9:51 am, February 26, 2020
EVERY now and then I’m hit with an email that takes me aback – one that makes me ignore other distractions around me and simply concentrate on reading it.
Now, while I’m not going to publish the email from this dealer in its entirety or name him, I have asked the man in question if he’d be happy for me to use the sentiments of his message here.
So, some context: The email arrived after I’d completed some admin work, contacting our lapsed Car Dealer Club members and asking them if they wanted to renew their membership.
Most of those I emailed were shocked that it was from me, most thinking I was an autobot, but when I replied and assured them I wasn’t, they often gave me some interesting insight into what they think of the magazine and the industry.
Some renewed, some said they were no longer in business – and a few lucky ones had sold out to the big boys, with one telling me he was ‘enjoying retirement out of the country for six months a year’.
All right for some! But for our man in question, things were a little different…
‘I have very much enjoyed my last 10 years as a Car Dealer Club member and always felt I could glean some information each month to help assist me with what I’m doing,’ he wrote.
‘Running your own ship can be a lonely place sometimes, so to get a feel of what’s going on and see examples of good practice really helped.
‘However, it’s with sadness that I say I’m actively looking to leave the industry after the best part of 25 years man and boy (literally, as I’m only 38) and the last 10 years having run my own business as successfully as I feel I can, with absolute attention to detail and decency.’
The independent car dealer said he believed the days of small businesses, like his, retailing circa 150 cars a year, were numbered, and went on to explain the pressures that had driven him to make the toughest decision of his life.
‘The volume players are using the car as a vehicle to gain the fruits of F&I income, thus there’s less emphasis on chassis profit and instead they are relying on the pure model of large numbers,’ he explained.
‘Sure, if you can make around £750 a car net on 5,000 units a year, it makes for a large number, but as a percentage retained it’s a very fine line between getting it right and wrong. An industry with a one per cent retained margin is nothing less than brain damage.’
He’s not wrong. Competing with the big boys who have scale, bank balances and the teams to keep these large numbers churning is getting very hard indeed.
Shock to the system
In fact, just around Gosport I’ve seen two similar-sized dealers shut up shop for good in the past year.
Our man also blamed auction houses for aggressively seeking stock from all avenues, making it harder and harder for smaller dealers to buy at the right price, and he said the profitability from private sellers has ‘all but gone’.
He was also fed up with being given advice from ‘so-called experts’ who would ‘have a shock to their system if they really knew what was going on’.
‘We’re constantly told it’s all about data, about 60 pictures on our adverts when estate agents sell a £600k house with 15, but I’d love to see how these “experts” get on in the real world.
‘I think you and I both know they would be staggered at the battle to buy it, the battle to prepare a five-year-old car that’s probably only been sold due to a hidden problem only apparent after driving it for 200 miles, then advertise that car, deal with the retail buyer who “knows buying and selling cars is the easiest job in the world” and then stand by it for the next six months.
They would be running back to their open-plan offices with comfy sofas and table football faster than you could say “Usain Bolt”. These people are absolutely clueless and it’s very, very sad.’
But he lays his biggest criticism at the door of manufacturers who have a total lack of interest in engaging with smaller, independent, family-run businesses like his.
‘Independent dealers are hated by manufacturers compared to large corporates with perhaps five to 10 outlets representing that manufacturer. The level of service from an independently owned dealer where, if you’ve got a problem, you can go in to see the man with his name above the door is night and day different.
‘I’m sure the motor trade will continue to evolve and produce great things. Huge turnovers will still be bandied around as success stories and a pecker like me disappearing will not be missed.
I do hope, though, that I can find something more fruitful for my efforts and perhaps one day sit on the other side of the desk buying a car while the sales exec desperately tries to pump me into a PCP, admin fee, service plan, paint protection, extended warranty, wheel and key insurance in the hope that if he ticks every box and gets his CSI score right he may earn his £75 and stave off a shoeing and heart attack while looking forward to his day off every other week.’
Times are tough and there’s no doubt the industry is changing, but I don’t know about you, losing people like this is a travesty.
Although he no longer needed his Car Dealer subscription, I’ve offered to add him to my VIP list anyway – maybe one day, with a bit of encouragement and a break, he’ll be back. I hope a copy of Car Dealer every month will give him that inspiration to return.
James Baggott is the founder of Car Dealer Magazine and chief executive officer of parent company @BaizeGroup, an automotive services provider. He now spends most of his time on Twitter @CarDealerEd and annoying the rest of us.
MORE: All FCA brands under one roof at new £1m retail concept store
