As mentioned briefly in my previous post; The Importance Of Your Used Car Business? Well As Sherlock Holmes Would Say, it has been interesting to observe how many manufacturers in the UK, (along with their franchised dealer networks), are responding to the difficult and challenging new car trading conditions and what this in turn means for their long term commitment to their used car programmes?
We are in conversations with many manufacturers who are now looking seriously at what their support for their used car ambitions and their position in the used car market means, in terms of their long term success, and it will be fascinating to observe how their European based counter parts react to the emergence of their own used car markets. In the UK it is striking that the most ambitious and positive used car development ambitions are held by the manufacturers who are not only out-performing the new car market, but those who are also growing.
And of course, it goes without saying that these conversations are confidential and not the subject for an article, but whilst delivering our used car strategic proposal documents, some interesting issues come to light that effect the ability of all manufacturers to build sustainable and long term success in the used car market, and just at the time when they don’t need it! And this made me think about just how European manufacturers are going to react to the imminent requirement to meet the challenges of used car markets that are growing and beginning to outperform new car markets, in terms of volume.
So I thought I would start by looking at the challenges faced by your UK counterparts when it comes to planning to grow their success in the used car market; only because it will bring the magnitude of the task facing European manufacturers to the fore. I wanted to do this because the used car market in the UK is far more advanced than those in continental Europe, however, this fact has not stopped the mistakes that have been made, in terms of the long term used car strategies of UK based manufacturers.
Now, it is worth pointing out, that there are many models of used car programme being delivered and run by manufacturers throughout the UK and in the main, (time for some honesty), with the majority of the focus on the new car objectives, quite understandably it becomes impossible for manufacturers to remain at the forefront of developments in the used car market, let alone the skills-sets of the professionals that will be required to build and sustain long term success in the used car market.
So although outwardly successful, some manufacturers in the UK have chosen, (those with the ability to leverage high levels of consumer desire for their product), to try to manage the used car business in the way they are the new car business; and look, this can and has worked, but there has been a drive under this model to employ a different style and profile of personnel, in order to deliver on this model.
This article is not the platform to do so, so I will not comment here on how teams built with professionals delivering on this business model might or might not be capable of morphing into the used car entrepreneurs required, when markets get tough, down and dirty! But it does highlight an issue that the industry in the UK has as a whole; just where is the talent, the people required to get this business, (the used car business), the one we don’t understand in the way we understand the new car business, by the scruff of the neck and make it happen? And I doubt that things will be any different for European based manufacturers, in fact they will probably be more challenging in this regard.
In truth this has become the perennial problem for UK based manufacturers; so the problem gets ignored during times of buoyant new car markets but this has resulted in no long term thinking, no committed programmes of used car development and an unwillingness to embrace the culture of used car professionals, and more importantly, what they are worth.
Now I had a career in used cars, I was at the forefront of used car development for some of the most successful franchised dealer groups, so why did I leave? Well, and this is not a reflection on my employers at the time or indeed the manufacturers involved; I felt that my skills as a used car professional were under-valued and I felt that lip service was paid to the business I was contracted to develop and make successful, therefore my chances of personal career development were going to be limited. So like many both before and after me, I left to pursue a used car career outside of franchised dealer networks, where better opportunities existed.
Sadly, in the main, (and I speak to a lot of used car professionals), the status quo has not changed for used car professionals in the UK nor has the mind-set of some manufacturers, (in terms of the importance that they place on training and developing used car professionals), and this has led us to where we are today; a situation where when we are strategising the delivery of used car development programmes with manufacturers, questions get asked and invariably the penny drops! “Wow! There Is A Lot To Do!” and “We Don’t Even Have The Staff To Deliver On What Needs Doing!
And invariably there is a lot to do! As a rule if I had to sum up the major points that will need to be grasped, it would include the points below;
• This is not a quick fix, so it is not a time for short term thinking!
- It is unlikely that you will have enough staff with the skills required, residing in your franchised dealer networks!
- There is a strong likelihood that no one employed at the manufacturer has the experience of driving used car businesses and/or used car development programmes to success!
- Sadly, you won’t be able to buy enough “Winners” either, because decades of under investment in used car programmes and in used car professionals has left the sector, as a whole, woefully under resourced!
- You will need to separate your strategic thinking from that required to be successful in the new car market!
- It is highly unlikely that you will have the training programmes required to develop the used car professionals you are going to need to be successful!
Now apologies if this sounds overly bombastic, but the “Status Quo” will be no different for European based manufacturers, and please bear in mind that some of the target audience based at UK manufacturers have experienced some cataclysmic year on year declines in new car registrations. Now many are at last looking at their used programmes and what will be required in order to ensure that declines in new car registrations of this magnitude are avoided in the future; and our advice to all manufacturers would be to not under-estimate the size of the task involved, and the fact that the decision’s you make now regarding your support of the used car business will have long term ramifications for your new car performance.
If UK based manufacturers want to transition their business and their franchise dealer networks from one that is a hostage to the fortunes of the new car market, (with no successful used car performance to support both them and their franchise dealer network), to a business that is building long term new car success, from the foundations of a successful used car retailing franchised dealer network, and therefore less susceptible to the socio-economic forces responsible for the current new car declines in the UK, then a continual and sustained programme of used car business development will need to be launched; and guess what, this will not be the commonly deployed in the past, throw some money at the problem, and some inadequate resource for 3-6 months, then turn the other way and hope that the problem will be solved.
The decisions UK based manufacturers make now will be critical and who they partner with to deliver their programmes of used car business development will also be critical. Decades of under investment in used car professionals have left some franchised dealer networks in the UK bereft of the skills required to sustain growth in used car retailing and the final irony for UK based manufacturers is this; at their moment of most need, the professionals they require the most, are now likely to be the highest paid individuals in the sector; so buying “Winners” can’t be the strategy and let me explain why. Those truly capable used car entrepreneurs, those capable of walking into a businesses and turning them around, of building successful used car operations, they are in short supply; they have their pick of opportunities to choose from, so to get them; well be prepared for the sharp intake of breath when it comes to salary and bonuses.
Our advice to European manufacturers in all this; try to learn from the lessons of your UK based counterparts. In the UK we have a thriving used car market place but decades of under investment, (at manufacturer level), in the development of successful used car programmes, has resulted in their approved used car programmes and associated franchise partners struggling to keep up with the top performing businesses in the used car sector.
