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.
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