8:20 am, July 16, 2008
DEALERS should identify areas where they can increase profitability in order to beat the credit crunch.
That’s the advice from motor industry consultancy Network Automotive, which says there are many potential profit areas being ignored.
Managing director Colin Bruder said: ‘For most dealers, it is becoming clear that they will not ensure future profitability by doing more of the same. They need to find new avenues to maximise their potential.’
Sound advice – but how can you put it into practice? Well, simple brainstorming is a good start, says Bruder. But, he warns, ‘making advances in these areas needs a structured approach.’
‘It is not enough to just tell staff that they should be doing more. 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. Everyone needs to know their role.’
Areas to put in your credit crunch plan – or, simply areas to kick the brainstorming session off! – include:
• Improving F and I penetration
• Selling more service hours
• Increasing average parts invoices
• Cleansing databases
• Going all-out for local business user penetration
• Redoubling efforts on Motability sales
• Reconsidering or developing further profitable dealer rental business
• Re-examining driving school efforts