In future articles I will be exploring why successful used professionals are in such demand in the UK and why they can command some of the most lucrative packages in the sector; their skills are a million miles away from those required by the new car professional, the skill-set by which the majority of franchised dealer networks are built from and therefore why you are unlikely to find them residing in your dealer network, ready to leveraged. Sadly, in the past, the traditional environment within the franchised dealer network in the UK has not encouraged the development of successful used car professionals.
So in looking to grow successful used car businesses the first task for European manufacturers, even before the major task of deploying a used car business development programme capable of developing a network of successful used car operations, may well be the construction of the continual training and personnel development programmes capable of supporting your future used car aspirations, via the development of the, (yet to be identified), key personnel within your franchised dealer network.
Without this, well just where are the used car professionals of the future coming from? In the UK those who are already successful in the used car arena have their choice of businesses to go to, so as a manufacturer just starting to develop used car programmes, why would they choose to leave an already successful environment? Well they just don’t, so you will have to begin the process of developing your own.
In the trading conditions of today it is an inconvenient truth that European manufacturers will only be able to develop strong and resilient franchise dealer networks in the future, those capable of supporting their new and used car aspirations and free from high levels of manufacturer support and subsidies, if they invest in and promote the expansion of approved used car business development programmes, and training and personnel development plans for used car professionals; those that will be required to ensure that a network of successful used car operations can be built.
Unfortunately though strong and resilient used car dealer networks do not happen by accident, but luckily help is at hand. If this post has resonated with you and you would like to know more about our used car business development consultancy programmes, because you would like to partner with an organisation of professionals who have faced the challenges of fast paced evolutionary markets and know how to develop a successful and profitable used car dealer network programme on your behalf, (in order to keep your new car and total business objectives growing and on track), then we would very much like to hear from you.
The owners of Autoformance have owned and run successful used car operations and been at the forefront of the development of approved used car programmes for a host of manufacturers, both in the UK and in Europe. For an exploratory conversation regarding our services and how we can develop bespoke used car business development and consultancy programmes on your behalf, please do not hesitate to contact one of our Used Car Business Development Directors; Andrew Banning at ajb@autoformance.com or Malcolm Thomas at mgt@autoformance.com
Alternatively please feel free to call me on 0044 7796 260261.
For more information about our services please visit our website at www.autoformance.com
Andrew Banning.
Used Car Business Development Director.
Since my last post, It’s The Used Car Business!,,, Stupid! I have had many conversations around just why truly capable used car professionals are in such short supply and therefore demanding such highly paid salaries and packages. During these discussions it has struck me just how out of touch some thinking is, when it comes to the professional skills-set required to be able to succeed in the used car arena.
And this is true at both manufacturer level and at franchised dealer level and I would argue that for both, the securing of genuine used car talent is pivotal to their on-going success, but for the franchised dealer it is vital that initiatives are in place to secure and develop the best used car talent they can afford. Thus my post today, which is designed to outline just what the skills-sets and experience required are, of these illusive professionals; the professionals who can walk into your business and immediately get to work at building and growing your used car business and therefore securing your long term success.
Now in saying all this it is important to qualify that it is up to the owners of the business concerned to define the used car business that they want to operate, because that will dictate the professional profile of the individual you are going to seek to employ. For many reading this, their business is more a disposal centre for cars up to 6-18 months old, (generally ex-demo, ex-short term lease and/or ex management cars). Now that is fine, it is not up to us to tell anyone what their used car business should look like, but in reality this is a business in competition with your new car business, not one that is supporting your long term business aims in the way that a more expansive used car business can; and listen you can of course run businesses selling used cars of this profile by migrating staff from your new car business, so the requirement for more expertise within the used car market can be avoided.
But we would argue that this leaves your business a hostage to fortune; it is not that cars of this age and mileage profile aren’t used cars, of course they are, (every used car business should carry this profile of used car stock, as long as it is selling them profitably), just that it will be restricting the growth of your business and leaving your business vulnerable, especially if the few sources of supply for these vehicles change their disposal options.
In this article I will be speaking directly to those running and owning franchised dealers that want to tap into the extremely lucrative and total used car market, those looking to increase overall profitability by running used car operations containing stock that is at the mileage and age stipulations of their warranty cover, capturing customers far earlier in the purchasing cycle and enjoying all the benefits associated with a successful used car operation.
Now the catch; in an ideal world the professional capable of driving forward your used car ambitions must, in our opinion, have an in-depth understanding of what it takes to get a used car business by the scruff of the neck, run it hard and drive it towards success. Preferably they will have already run another successful used car operation themselves and therefore understand the demands and requirements of a successful used car operation. This is imperative, because the used car business, the one that influences your future new car and long term business success, is a very different business to operate, so the business you probably have little understanding of, is the business most affecting your new car and overall business success in the future.
Herein lies the quandary for those running franchised dealer operations, they may understand the requirement to grow their used car operation, but they are looking for a professional with a skills-set that they invariably don’t understand and it is because of this, that many decisions made by those running franchised dealers in the past, in relation to appointments in senior used car positions, have left us bewildered. It is almost as if there has been no process of evaluation in appointments, no striving to find the professional with the experience and the knowledge in how to build successful used car operations, no its more a case of let’s just move this individual into the role, it can’t be that hard.
Now in all fairness, it is also hard to find these individuals, there are not many of them around and those who are successful will of course already be running a successful used car operation and being paid handsomely for their efforts. They may also have found where they are comfortable, where they can have the difficult conversations required with the owners of the business and have the authority to get the job done!
I mention this because this is important and sometimes why it can be difficult to poach successful used car professionals; the hard work to overcome some of the political issues has already been completed and they are not fighting the all too common undermining of the business and the reticence to embrace the individuals required. Now listen I understand the reticence to embrace used car professionals, in the main they are not a “Good Fit” politically for some franchise dealer environments, but as our market continues to evolve, the importance of used car success is going to become more important to manufacturers and their franchise partners, in terms of their new car success and the financial performance of their business as a whole.
So we would argue that now is the time to be looking for genuinely capable and successful used car entrepreneurs, (before you find there are none available), and accepting that you must also create an environment where they can succeed on everyone’s behalf.
