As much as it might be difficult to get this message across to our manufacturer based audience during September, we thought it worthwhile returning to this subject so that once the dust has settled on the new car sales performance during September and the planning process begins in earnest for 2019, minds can turn to reviewing this year and planning for the next.
There is no doubt that it has been a particularly bruising new car market for some this year and with no immediate reason for the trading conditions to change as we go into 2019, the importance of looking at the 3 franchises making up the whole of the business has never been more important; the 3 franchises that are vital if you’re are going to secure your long term new car success and that of your franchise dealer network;
-
The New Car Franchise.
- The Nearly New Car Franchise.
- The Used Car Franchise.
We say this because all manufacturers are focused on the 1st franchise, the majority have a focus on the 2nd franchise but the 3rd? Well there is a huge disparity in the sector in terms of the support and focus that the development of successful used car businesses receives and if manufacturers are going to ensure that their long term new car objectives are achieved via a financially robust network of franchise partners, well then this is going to have to change.
As automotive professionals and the sector as a whole, continues to come to terms with the evolving new car retailing landscape, the importance of having a network of successful used car operations has rarely been so important. With the new car market place fragmenting and being attacked by entrepreneurial, aggressive internet based businesses who are looking to manipulate consumer behaviour and to control and hold to ransom vast amounts of consumer data, we would argue that the new car market may never be the same again. Not because manufacturers can’t compete head on with these threats, but because the purchasing behaviour of consumers has been changed and the sector, (in the main), has been caught out by the speed at which the new car trading conditions have been evolving.
As much as some manufacturers have performed above the challenging new car market conditions being experienced in 2018, performance within the new car market can be outside of the direct control of the manufacturer and those of your franchise partners; in buoyant markets volumes of stock and pricing are set by the manufacturer, as they are in challenging markets, (when driven either by product life cycles, economic conditions or both).
There is no doubt that there are many challenges that all manufacturers face in the new car market but the foundations of your long term success in the new car market are in your own hands as they lie directly in your success in the used car market.
The used car market in the UK is still over 3 times the size of the new car market and it will be no coincidence that within franchise dealer networks, the businesses that are most successful at new car retailing are also the ones that are most successful at used car retailing. They will be achieving all of the KPI’s set by the manufacturer, adhering to all the standards required, they are model businesses that work with you and support everything that the manufacturer is trying to achieve.
In reality though, all the dealers in your network want to aspire to this model, they did not invest in the franchise to not succeed, it’s just that at the core of their success is the business that the manufacturer can’t control, in the way that you can control the new car business.
Although manufacturers can aid success, unfortunately the used car business is not one that can be leveraged and controlled so much by manufacturer initiatives. It is the tertiary and potentially most profitable part of the businesses making up your franchise dealer network, but it is also the business where there is no agreed level for volumes of stock, to any specific model mix and of course all the stock acquired for this business will need varying levels of preparation in order to meet the stipulations set by the underwriters of the manufacturer’s warranty.
But the benefits to the manufacturer of a strong dealer network that is successful in the retailing of used cars are numerous, everything from:
-
Increased new car profitability for both the manufacturer and their franchise dealer network.
- Increased overall profitability of the dealer network, resulting in a financially stronger and more resilient dealer network.
- The ability to increase levels of part exchanges, therefore more new car business.
-
The maintaining of core standards set by the manufacturer.
- Larger customer bases presenting the opportunity to take more customers on the journey form used car to new car ownership.
- Increased opportunities for repeat sales and increased levels of margin retention.
- Increased levels of customer loyalty to the brand.
-
The control and protection of residual values.
- More competitive financial packages and reducing costs of ownership for customers.
- More control over the used car and new car vehicle parks.
- Protection of the brand.
- A business that is not vulnerable to the aggressive business models attacking the established new and used car retailing business models.
However, to get to here and enjoy these benefits, your dealer network will need to meet head-on, and take responsibility for, the challenges presented by the used car market place and making this task more challenging will be the inconvenient truth that every dealer within your network will be at different stages in their used car development.
On top of all this, there is the problem of the availability of the used car professionals required at both manufacturer and franchised dealer level, those with the skills-sets required to ensure that your used car success can be achieved. This subject was covered in our last post; Do Successful Used Car Professionals Exist For Manufacturers and our advice would be to not underestimate the task involved here. We will not repeat the advice contained within the article here but for those who didn’t see it, please follow the link above to the original article on our Used Car Business Development Blog, because in the rush for genuine used car professionals, (those with the talent and skills-sets required), you don’t want to get left behind. It is ironic that the professionals you most need now, may be those most ignored in the past and, as a whole, the sector is hugely under supplied in these professionals.
