Whatever town or city you visit, the signs of recession are there for all to see, no business has been immune and the boarded up shops tell their own story. The car business has lost thousands of jobs and seen many showrooms close, whether it is beleaguered large main dealer groups looking to re-structure or independents from multi-car pitches to small Fred in the shed type operations. It is reckoned that over the last 10 years there have been far too many car dealers in the country to ensure that everyone has a piece of the pie and that there are simply not enough customers for the volume of cars around.
The margins in selling cars have long been seen as tight to say the least, when starting off with a retail price, taking away the SIV and then VAT on the profit, reconditioning costs, paying someone to sell the car and all your fixed costs it really is amazing that so many dealers have operated for so long. Indeed a couple of very successful smaller specialists known to us have actually stated that the only way they have managed to keep afloat is by drawing cash from the business which they have hidden from the tax man, clearly the sign of business on life support with the family gathered around the bed.
With so much choice on offer for consumers, and the bigger operators with much larger marketing budgets being able to stock sometimes thousands of cars, it is no wonder that smaller businesses, no matter how well established, have either closed the doors or are considering doing so. Many will believe that a lot of this is self inflicted and, let’s face it; the bad press surrounding used car sales has never gone away, so there is unlikely to be much sympathy. The point though is that with the demise of established independent car businesses there becomes a lack of real competition but also there is a danger in losing lots of experience and expertise. Remember many owners and workers who have gone into the independent sector have done so because they have become disillusioned with the suffocating standards placed on franchised dealers and the over complication of what should be a very simple process. There is also a desire for these people to prove that they can run a successful prosperous but reputable business as well, if not better, than their franchised counterparts.
With more people coming into the car trade with little or no experience at all, the professionals operating outside the franchised network will be sorely missed by customers looking for real choice. You only need to check out the facilities and websites of many of these types of business to see how well they are run, and in some cases the manufacturer backed businesses can learn a lot about branding, presentation and marketing from these dealers. Customers need to b given choice not only in selection and price but also in quality, there is a place for multi-car “stack ’em high sell ’em cheap” operations if that’s what buyers want, but also for customers who need a more personal experience and because of the emotions involved in buying a car are often prepared to pay more for a better buying experience.
If you ever visit a car dealer who specialises in a particular product and who is well established you will generally find some very passionate people who, because they have invested their own money into the business, have a vested interest in making a car sale a positive one and are more likely to provide a great follow up.
I would liken it to choosing something like a suit. You can go and choose one from the shelf and it will probably be good value and will fit reasonably well and the assistant may be very friendly and help with different styles. Or you can go in a suit shop where the employees are professionals who will tell you all your measurements just by looking at you, you will get a great suit which fits perfectly and leave feeling that you have had a great bit of service. You will just have paid more for that privilege and be glad to have done so. Just because a car dealer does not have the name of a car maker over the door does not mean that the business is just not as good. It could very well be better.