But in doing this there must be an acceptance that challenging questions will be posed by this individual, they are going to challenge conventional thinking and maybe worse, trample on some sacred principles. I have seen and experienced much professional prejudice against used car professionals in the past and now many of them reside in the independent and specialist used car sectors and/or are running their own successful independent businesses. But now is the time for some different thinking and embracing the benefits that this individual will bring to the overall used car and new car objectives.
So what skills will this individual have to have, in order to bring successful, effective and proven used car development skills to your business? Well although nowhere near the definitive list, the skills and experience below should be the absolute minimum level of acumen and experience;
-
A proven track record of running successful used car operations at franchise dealer level.
- Used car business auditing expertise, in terms of an ability to walk into a business and assess the current strengths and weaknesses of a used car operation, and then go on to construct and deliver the bespoke and appropriate programme of used car business development.
- The ability to construct and deliver the used car business development programme required, in order to ensure that the used car operation receives the tailored used car development programme that will ensure success, via the achievement of all targets.
- Constructing and overseeing the used car training and personnel development programme that will take their used car sales team on a path of professional development.
- Capable of presenting complex business cases for investment in used car development at both franchise dealer and group levels, and at the most senior levels within the organisation; including the overcoming of all objections.
- Building the relationships and the strategies required in order to ensure that all used cars returning to the manufacturer and their in-house finance company, (whether that be ex-lease, ex-management cars or cars returning at the end of finance agreements), are supported and either retailed or disposed of via the used car operation.
- In-depth understanding of the power of technology and how it can be harnessed to work in successful synergy with used car operations.
- Commercial expertise in the used car market as a whole including the fragmentation of the used car market, the changing purchasing behaviour of consumers and the strategies required to successfully develop electronic enquiries to successful sales outcomes.
-
In-depth understanding of the cyclical demand within the used car market place and how that effects budgets, targeting, (both departmental and individual), the utilisation of funds employed to used car stock and the opening used car stock levels required.
- Commercial grasp and understanding of the effect that the rate stock turns plays in in the utilisation of funds employed to used car stock holding and therefore overall profitability.
-
Expertise in used car stock acquisition techniques and used car stock profiling, as well as the ability to build the relationships of supply required to ensure minimum stock levels are maintained.
- The ability to build and manage successful used car sales teams, including a complete commercial grasp of what skills to employ and when, in order to ensure that growth and budgeted profits are maintained.
- Complete commercial grasp and understanding of the symbiotic relationship that exists between used car performance and success in the new car market.
Now in reality it will be unlikely that the skills and experience alluded to above will have been nurtured in another role contained within the structure of the franchised dealer, so if nothing else, hopefully I have been able to get across the folly of shifting personnel around within the sales department in the hope that someone will trip into success in the role of developing a successful used car business.
It just does not happen, in the same way that I can’t go on a trip to the Kennedy Space Centre and fly space shuttle; for sure there astronauts who can but despite my willingness to try I lack the experience and training to deliver the objectives, so expecting me to succeed is a highly flawed thought process.
And one last thing, and this is important, if you come to the decision that the professional possessing all of the skills-sets above will be required to develop the long lasting and successful used car business foundations that you are going to need, then think carefully on the commercials. I was asked recently for my input into a package and job description for a high profile role building a used car development programme for a prestige manufacturer; it was a huge job and one that would require a seriously successful, big hitting used car professional to deliver and when we got to the package, I nearly fell off my chair.
The naivety lack of commercial understanding of the UK used car market place shocked me; I can’t and won’t name names, but we are talking about a well-known automotive industry recruiter and a very successful premium brand manufacturer and between them they were suggesting a package that was going to pay the successful applicant 33% of what the job was actually worth. When we explored this further there was a general reticence to pay the money required because of what it would mean, in terms of other staff employed, but until the sector does away with this mentality and pays what the role commands in the independent and specialist sectors, how does the franchised dealer part of the sector expect to attract and retain top talent; and the top talent that right now, is most crucial?
Now we appreciate that finding genuinely successful used car professionals is very difficult for both manufacturers and their franchised dealer networks but luckily help is at hand. If this post has resonated with you and you would like to know more about our used car business development consultancy programmes, because you would like to partner with an organisation of professionals who have faced the challenges of fast paced evolutionary markets and know how to develop a successful and profitable used car operation on your behalf, (in order to keep your new car and total business objectives growing and on track), then we would very much like to hear from you.
The owners of Autoformance have owned and run successful used car operations and been at the forefront of the development of approved used car programmes for a host of manufacturers. For an exploratory conversation regarding our services and how we can develop bespoke used car business development and consultancy programmes on your behalf, please do not hesitate to contact one of our Used Car Business Development Directors; Andrew Banning at ajb@autoformance.com or Malcolm Thomas at mgt@autoformance.com
Alternatively please feel free to call me on 07796 260261.
For more information about our services please visit our website at www.autoformance.com
Andrew Banning.
Used Car Business Development Director.
As mentioned briefly in my previous post; The Importance Of Your Used Car Business? Well As Sherlock Holmes Would Say, it has been interesting to observe how many manufacturers and their dealer networks are responding to the difficult and challenging new car trading conditions and what this in turn means for their long term commitment to their used car programmes?
We are in conversations with many manufacturers who are now looking seriously at what their support for their used car ambitions and their position in the used car market means, in terms of their long term success, and it is striking that the most ambitious and positive used car development ambitions are held by the manufacturers who are not only out-performing the new car market, but those who are also growing.
And of course, it goes without saying that these conversations are confidential and not the subject for an article, but whilst delivering our used car strategic proposal documents, some interesting issues come to light that effect the ability of all manufacturers to build sustainable and long term success in the used car market, and just at the time when they don’t need it!
Now, it is worth pointing out, that there are many models of used car programme being delivered and run by manufacturers throughout the UK and in the main, (time for some honesty), with the majority of the focus on the new car objectives, quite understandably it becomes impossible for manufacturers to remain at the forefront of developments in the used car market, let alone the skills-sets of the professionals that will be required to build and sustain long term success in the used car market.
So although outwardly successful, some have chosen, (those with the ability to leverage high levels of consumer desire for their product), to try to manage the used car business in the way they are the new car business; and look, this can and has worked, but there has been a drive under this model to employ a different style and profile of personnel, in order to deliver on this model.
