The used car market may be showing positive signs at the moment but this golden period is bound to end at some point so dealers must avoid becoming complacent.
That’s according to Sentience Automotive Solutions’ Ali May-Khalil, in a special comment piece for Car Dealer Magazine following the reopening of showrooms.
‘Early signs are the used car market is extremely positive with stock making strong money in the auctions. Customers have confidence to buy and are happy to operate within any Covid-19 constraints.’
But the managing director of the consultancy warned: ‘Whilst there are many reasons to be optimistic, and I encourage the positivity, we must also ensure we don’t take our eye off the “cashflow ball”.
‘With short-term cashflow, in many cases being propped up by government-supported initiatives, it is easy to expect this positive period to never end, but I am afraid it will.
‘Then what? I encourage the use of cashflow forecasts for our clients so we can get a view of what the next six to nine months look like.’
May-Khalil said dealers needed to ask themselves the following:
- Is there money to buy stock when, possibly, prices begin to soften?
- Is there enough money to buy stock to ensure the first quarter begins strongly so they don’t chase the pack and pay the price come late January?
- When do they start making the repayments and how will it affect them?
- Do they have a budget for marketing and social media?
- What if they pay top money for cars now but still have them in eight weeks?
- How will they drive leads into the business and handle them should things slow down?
‘It is vitally important that dealers don’t “switch off” and become complacent during this period,’ he said.
May-Khalil added: ‘Another matter that may be being overlooked is people. Many have been furloughed and still are, so what kind of “condition” are they in now?
‘Are you expecting people to just come back in and play at the requisite level? This is unreasonable and may cause all kinds of problems for all concerned.
‘Giving great service to customers can only be achieved through people. If they’re not at their best, supported or not even at work, then the customer experience – and your bottom line – will suffer.
‘Ensure you give careful consideration to how you want your business to “look” in six to nine months and how you expect your people to perform. Work a plan back from that and you will be giving yourself, and your business, the best chance of continued success.’
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