Cost control

Tackling the cost base has once again been brought into sharp focus for automotive retailers as the UK economy stagnates.

As 1 in 2 car dealers predict their 2022 profits will be down vs 2021 AM's survey finds 1 in 4 have made wage increases above 5% to help staff with living costs

As omnichannel sales, agency fees and low-maintenance electric cars become a norm, it will become imperative for car dealerships to identify new revenue streams.

The benefits of an agency-style model, where the new car journey is managed online and manufacturers pay a handling fee to retailers, largely outweighs the disadvantages, according to senior executives at dealer groups already experiencing mixed commissions at work in their businesses.

Coronavirus has driven an uplift in motor finance digital applications this year, but 2021 looks set to bring further effects for dealerships regulated by the Financial Conduct Authority (FCA). Here AM examines three key impacts.

Fully salaried wages may help mitigate motor retail employees’ ‘financial shock’ worries

Dealer groups are increasingly shedding debt and reviewing working capital practices to brace against falling sales and an unpredictable political landscape

Changes to the law on including overtime and commissions in holiday pay will be felt even more sharply on the bottom line as trading conditions toughen

Carmaker says network cull will protect profitability – new contracts will include changes to remuneration policies and standards to reflect online sales trends

Whether through add-ons, dealer-fit extras, or more accurate part-exchange valuations, car dealers need a diverse approach to maximise margins

Doing the simple things right makes a big difference to car dealer profitability and remember: every little helps

The motor retail industry is moving rapidly and it is the car dealers who can keep pace who will win in the long term

When should ‘cost’ be considered ‘investment’? It’s a juggling act for car dealers

Car dealers endure more cash flow volatility than most businesses, but good forecasting, careful stock management and good communication can calm the waters

Learn the lessons of the UK’s most profitable dealer groups with ASE's profit clinic at the Automotive Management Live exhibition.

Car dealers are feeling the strain from falling margins, recruitment woes and manufacturer ‘micro-management’, delegates at the latest AM Round Table heard.

Outsourcing can save money, bring in expertise and cut headcount, but dealers say trust and service levels are vital for a supplier partnership to succeed.

Dealers must measure cost and quality to effectively assess outsourced providers.

Car dealers need to take care that cuts in spending do not lead to reduced efficiency and profitability.

Should your dealerships take an in-house or an outsourced approach to essential services? We ask dealers and suppliers for the pros and cons of each.

Each quarter AM surveys dealers in its High Performance Indicators survey on the state of the market and their confidence in areas such as sales, profitability, manufacturer relations and consumer demand. The survey includes telephone interviews with a number of dealers. Their views are expressed here.

Grants Seat's line managers are shielded from administration to concentrate on customers.