This article is not the platform to do so, so I will not comment here on how teams built with professionals delivering on this business model might or might not be capable of morphing into the used car entrepreneurs required, when markets get tough, down and dirty! But it does highlight an issue that the industry has as a whole; just where is the talent, the people required to get this business, (the used car business), the one we don’t understand in the way we understand the new car business, by the scruff of the neck and make it happen?
In truth this has become the perennial problem for manufacturers; so the problem gets ignored during times of buoyant new car markets but this has resulted in no long term thinking, no committed programmes of used car development and an unwillingness to embrace the culture of used car professionals, and more importantly, what they are worth.
Now I had a career in used cars, I was at the forefront of used car development for some of the most successful franchised dealer groups, so why did I leave? Well, and this is not a reflection on my employers at the time or indeed the manufacturers involved; I felt that my skills as a used car professional were under-valued and I felt that lip service was paid to the business I was contracted to develop and make successful, therefore my chances of personal career development were going to be limited. So like many both before and after me, I left to pursue a used car career outside of franchised dealer networks, where better opportunities existed.
Sadly, in the main, (and I speak to a lot of used car professionals), the status quo has not changed for used car professionals nor indeed has there been a change in the mind-set of some manufacturers, (in terms of the importance that they place on training and developing used car professionals), and this has led us to where we are today; a situation where when we are strategising the delivery of used car development programmes with manufacturers, questions get asked and invariably the penny drops! “Wow! There Is A Lot To Do!” and “We Don’t Even Have The Staff To Deliver On What Needs Doing!
And invariably there is a lot to do! As a rule if I had to sum up the major points that will need to be grasped, it would include the points below;
-
This is not a quick fix, so it is not a time for short term thinking!
- It is unlikely that you will have enough staff with the skills required, residing in your franchised dealer networks!
- There is a strong likelihood that no one employed at the manufacturer has the experience of driving used car businesses and/or used car development programmes to long term and continual success!
- Sadly, you won’t be able to buy enough “Winners” either, because decades of under investment in used car programmes and in used car professionals has left the franchised dealer sector, as a whole, woefully under resourced!
- You will need to separate your strategic thinking from that required to be successful in the new car market!
- It is highly unlikely that you will have the training programmes required to develop the used car professionals you are going to need to be successful!
Now apologies if this sounds overly bombastic, but some of you reading this have experienced some cataclysmic year on year declines in new car registrations, and many we know, are at last looking at used programmes and what will be required in order to ensure that declines of this magnitude are avoided in the future; and our advice would be to not under-estimate the size of the task involved, and the fact that the decision’s you make now regarding your support of the used car business will have long term ramifications for your new car performance.
If, as a manufacturer, you want to transition your business and your franchise dealer network from one that is a hostage to the fortunes of the new car market, (with no successful used car performance to support both you and your franchise dealer network), to a business that is building long term new car success, from the foundations of a successful used car retailing franchised dealer network, and therefore less susceptible to the socio-economic forces responsible for the current new car declines, then a continual and sustained programme of used car business development will need to be launched; and guess what, this will not be the commonly deployed in the past, throw some money at the problem and some inadequate resource for 3-6 months, then turn the other way and hope that the problem will be solved.
The decisions you make now will be critical and who you partner with to deliver your programme of used car business development will also be critical. Decades of under investment in used car professionals have left some franchised dealer networks bereft of the skills required to sustain growth in used car retailing and the final irony for manufacturers is this; at your moment of most need, the professionals you require the most, are now likely to be the highest paid individuals in the sector; so buying “Winners” can’t be the strategy and let me explain why. Those truly capable used car entrepreneurs, those capable of walking into a businesses and turning them around, of building successful used car operations, they are in short supply; they have their pick of opportunities to choose from, so to get them; well be prepared for the sharp intake of breath when it comes to salary and bonuses.
In future articles I will be exploring why these professionals are in such demand and why they can command some of the most lucrative packages in the sector; their skills are a million miles away from those required by the new car professional, the skill-set by which the majority of franchised dealer networks are built from and therefore why you are unlikely to find them residing in your dealer network, ready to be leveraged. Sadly, in the past, the traditional environment within the franchised dealer network has not encouraged the development of successful used car professionals.
So your first task, even before the major task of deploying a used car business development programme capable of developing a network of successful used car operations, may well be the continual training and personnel development programmes capable of supporting your used car aspirations, via the development of the key personnel within your franchised dealer network.
Without this, well just where are the used car professionals of the future coming from? Those who are already successful in the used car arena have their choice of businesses to go to, so as a manufacturer just starting to develop used car programmes, why would they choose to leave an already successful environment? Well they just don’t, so you will have to begin the process of building your own.
In the trading conditions of today it is an inconvenient truth that manufacturers will only be able to develop strong and resilient franchise dealer networks, those capable of supporting their new and used car aspirations, and free from high levels of manufacturer support and subsidies, if they invest in and promote the expansion of approved used car business development programmes, and training and personnel development plans for used car professionals; those that will be required to ensure that a network of successful used car operations can be built.
Unfortunately though, strong and resilient used car dealer networks do not happen by accident, but luckily help is at hand. If this post has resonated with you and you would like to know more about our used car business development consultancy programmes, because you would like to partner with an organisation of professionals who have faced the challenges of fast paced evolutionary markets and know how to develop a successful and profitable used car dealer network programme on your behalf, (in order to keep your new car and total business objectives growing and on track), then we would very much like to hear from you.
The owners of Autoformance have owned and run successful used car operations and been at the forefront of the development of approved used car programmes for a host of manufacturers. For an exploratory conversation regarding our services and how we can develop bespoke used car business development and consultancy programmes on your behalf, please do not hesitate to contact one of our Used Car Business Development Directors; Andrew Banning at ajb@autoformance.com or Malcolm Thomas at mgt@autoformance.com
Alternatively please feel free to call me on 07796 260261.
For more information about our services please visit our website at www.autoformance.com
Andrew Banning.
Used Car Business Development Director.
As mentioned briefly in my previous post; The Importance Of Your Used Car Business? Well As Sherlock Holmes Would Say, it has been interesting to observe how many manufacturers and their dealer networks are responding to the difficult and challenging new car trading conditions and what this in turn means for the long term commitment of franchised dealers to their used car businesses?