For those struggling to find these professionals, (and there will be many), we sympathise because 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 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 much as it might be difficult to get this message across to our franchised dealer based audience during September, we thought it worthwhile returning to this subject so that once the dust has settled on the new car sales performance during September and the planning process begins in earnest for 2019, minds can turn to reviewing this year and planning for the next.
There is no doubt that it has been a particularly bruising new car market for some this year and with no immediate reason for the trading conditions to change as we go into 2019, the importance of looking at the 3 franchises making up the whole of the business has never been more important; the 3 franchises that are vital if you’re are going to secure your long term new car success and that of your business as a whole;
-
The New Car Franchise.
- The Nearly New Car Franchise.
- The Used Car Franchise.
We say this because all franchise dealers are focused on the 1st franchise, the vast majority have a focus on the 2nd franchise but the 3rd? Well there is a huge disparity in the sector in terms of the support and focus that the development of successful used car businesses receives and if manufacturers and their associated franchised dealers, are going to ensure that their long term new car objectives are achieved, via a financially robust network of franchise partners, well then this is going to have to change.
As automotive professionals and the franchised dealer sector as a whole, continues to come to terms with the evolving new car retailing landscape, the importance of having a successful used car operation has rarely been so important. With the new car market place fragmenting and being attacked by entrepreneurial, aggressive internet based businesses who are looking to manipulate consumer behaviour and to control and hold to ransom vast amounts of consumer data, we would argue that the new car market may never be the same again. Not because manufacturers and their franchised dealer networks can’t compete head on with these threats, but because the purchasing behaviour of consumers has been changed and the sector, (in the main), has been caught out by the speed at which the new car trading conditions have been evolving.
As much as some manufacturers and their associated franchised dealer networks have performed above the challenging new car market conditions being experienced in 2018, your performance within the new car market can be outside of the direct control of the manufacturer and those of your franchise partners; in buoyant markets volumes of stock and pricing are set by the manufacturer, as they are in challenging markets, (when driven either by product life cycles, economic conditions or both).
And there is no doubt that there are many challenges that all manufacturers and their franchised dealer networks face in the new car market but the foundations of your long term success in the new car market are in your own hands as they lie directly in your success in the used car market.
The used car market in the UK is still over 3 times the size of the new car market and although manufacturers can aid success, unfortunately the used car business is not one that can be leveraged and controlled so much by manufacturer initiatives. It is the tertiary and potentially most profitable part of your business, but it is also the business where there is no agreed level for volumes of stock, to any specific model mix and, of course, all the stock acquired for this business will need varying levels of preparation in order to meet the stipulations set by the underwriters of the manufacturer’s warranty.
Unlike your new car business where new car allocations are invariably agreed before the calendar year begins, so as the dealer concerned you enter a trading environment with a set allocation, directly in competition with your fellow franchise partners and the new breed of internet based independent new car businesses; this is not the case for the successful used car operation.
There is no restriction on the volumes or profits that can be achieved from the successful used car operation, only those that you, (as the franchise owner/managing director), put on the business and this makes the used car operation unlimited in terms of profit, which will then automatically increase the profitability of every department within your dealership from the aftersales, finance and new car departments.
On top of this, used car stock holdings are more unique in terms of age, mileage and specification, so the hard work required to ensure the used car operation has the right profile of used car stock, the less choice the consumer has, the less pressure there is on margins and the less vulnerable to outside forces your business is.
In fact the benefits to the franchised dealer that is successful in the retailing of used cars are numerous, everything from:
-
Increased new car profitability.
- Increased overall profitability, resulting in a financially stronger and more resilient business.
- The ability to increase levels of part exchanges, therefore more new car business.
-
The maintaining of core standards set by the manufacturer.
- Larger customer bases therefore the opportunity to take more customers on the journey from used car to new car ownership.
- Increased opportunities for repeat sales and increased levels of margin retention.
- Increased levels of customer loyalty to the business.
-
The control and protection of residual values.
- More competitive financial packages and reducing costs of ownership for customers.
- More control over the new and used car vehicle park.
