationships between retailers, manufactures and customers."

He said that the ready availability of cheap money in the last 2/3 years and competing high street finance deals had isolated dealers from profit opportunities, and that there would be potential to market their expertise as ‘one stop shop' vehicle retailers.

"There's a chance to go back to the market and say ‘here's what we're good at.' We need to play the customer service card stronger than ever before."

Steffen added that car makers needed to understand that dealers needed decent margins to survive.

However, his forecast for demand in the medium term remained downbeat.

"I think the (state of the) car market a reflection of the overall retail market. It's not isolated. It's fair to say that all of 2009 will be challenging."

Steffen said that both car makers and dealers were also suffering because many sources of finance had dried up, making it difficult for some people who still wanted to buy vehicles to afford them.

He said that car makers with strong business plans that had been "focussing on all the revenue generators" would be better placed than those in difficulty before the current economic malaise, which described as "unprecedented" in his lifetime.

He believed that many people still had money, but were saving rather than spending it, with many younger people moving in this direction.

He said those who remembered economic difficulties in the 1970s and early 1990s were more sanguine.

DATED: 13.10.08

FEED: MT