We are in conversations with many franchised dealers and the manufacturers they represent, who are now looking seriously at what their support for their used car ambitions and their position in the used car market means, in terms of securing their long term success, and it is striking that the most ambitious and positive used car development ambitions are held by the manufacturers, (and their associated franchise partners), who are not only out-performing the new car market, but those who are also growing.
And of course, it goes without saying that these conversations are confidential and not the subject for an article, but whilst delivering our used car strategic proposal documents, some interesting issues come to light that effect the ability of all manufacturers and their dealer networks to build sustainable and long term success in the used car market, and just at the time when they don’t need it!
Now, it is worth pointing out, that there are many models of used car programme being delivered by manufacturers and run by their franchised dealer networks throughout the UK and in the main, (time for some honesty), with the majority of the focus on the new car objectives, quite understandably it becomes impossible for manufacturers and their franchise partners to remain at the forefront of developments in the used car market, let alone the skills-sets of the professionals that will be required to build and sustain long term success in the used car market at franchise dealer level.
So although outwardly successful, some manufacturers have chosen, (those with the ability to leverage high levels of consumer desire for their product), to try to manage the used car business in the way they are the new car business; and look, this can and has worked, but there has been a drive under this model to employ a different style and profile of personnel, (within franchise dealers), in order to deliver on this model.
This article is not the platform to do so, so I will not comment here on how teams built with professionals delivering on this business model might or might not be capable of morphing into the used car entrepreneurs required, when markets get tough, down and dirty! But it does highlight an issue that the industry, (especially franchised dealers), has as a whole; just where is the talent, the people required to get this business, (the used car business), the one we don’t understand in the way we understand the new car business, by the scruff of the neck and make it happen?
In truth this has become the perennial problem for franchise dealer networks; so the problem gets ignored during times of buoyant new car markets but this has resulted in no long term thinking, no committed programmes of used car development, (including training and personnel development programmes), and an unwillingness to embrace the culture of used car professionals, and more importantly, what they are worth.
Now I had a career in used cars, I was at the forefront of used car development for some of the most successful franchised dealer groups, so why did I leave? Well, and this is not a reflection on my employers at the time or indeed the manufacturers involved; I felt that my skills as a used car professional were under-valued and I felt that lip service was paid to the business I was contracted to develop and make successful, therefore my chances of personal career development were going to be limited. So like many both before and after me, I left to pursue a used car career outside of franchised dealer networks, where better opportunities existed.
Sadly, in the main, (and I speak to a lot of used car professionals), the status quo has not changed for used car professionals nor indeed has there been a change in the mind-set of some franchise dealers, (in terms of the importance that they place on training and developing used car professionals), and this has led us to where we are today; a situation where when we are strategising the delivery of used car development programmes with manufacturers and their franchise partners, when questions get asked and invariably the penny drops! “Wow! There Is A Lot To Do!” and “We Don’t Even Have The Staff To Deliver On What Needs Doing!
And invariably there is a lot to do! As a rule if I had to sum up the major points that will need to be grasped, it would include the points below;
-
This is not a quick fix, so it is not a time for short term thinking!
- It is unlikely that you will have enough staff with the skills required, currently employed in your business!
- There is a strong likelihood that no one employed at your business has the experience of driving used car businesses to success!
- Sadly, you won’t be able to buy enough “Winners” either, because decades of under investment in used car programmes and in used car professionals has left the sector, as whole, woefully under resourced!
- You will need to separate your strategic thinking from that required to be successful in the new car market!
- It is highly unlikely that, (at this moment), you will have access to the training programmes required to develop the used car professionals you are going to need to be successful!
Now apologies if this sounds overly bombastic, but some of you reading this have experienced some cataclysmic year on year declines in new car registrations, and many we know, are at last looking at used programmes and what will be required in order to ensure that declines of this magnitude are avoided in the future; and our advice would be to not under-estimate the size of the task involved and the fact that the decision’s you make now regarding your support of your used car business, will have long term ramifications for your new car performance.
If as the owner or the individual responsible for the business, you want to transition your business from one that is a hostage to the fortunes of the new car market, (with no successful used car operation to support your business), to a business that is building long term new car success from the foundations of a successful used car operation, and therefore less susceptible to the socio-economic forces responsible for the current new car declines, then a continual and sustained programme of used car business development will need to be implemented; and guess what this will not be the commonly deployed in the past, throw some money at the problem and some inadequate resource for 3-6 months, then turn the other way and hope that the problem will be solved.
The decisions you make now will be critical and who you partner with to deliver your programme of used car business development will also be critical. Decades of under investment in used car professionals have left some franchised dealer networks bereft of the skills required to sustain growth in used car retailing and the final irony for the owners of franchised dealers is this; at your moment of most need, the professionals you require the most are now likely to be the highest paid individuals in the sector; so buying “Winners” can’t be the strategy and let me explain why. Those truly capable used car entrepreneurs, those capable of walking into a businesses and turning them around, of building successful used car operations, they are in short supply; they have their pick of opportunities to choose from, so to get them; well be prepared for the sharp intake of breath when it comes to salary and bonuses.
In future articles I will be exploring why these professionals are in such demand and why they can command some of the most lucrative packages in the sector; their skills are a million miles away from those required by the new car professional, the skill-set by which the majority of franchised dealer networks are built from and therefore why you are unlikely to find them residing in your business or the wider dealer network, ready to leveraged. Sadly, in the past, the traditional environment within the franchised dealer network has not encouraged the development of successful used car professionals.
So your first task, even before the major task of deploying a used car business development programme capable of developing a successful and profitable used car operation, may well be the requirement for the manufacturer you represent to provide the continual training and personnel development programmes capable of supporting your used car aspirations, via the development of the key used car personnel employed at your business.
Without this, well just where are the used car professionals of the future coming from? Those who are already successful in the used car arena have their choice of businesses to go to; so as a business just starting to develop and/or grow your used car operation, why would they choose to leave an already successful environment? Well they just don’t, so you will have to begin the process of building your own used car operation without easy access to the professionals you require.
In the trading conditions of today it is an inconvenient truth that franchise dealerships will only be able to develop strong and resilient businesses, those capable of supporting their new and used car aspirations, and free from high levels of manufacturer support and subsidies, if they invest in and promote the expansion of their used car operations. Critical to which will be access to training and personnel development plans for used car professionals; those that will be required to ensure that successful used car operations can be built.