- Protection of the brand.
- A business that is then not vulnerable to the aggressive business models attacking the established new and used car retailing model.
However, to get to here and enjoy these benefits your business will need to embrace, and take responsibility for, the challenges presented by the used car market place and on top of all this, there is the problem of the availability of the used car professionals required at franchised dealer level, those with the skills-sets required to ensure that your used car success can be achieved.
This subject was covered in our last post; Do Successful Used Car Professionals Exist For Franchised Dealers and our advice would be to not underestimate the task involved here. We will not repeat the advice contained within the article here but for those who didn’t see it, please follow the link above to the original article on our Used Car Business Development Blog, because in the rush for genuine used car professionals, (those with the talent and skills-sets required), you don’t want to get left behind. It is ironic that the professionals you most need now, may be those most ignored in the past and, as a whole, the sector is hugely under supplied in these professionals.
For those struggling to find these professionals, (and there will be many), we sympathise because 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 much as it might be difficult to get this message across to our UK manufacturer based audience during September, we thought it an important issue to be discussing with our contacts based at European Manufacturers, especially as used car markets in Europe are evolving and growing at such a rate.
The emergence and growth of used markets within Europe presents European manufacturers with some new challenges, especially as we predict that used car markets will continue to grow in Europe. This growth in used car markets will bring your trading models much more in-line with those of manufacturers operating in the UK market, where you will then have to plan for how you run the 3 franchises within the business, the 3 that are being run by your UK based counterparts;
-
The New Car Franchise.
- The Nearly New Car Franchise.
- The Used Car Franchise.
We say this because, as used car markets continue to grow and evolve in Europe, so their effect on the new market will increase. So it will be important that European based manufacturers do not make the mistakes that some of their counterparts in the UK have made; where all manufacturers are focused on the 1st franchise, the majority have a focus on the 2nd franchise but the 3rd? Well in the UK there is a huge disparity in the sector in terms of the support and focus that the development of successful used car businesses receives and if UK based manufacturers are going to ensure that their long term new car objectives are achieved via a financially robust network of franchise partners, well then this is going to have to change.
As European automotive professionals and the sector as a whole, continue to come to terms with the evolving used car and new car retailing landscapes, the importance of having a network of successful used car operations is about to become very important. With the new car market place fragmenting and being attacked by entrepreneurial, aggressive internet based businesses who are looking to manipulate consumer behaviour and to control and hold to ransom vast amounts of consumer data, we would argue that the new car market in Europe may never be the same again; not because manufacturers can’t compete head on with these threats, but because the purchasing behaviour of consumers will be changed, as has been the case in the UK where the sector, (in the main), has been caught out by the speed at which the new car trading conditions have been evolving.
As much as some manufacturers, (both in the UK and European markets), have performed above the challenging new car market conditions being experienced in 2018, performance within the new car market can be outside of the direct control of the manufacturer and those of your franchise partners; in buoyant markets volumes of stock and pricing are set by the manufacturer, as they are in challenging markets, (when driven either by product life cycles, economic conditions or both).
There is no doubt that there will be many challenges that all European based manufacturers will have to face in the new car market, but luckily the foundations of your long term success in the new car market are in your own hands because in the future, they will lie directly in your success in the used car market.
Although this will present a totally different and new set of challenges to European Manufacturers, luckily there are some readymade examples of how to operate when used car markets begin to outperform new car markets, (in terms of volume), just look at the UK. The used car market in the UK is still over 3 times the size of the new car market and it will be no coincidence that within the associated franchise dealer networks, the businesses that are most successful at new car retailing are also the ones that are most successful at used car retailing. They are the businesses achieving all of the KPI’s set by the manufacturer, adhering to all the standards required, they are model businesses that work with the manufacturer and support everything that the manufacturer is trying to achieve.
In reality though, as used car markets grow and evolve, all the dealers in your network will need to aspire to this model, but the problem is that at the core of their, (and your), future success is the business that the manufacturer can’t control, in the way that you can control the new car business.
As manufacturers in the UK have learnt, as much as you can aid success, unfortunately the used car business is not one that can be leveraged and controlled so much by manufacturer initiatives. It is the tertiary and potentially most profitable part of the businesses making up your franchise dealer network, but it is also the business where there is no agreed level for volumes of stock, to any specific model mix and of course all the stock acquired for this business will need varying levels of preparation in order to meet the stipulations set by the underwriters of the manufacturer’s warranty.
