9:01 am, August 15, 2022
Car dealers need to deploy a strategy of ‘focus and grip’ if they are to make it through the current economic challenges.
That is the view of Cox Automotive, which has published its latest AutoFocus report – its quarterly insight roundup of the motor trade.
The report says that while demand for vehicles may reduce, the automotive industry can navigate the ongoing headwinds by focusing more on gross profit and tightening its grip on expenditure.
‘At the start of the pandemic, our focus was on identifying the practical steps businesses could take amid deteriorating economic conditions,’ said Philip Nothard, insight and strategy director at Cox Automotive.
‘At the start of the pandemic, our focus was on identifying the practical steps businesses could take amid deteriorating economic conditions.
‘Our thoughts remain the same. We still advocate that companies should employ a strategy of focus and grip.
‘Consumer confidence has weakened, which led us to downgrade our new and used forecasts for the year. However, the sector has survived challenging times and is well positioned to get through this sticky period.’
The report, produced in partnership with accounting firm Grant Thornton, also offers dealers tips on how to focus profit and tighten expenditure grip.
These include maximising gross profits, reviewing current overheads to identify possible savings, and minimising the level of working capital to ensure stock turn is as high as possible.
Nothard added: ‘Cash is the lifeblood of any business, and by reviewing cash flow and available funds every month, companies will stay in good shape during this tricky financial period.
‘Our advice is to re-examine the basics when it comes to managing your business.
‘These may have slipped in the changing environment as we have all been focusing on finding new and used vehicles and enjoying healthy profit margins.
‘Vehicle shortages will remain for some time; nevertheless, rising overheads in automotive retail companies are also here to stay.’
Pictured: Philip Nothard
