Last week Vertu Motors released a decent set of interim figures for its first six months and reported the statistic that 45.7 per cent of the group’s gross profit for the period came from the aftersales departments (TaklingMotors)
Well as Alanis Morrisette might warble, it’s ironic but this is something we have been predicting for sometime and if you think about it it’s fairly inevitable. As in any economic downturn there’s less money in customers pockets and if they were looking to change their current car they will either trade down or in many more cases will opt to keep their current car longer but spend the money on servicing and maintaining it.
Any after-sales department worth their salt will encourage their customers to do this (watch the service, MOT and “winter check” special offers) because it is a great way of increasing income to a potentially captive audience. Also service staff are being specifically targeted to up-sell customers the extra work they may need (or may not need the cynics may say) by looking at a deal for the whole job.
If the customer has decided to keep their car they are far more likely to agree to the work to ensure that whilst retaining the vehicle it will be as reliable as possible for its continued use.
If modern car dealers and repairers are to survive they need to replace the profit opportunities currently being lost due to flagging car sales and this must be through their workshops parts departments and finance and insurance backed products.
It’s not rocket science it’s basically adapt or die!