But the benefits to the manufacturer of a strong dealer network that is successful in the retailing of used cars are numerous, everything from:
-
Increased new car profitability for both the manufacturer and their franchise dealer network.
- Increased overall profitability of the dealer network, resulting in a financially stronger and more resilient dealer network.
- The ability to increase levels of part exchanges, therefore more new car business.
-
The maintaining of core standards set by the manufacturer.
- Larger customer bases presenting the opportunity to take more customers on the journey form used car to new car ownership.
- Increased opportunities for repeat sales and increased levels of margin retention.
- Increased levels of customer loyalty to the brand.
-
The control and protection of residual values.
- More competitive financial packages and reducing costs of ownership for customers.
- More control over the used car and new car vehicle parks.
- Protection of the brand.
- A business that is not vulnerable to the aggressive business models now attacking the established European new and used car retailing business models.
However, to get to here and enjoy these benefits, European manufacturers and their franchise dealer networks will need to meet head-on, and take responsibility for, the challenges presented by the used car market place and making this task more challenging will be the inconvenient truth that every dealer within your network will be at different stages in their used car development.
On top of all this, there is the problem of the availability of the used car professionals required at both manufacturer and franchised dealer level, those with the skills-sets required to ensure that your used car success can be achieved. This subject was covered in our last post; Do Successful Used Car Professionals Exist For European Manufacturers and our advice would be to not underestimate the task involved here. We will not repeat the advice contained within the article here but for those who didn’t see it, please follow the link above to the original article on our Used Car Business Development Blog, because in the rush for genuine used car professionals, (those with the talent and skills-sets required), you don’t want to get left behind. It is ironic that the professionals you most need now, may be those most ignored in the past and as a whole, both the UK and European automotive sectors are hugely under supplied in these professionals.
For those struggling to find these professionals, and there will be many, we sympathise because 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 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.
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, (even in countries with established used car markets), 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.
That got me thinking about how difficult finding the professionals with the right skills-sets will be for European manufacturers because, as much as there is a huge talent shortage in the UK, where we have underinvested in used car professional, (especially at manufacturer and franchised dealer level), which has left UK based manufacturers struggling to find the genuinely capable used car professionals required to succeed; for European manufacturers planning to now operate in emerging European used car markets, the challenge of finding the talent required must be almost insurmountable.
Thus my post today, which is designed to outline just what the skills-sets and experience required are, of these illusive professionals. But for European manufacturers, many of whom are experiencing emerging used car markets, the whole challenge of finding and retaining the used car talent required is a doubled edged sword; because not only will they need a team of successful used car professionals within their franchise dealer networks, they also need a successful used car professional at manufacturer level.
Now understanding the differences between the two is important, because although working in unison, the skills-sets required at manufacturer level and franchise dealer level, although overlapping, are subtly different. As this post is designed for European manufacturer based professionals, I will not make reference to the skills-sets required to be a successful used car professional within the franchised dealer environment, but anyone wishing to read the dealer article, which will outline the skills-sets required for used car professionals who are capable of building successful used car operations at franchise dealer level, need only to follow the direct link to the article itself; Do Successful Used Car Professionals Exist For Franchised Dealers?
Now the discussions we have with UK manufacturers will begin to highlight the difficulties that European manufacturers will face because our first piece of advice for UK manufacturers looking for used car talent, is that the professional capable of driving forward your used car ambitions at manufacturer level 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.
In an ideal world they will have run a 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 success, is in many ways a very different business to operate, so the business you probably have little understanding of, is the business most affecting your new car success in the future.
It is because of this fact that many decisions made by UK based manufacturers 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 programmes and franchised dealer networks. No its more a case of let’s just move this individual into the role, it can’t be that hard, and we implore European manufacturers not to make the same mistakes in their long term used car strategic thinking.
In the UK there has also been a reticence to embrace used car professionals because in the main they are not a “Good Fit” politically for the manufacturer environment, but as the UK and European used car markets continue to evolve, the importance of used car success is going to become more important to manufacturers, in terms of their new car success and the financial performance of their associated franchise dealer networks. 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 successful used car professionals; they are going to challenge conventional thinking and maybe worse, trample on some sacred principles. In the UK 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; and now, when it is close to being too late, UK manufacturers are beginning to appreciate that now is the time for some different thinking and embracing the benefits that these individuals can bring to the overall used car and new car objectives.