Unfortunately though, strong and resilient used car businesses do not happen by accident, but luckily help is at hand. If this post has resonated with you and you would like to know more about our used car business development consultancy programmes, because you would like to partner with an organisation of professionals who have faced the challenges of fast paced evolutionary markets and know how to develop a successful and profitable used car business on your behalf, (in order to keep your new car and total business objectives growing and on track), then we would very much like to hear from you.
The owners of Autoformance have owned and run successful used car operations and been at the forefront of the development of approved used car programmes for a host of manufacturers. For an exploratory conversation regarding our services and how we can develop bespoke used car business development and consultancy programmes on your behalf, please do not hesitate to contact one of our Used Car Business Development Directors; Andrew Banning at ajb@autoformance.com or Malcolm Thomas at mgt@autoformance.com
Alternatively please feel free to call me on 07796 260261.
For more information about our services please visit our website at www.autoformance.com
Andrew Banning.
Used Car Business Development Director.
Well, our last post; Developing A Successful Used Car Business; It Could Be Now Or Never, seems to have caused some debate with differing standpoints, depending on whether or not you have outperformed the new car market as a whole or not?
However the thread of our argument for European Manufacturers, as European markets continue to transition to used car markets that outperform new car markets, (in terms of volume of sales), and into a market conditions that are evolving at such a pace, that success will no longer be secured solely by your level of success in the new car market, we would maintain still stands true.
If you take the UK market as an example of trading conditions that European markets are heading towards, you only need to look at the SMMT new car registrations figures for 2018 to see how some manufacturers, those who have not invested in fit for purpose approved used car programmes, are now struggling. With as many as 10 manufacturers retailing cars in the UK market, experiencing year to date decreases in new car registrations of between 20% and 75%, the dangers of not enjoying a franchised dealer network that is successful in retailing used cars has never been more prevalent.
Of course we appreciate the importance of the new car market to the manufacturer, but catastrophic declines in new car performance such as this, put at risk everything the manufacturers concerned are trying to achieve. Regardless of your success today in the new car market, (due to many factors), you are going to experience downturns in new car performance; during model run outs, economic down turns etc. and these downturns are likely to become more frequent as the used car markets in Europe continue to evolve. But these unavoidable downturns can be dramatically reduced if you enjoy a franchised dealer network that is successful in the used car market, which will be critical as demand for used car product from the consumer continues to increase.
Looking at the figures from the SMMT for new car registrations in the UK thus far in 2018, it is no coincidence to us that the manufacturers experiencing the biggest year to date reductions in new car registrations, are those either not enjoying franchise dealer networks that are successful in the used car retailing arena and/or those not taking the measures required to develop and support used car retailing within their franchise dealer networks.
We appreciate that at times of challenging new car trading conditions, it may seem counter intuitive to be diverting your attention to a separate part of the business, but the reality is that if you want to build successful new car trading foundations that are fit for purpose in the likely trading environment of the future, an integral part of this process and your future success, will be a fit for purpose approved used car programme that is then supported by a franchise dealer network that is successful at retailing used cars.
However, some manufacturers in the UK just never grasped this concept, they thought the new car business could stand alone and be successful as well as deliver growth year-in year-out, but it can’t! Imagine you represent one of the manufacturers experiencing 20% plus declines in new car registrations in your market during the first half of 2018, and then ask yourself how this can happen? What is it that makes a manufacturer experience a decline in new car registrations of this magnitude and in such a short period of time?
For sure there may be reasons at the margins of this decline, model range run outs etc. but it would be folly to blame substantial declines in new car sales on operational or economic factors that are at the margins of your under-performance. Sometimes we have to look inwards, stop blaming the outside forces and face realities that we may wish to ignore. As the famous Arthur Conan Doyle quote from his Sherlock Holmes novels goes; “Once you eliminate the impossible, whatever remains, however improbable, must be the truth!”
And the truth is that the operational disciplines and the investment in businesses required to ensure that you have a network of franchise partners that are successful at used car retailing, will then ensure that you do not suffer the declines in new car sales that some manufacturers have experienced in the UK market.
I won’t go too deeply into the reasons for this in this post, (I will be covering these issues in future articles), but it should be no coincidence to anyone reading this article that in markets where used car sales volumes outstrip new car sales volumes, the businesses that are most successful, in terms of new car sales, are also the businesses that are most successful at used car retailing. Within these evolving markets it will also be the manufacturers who support development of used car retailing strategies and have the training and initiatives in place for franchise partners to develop used car businesses, and to develop the personnel responsible for running used car operations, that will be the manufacturers securing their future long term used car and new car success.
In the UK now the inconvenient truth is that for those manufacturers who have suffered the biggest falls in new car registrations, there is years of hard work ahead and investment required, if the successful used car programmes and franchise dealer networks required are to be built, and future new car success is to be secured.
The benefits to European manufacturers of developing franchised dealer networks that are successful at retailing used cars are too numerous to mention, and were covered in my last post, so can be found by following the direct link above.
The pressures on our retailing trading model were also discussed and these threats are not going away; in a market that is both evolving and fragmenting at a dizzying pace, the time to be securing the future of your used car and new car trading model is now, before it is taken from you by the aggressive independent business models targeting the sector in Europe.
These threats will not be going away; with independent internet based new car supply businesses now both moving into European markets and now openly targeting expansion into the used car market in the UK, (the natural progression for which will be to also target European used car markets), we would caution that the sector, and the franchised dealer based trading model, has never been under such threat. The time for action is now and the main area of your business requiring your focus, will be your used car programmes and retailing model.
In the trading conditions of today it is another inconvenient truth that European manufacturers will only be able to develop strong and resilient franchise dealer networks, those capable of supporting their new and used car aspirations, and free from high levels of manufacturer support and subsidies, if they invest in and promote the expansion of approved used car business development programmes, those that will be required to ensure that a network of successful used car operations can be built.
Unfortunately though, strong and resilient used car dealer networks do not happen by accident, but luckily help is at hand. If this post has resonated with you and you would like to know more about our used car business development consultancy programmes, because you would like to partner with an organisation of professionals who have faced the challenges of fast paced evolutionary markets and know how to develop a successful and profitable used car dealer network programme on your behalf, (in order to keep your new car and total business objectives growing and on track), then we would very much like to hear from you.
