Right Click

Right Click: Champagne fantasies on a beer budget

Time 11 years ago

rollercoasterIf you read enough reports and studies you’d think today’s car buyer is almost impossible to please.

They will have looked at about a million vehicles online and become a ‘prosumer’ in the process, all of which means they’ll know more about the specific make, model and cup holder design than you. 

If you are lucky enough to actually get one of these people into a showroom (because recent research from CAPGemini suggests more than 25 per cent of people don’t want to talk to a dealer), you will already have been recommended to them by their Facebook family (most of whom they don’t even know).  


At this point you will be required to provide the car at a price they’ve seen from a dealer in the Outer Hebrides with an extended warranty, road tax for life and all at 0.5 per cent flat rate because they don’t trust APR… and free mats.

While it may not actually be this bad, there’s a nugget of truth in there. GForces’ recent study of the Top 200 dealers in the UK reveals that in the past six months, video and social media adoption has soared by more than 20 per cent. 

 Major shifts in the economy and buyer behaviour have made this a challenging and competitive time for the motor trade. The economic outlook, and more to the point everyone’s perception of it, is up and down like a rollercoaster. Is it a double dip? Are we about to enter the tunnel of recovery or drop from our precipitous peak screaming and hollering? Who knows… none of the experts, that’s for sure. 

Yes there is positive news for the likes of GM who have hit profit and, yes, the seismic activity that forced cracks in the banking system seems to have subsided and credit lines are starting to return. While the SMMT figures are pretty optimistic at 2.018m new units in 2010, 1.2 per cent above the 2009 market, at the consumer level, all bets are still off. That means dealers who have the hardest job of all – selling to customers – still have to think about every area of their business, not just the internet.

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Many dealers are expecting a tough end to 2010 and are looking at costs in detail, seeking efficiencies in every part of the business and trying to squeeze revenue from sales opportunities until it hurts. To be honest, this is pretty good practice in general though management consultants will ensure we use terms like ‘best practice’ and ‘optimising cost horizons’ to explain this common sense approach. The bottom line is many dealers have to become more professional in order to achieve the same with less. 

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Jon Goodman, managing director of Peugeot, reminds us: ‘It will be a testing market and we’ll have to be at our best in terms of product offering and the service we give to the customer.’ That means people, process, service and efficiency throughout your business.

While manufacturers may do a great job, on the whole, whetting the car buyers’ appetite for product, it is dealers that must deal with customers who want to indulge in Champagne fantasies on a beer budget. And it is the internet that has made it easier for them to pick out the Cristal from the Carlsberg.

by Tim Smith, Gforces.co.uk

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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