For us, it will be interesting to observe the strategy deployed in this regard by European manufacturers, but to help in this process we thought we would explore the skills that this individual will have to have, in order to bring successful, effective and proven used car development skills to your business; and although not a 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.
- The ability to construct and deliver the used car business development programme required, in order to ensure that the franchise dealer network receives the tailored used car development programme that will ensure success.
- Constructing and overseeing the used car training and personnel development programme that will take used car professionals on a path of professional development.
- Capable of presenting complex business cases for investment in used car development at both franchisee level and the most senior level within manufacturers; including the overcoming of all objections.
- 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.
- 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 retailed through the franchise dealer network.
- 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 growth of the used car market, the changing purchasing behaviour of consumers and the strategies required to successfully develop electronic enquiries to successful sales outcomes.
- Construction and delivery of the approved used car warranty and standards programme that is linked to the used car objectives of the manufacturer.
- 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 current manufacturer employment structure, so if nothing else, hopefully I have been able to get across the folly of shifting personnel around within the manufacturer organisation 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 European car 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 and 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 pan European 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 UK 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? It will be important that European manufacturers avoid the same mistake.
One final thing to ponder; currently used car markets are evolving in Europe and for the first time used car sales volumes are outstripping new car sales volumes in many European markets. This is occurring just as your UK based counter parts are beginning to understand the urgent business requirement to roll out used car business development programmes to their franchise dealer networks as well, and with no history of franchised dealer used car programmes you probably won’t have a talent pool top draw upon, but guess which country does?
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 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 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.
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.
Thus my post today, which is designed to outline just what the skills-sets and experience required are, (of these illusive professionals), and for manufacturers it is a doubled edged sword because not only do you need a team of successful used car professionals within your franchise dealer network, you also need a successful used car professional at manufacturer level.
Now understanding the differences between the two is important, because although working in unison, the skills-sets required at manufacturer level and franchise dealer level, although overlapping, are subtly different. As this post is designed for manufacturer based professionals, I will not make reference to the skills-sets required to be a successful used car professional within the franchised dealer environment, but anyone wishing to read the dealer article, which will outline the skills-sets required for used car professionals who are capable of building successful used car operations at franchise dealer level, need only to follow the direct link to the article itself; Do Successful Used Car Professionals Exist For Franchised Dealers?
Most importantly, the professional capable of driving forward your used car ambitions at manufacturer level 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. In an ideal world they will have run a 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 success, is in many ways a very different business to operate, so the business you probably have little understanding of is actually the business most affecting your new car success in the future.
And it is because of this fact that many decisions made by manufacturers 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 the appointments, no striving to find the used car professional with the experience and the knowledge in how to build successful used car programmes for franchised dealer networks; no its more a case of let’s just move this individual into the role, it can’t be that hard.
Now I understand the reticence to embrace used car professionals, in the main they are not a “Good Fit” politically for the manufacturer environment, but as our market continues to evolve, the importance of used car success is going to become more important to manufacturers, in terms of their new car success and the financial performance of their associated franchise dealer networks. 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 also 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 not a 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.
- The ability to construct and deliver the used car business development programme required, in order to ensure that the franchise dealer network receives the tailored used car development programme that will ensure success.
- Constructing and overseeing the used car training and personnel development programme that will take used car professionals on a path of professional development.
- Capable of presenting complex business cases for investment in used car development at both franchisee level and the most senior level within manufacturers; including the overcoming of all objections.
- 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.
- 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 retailed through the franchise dealer network.
- 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.
- Construction and delivery of the approved used car warranty and standards programme that is linked to the used car objectives of the manufacturer.
- 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 manufacturer employment structure, so if nothing else, hopefully I have been able to get across the folly of shifting personnel around within the manufacturer organisation, in the hope that someone will trip into success in the role of developing a successful national 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 and 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 manufacturer/franchised dealer part of the sector expect to attract and retain top talent; and the top talent that right now, is most critical?
One final thing to ponder; currently used car markets are evolving in Europe and for the first time used car sales volumes are outstripping new car sales volumes in many European markets, and your European counter parts are beginning to understand the urgent business requirement to roll out used car business development programmes to their franchise dealer networks. Now, with no history of franchised dealer used car programmes they do not have a talent pool top draw upon, but guess which country does?
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 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.