The owners of Autoformance have owned and run successful used car operations and been at the forefront of the development of approved used car programmes for a host of manufacturers, (both in the UK and Continental Europe). For an exploratory conversation regarding our services and how we can develop bespoke used car business development and consultancy programmes on your behalf, please do not hesitate to contact one of our Used Car Business Development Directors; Andrew Banning at ajb@autoformance.com or Malcolm Thomas at mgt@autoformance.com
Alternatively please feel free to call me on 0044 7796 260261.
For more information about our services please visit our website at www.autoformance.com
Andrew Banning.
Used Car Business Development Director.
Well, our last post; Developing A Successful Used Car Business; It Could Be Now Or Never, seems to have caused some debate with differing standpoints, depending on whether or not you have outperformed the new car market as a whole or not?
However the thread of our argument surrounding success in the used car market and the importance it plays in terms of securing your business moving forward, and into a market that is evolving at such a pace, (something that will not be secured solely by your level of success in the new car market), we would maintain still stands true.
You only need to look at the SMMT new car registrations figures for 2018 to see how some manufacturers and their franchised dealer networks are struggling; with as many as 10 manufacturers and their associated networks experiencing year to date decreases in new car registrations of between 20% and 75%, the dangers of not running a used car operation that is successful in retailing used cars, has never been more prevalent.
Of course we appreciate the importance of the new car market to the manufacturer and therefore, by default, to the franchised dealer, but regardless of your success today in the new car market, (due to many factors), you are going to experience downturns in new car performance; during model run outs, economic down turns etc. But this unavoidable downturn can be dramatically reduced if your business includes a successful used car operation.
Looking at the figures from the SMMT for new car registrations thus far in 2018, it is no coincidence to us that the manufacturers and their associated franchised dealer networks, experiencing the biggest year to date reductions in new car registrations, are those either not enjoying franchise dealer networks that are successful in the used car retailing arena and/or not taking the measures required to develop and support used car retailing within their franchise dealer networks.
We appreciate that at times of challenging new car trading conditions, it may seem counter intuitive to be diverting your attention to a separate part of the business, but the reality is that if you want to build successful new car trading foundations that are fit for purpose, an integral part of this process and your future success, will be a successful and profitable used car operation, and being aligned to a manufacturer with a fit for purpose approved used car programme; one that is then supporting their franchise dealer network in developing used car operations that are successful at retailing used cars.
However, some franchise owners, as well as the manufacturers they represent, just never grasp this concept, they think the new car business can stand alone and be successful in delivering growth year-in and year-out but it can’t! If you represent one of the manufacturers experiencing 20% plus declines in new car registrations during the first half of 2018, ask yourself how this can happen? What is it that makes a manufacturer and your business, (as one of the franchise partners), experience a decline in new car registrations of this magnitude and in such a short period of time?
For sure there may be reasons at the margins of this decline, model range run outs etc. but it is folly to blame substantial declines in new car sales on operational or economic factors that are at the margins of under-performance. Sometimes we have to look inwards, stop blaming the outside forces and face realities that we may wish to ignore. As the famous Arthur Conan Doyle quote from his Sherlock Holmes novels goes; “Once you eliminate the impossible, whatever remains, however improbable, must be the truth!”
And the truth is that the operational disciplines and the investment in businesses required to ensure that you have a used car operation that is successful at used car retailing, will then ensure that you do not suffer the declines in new car sales that some manufacturers, (and their associated franchised dealer networks), have experienced thus far in 2018.
I won’t go too deeply into the reasons for this in this post, (I will be covering these issues in future articles), but it should be no coincidence to anyone reading this article that the businesses that are most successful, in terms of new car sales, are also the businesses that the most successful at used car retailing. The business that is successful at used car retailing is less prone and more resilient to down turns in the new car market, and when they do come, (as they invariably do), the business with a profitable used car operation always bucks the trend; isn’t it funny how they have a knack of always succeeding in the new car market as well?
Well just take a moment to ask yourself why? Let me assure you of a couple of things; it will be nothing to do with the territory where they are based or any special preferences they get from the manufacturer. It will be how they leverage and take advantage of their successful and profitable used car operation, incorporating the associated sales and operational disciplines throughout the rest of the business, which then ensures that they are bucking any downward trends in the new car market.
And manufacturers who support this development of used car retailing strategies and have the training and initiatives in place for franchise partners to develop used car businesses, and to develop the personnel responsible for running used car operations, will be the manufacturers securing their future long term used car and new car success, both for themselves and their franchise partners.
Over the last 10 years the new car business has been in a halcyon period supported by cheap interest rates and the feeding frenzy for PCP, (as a purchasing model), with consumers. During this period the new car business has experienced some record levels of performance, but I fear that this period is now coming to an end, and what’s worse, those who didn’t keep their focus on their used car business, are going to struggle with the challenging trading conditions and inevitable down turns in new car performance coming their way.
The benefits to the franchised dealer of having a professionally run and profitable used car operation, that is successful at retailing used cars, are too numerous to mention, and were covered in my last post, so can be found by following the direct link above.
The pressures on our trading model were also discussed and these threats are not going away; in a market that is both evolving and fragmenting at a dizzying pace, the time to be securing the future of your used car and new car trading model is now, before it is taken from you, (your fellow franchise partners and the manufacturer you represent), by the aggressive independent business models targeting the sector.
These threats will not be going away, with independent internet based new car supply businesses now openly targeting expansion into the used car market, we would caution that the sector, and the franchised dealer based trading model, has never been under such threat; the time for action is now and the main area of your business requiring your focus, will be your used car operation and retailing model.
In the trading conditions prevalent today it is an inconvenient truth that franchised dealers will need to build successful and profitable used car operations, if they are to grow and remain financially resilient in the evolving market conditions coming their way; and manufacturers will only be able to develop strong and resilient franchise dealer networks, those capable of supporting the new and used car aspirations, and free from high levels of manufacturer support and subsidies, if they invest in and promote the expansion of approved used car business development programmes, those that will be required to ensure that a network of successful used car operations can be built.
Unfortunately though, strong and resilient used car operations do not happen by accident, but luckily help is at hand. If this post has resonated with you and you would like to know more about our used car business development consultancy programmes, because you would like to partner with an organisation of professionals who have faced the challenges of fast paced evolutionary markets and know how to develop a successful and profitable used car operation on your behalf, (in order to keep your new car and total business objectives growing and on track), then we would very much like to hear from you.
The owners of Autoformance have owned and run successful used car operations and been at the forefront of the development of approved used car programmes for a host of manufacturers. For an exploratory conversation regarding our services and how we can develop bespoke used car business development and consultancy programmes on your behalf, please do not hesitate to contact one of our Used Car Business Development Directors; Andrew Banning at ajb@autoformance.com or Malcolm Thomas at mgt@autoformance.com
Alternatively please feel free to call me on 07796 260261.
For more information about our services please visit our website at www.autoformance.com
Andrew Banning.
Used Car Business Development Director.
Well, our last post; Developing A Successful Used Car Business; It Could Be Now Or Never, seems to have caused some debate with differing standpoints, depending on whether or not you have outperformed the new car market as a whole or not?
However the thread of our argument surrounding used car business success and the importance it plays in terms of securing your business moving forward, and into a market that is evolving at such a pace, (something that will not be secured solely by your level of success in the new car market), we would maintain still stands true.
You only need to look at the SMMT new car registrations figures for 2018 to see how some manufacturers are struggling; with as many as 10 manufacturers experiencing year to date decreases in new car registrations of between 20% and 75%, the dangers of not enjoying a franchised dealer network that is successful in retailing used cars has never been more prevalent.
Of course we appreciate the importance of the new car market to the manufacturer but regardless of your success today in the new car market, (due to many factors), you are going to experience downturns in new car performance; during model run outs, economic down turns etc. But this unavoidable downturn can be dramatically reduced if you enjoy a franchised dealer network that is successful in the used car market.
Looking at the figures from the SMMT for new car registrations thus far in 2018, it is no coincidence to us that the manufacturers experiencing the biggest year to date reductions in new car registrations, are those either not enjoying franchise dealer networks that are successful in the used car retailing arena and/or those not taking the measures required to develop and support used car retailing within their franchise dealer networks.
We appreciate that at times of challenging new car trading conditions, it may seem counter intuitive to be diverting your attention to a separate part of the business, but the reality is that if you want to build successful new car trading foundations that are fit for purpose, an integral part of this process and your future success, will be a fit for purpose approved used car programme that is then supported by a franchise dealer network that is successful at retailing used cars.
However, some just never grasp this concept, they think the new car business can stand alone and be successful as well as deliver growth year-in year-out, but it can’t! If you represent one of the manufacturers experiencing 20% plus declines in new car registrations during the first half of 2018, ask yourself how this can happen? What is it that makes a manufacturer experience a decline in new car registrations of this magnitude and in such a short period of time?
For sure there may be reasons at the margins of this decline, model range run outs etc. but it is folly to blame substantial declines in new car sales on operational or economic factors that are at the margins of your performance. Sometimes we have to look inwards, stop blaming the outside forces and face realities that we may wish to ignore. As the famous Arthur Conan Doyle quote from his Sherlock Holmes novels goes; “Once you eliminate the impossible, whatever remains, however improbable, must be the truth!”
And the truth is that the operational disciplines and the investment in businesses required to ensure that you have a network of franchise partners that are successful at used car retailing, will then ensure that you do not suffer the declines in new car sales that some manufacturers have experienced.
I won’t go too deeply into the reasons for this in this post, (I will be covering these issues in future articles), but it should be no coincidence to anyone reading this article that the businesses that are most successful, in terms of new car sales, are also the businesses that the most successful at used car retailing. The manufacturers who support this development of used car retailing strategies and have the training and initiatives in place for franchise partners to develop used car businesses, and to develop the personnel responsible for running used car operations, will be the manufacturers securing their future long term used car and new car success.
Over the last 10 years the new car business has been in a halcyon period supported by cheap interest rates and the feeding frenzy for PCP, (as a purchasing model), with consumers. During this time the new car business has experienced some record levels of performance, but I fear that this period is now coming to an end, and what’s worse, those who didn’t keep their focus on the used car business, are going to struggle with the down turns in new car performance coming their way.
For many I think the issue may be the employment/contract model being deployed and short term thinking processes; the truth is that for many who have suffered the biggest falls in new car registrations, there is years of hard work ahead and investment required, if the successful used car programmes and franchise dealer networks required are to be built, and future new car success is to be secured. Sadly though people are all too often looking for the quick fix, invariably price driven, which only compounds the problems for new car retailing in the future, not resolve them.
The benefits to manufacturers of having a franchised dealer network that is successful at retailing used cars are too numerous to mention, and were covered in my last post, so can be found by following the direct link above. The pressures on our trading model were also discussed and these threats are not going away; in a market that is both evolving and fragmenting at a dizzying pace, the time to be securing the future of your used car and new car trading model is now, before it is taken from you by the aggressive independent business models targeting the sector.
These threats will not be going away, with independent internet based new car supply businesses now openly targeting expansion into the used car market, we would caution that the sector, and the franchised dealer based trading model, has never been under such threat. The time for action is now and the main area of your business requiring your focus, will be your used car programmes and retailing model.
In the trading conditions of today it is an inconvenient truth that manufacturers will only be able to develop strong and resilient franchise dealer networks, those capable of supporting their new and used car aspirations, and free from high levels of manufacturer support and subsidies, if they invest in and promote the expansion of approved used car business development programmes, those that will be required to ensure that a network of successful used car operations can be built.
Unfortunately though, strong and resilient used car dealer networks do not happen by accident, but luckily help is at hand. If this post has resonated with you and you would like to know more about our used car business development consultancy programmes, because you would like to partner with an organisation of professionals who have faced the challenges of fast paced evolutionary markets and know how to develop a successful and profitable used car dealer network programme on your behalf, (in order to keep your new car and total business objectives growing and on track), then we would very much like to hear from you.
The owners of Autoformance have owned and run successful used car operations and been at the forefront of the development of approved used car programmes for a host of manufacturers. For an exploratory conversation regarding our services and how we can develop bespoke used car business development and consultancy programmes on your behalf, please do not hesitate to contact one of our Used Car Business Development Directors; Andrew Banning at ajb@autoformance.com or Malcolm Thomas at mgt@autoformance.com
Alternatively please feel free to call me on 07796 260261.
For more information about our services please visit our website at www.autoformance.com
Andrew Banning.
Used Car Business Development Director.
